Company registration number 04754759 (England and Wales)
HIGGIDY LIMITED
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
1 JANUARY 2023
HIGGIDY LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 8
Directors' report
9 - 12
Directors' responsibilities statement
13
Independent auditor's report
14 - 18
Statement of comprehensive income
19
Balance sheet
20
Statement of changes in equity
21
Notes to the financial statements
22 - 40
HIGGIDY LIMITED
COMPANY INFORMATION
- 1 -
Directors
M C Campbell
C Stephens
Ms R Kelley
Mr R Napier-Fenning
Mr G Helm
Mr R Wyndham Mahoney
(Appointed 27 May 2022)
Secretary
Mr R Napier-Fenning
Company number
04754759
Registered office
Unit 60
Dolphin Road
Shoreham by Sea
West Sussex
BN43 6PB
Auditor
BDO LLP
Chartered Accountants
Ground Floor - Suite B
Water Court
116-118 Canal Street
Nottingham
NG1 7HF
HIGGIDY LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 1 JANUARY 2023
- 2 -

Objectives

Higgidy Limited’s (“the Company”) long term objective is to grow profitably to support continued investment. In pursuing this objective, the Company intends to maintain sound financial management and avoid excessive risks.

Business Review

The Company is a supplier of quality chilled products under the Higgidy brand. Higgidy specialises in the manufacture of premium branded savoury pastry products, such as quiches, pies, and rolls, to major food retailers in the UK. The food sector remains highly competitive as consumer eating habits have continued to evolve and volume has been challenged by the cost-of-living crisis that has impacted on consumer spending. The Company has adapted to these changes by building on our core business through continued innovation and new product development while exploring opportunities to expand into adjacent channels.

 

Capital investment was £11.0m (2021: £2.0m) in the period. During the year we invested heavily in a site expansion project. This project has significantly increased our production capacity in addition to providing additional office space in order to support the business for future growth.

 

The Directors use sales and gross profit as key performance indicators (“KPI”) to monitor the business. Sales for the 15-month period were £43.3m (2021: £36.0m) which is an increase of 21.4%. The revenue increase was primarily due to the change in accounting reference date as the prior period result is over a 12-month comparative. On a like for like basis, volume has decreased slightly, partly due to the impact of the cost-of-living crisis in the second half of the period, as there is some evidence that consumers have traded down to own label alternatives. Volume was also constrained in the peak summer months by the bakery expansion, which was completed in September 2022. Gross profit margin decreased to 27.3% (2021: 34.1%). The decrease was primarily due to input cost inflation, as while the Company has secured some price increases with our customers, we have absorbed some of the inflation, which has eroded gross margin. Gross margin has also been adversely affected by some inefficiency caused by the significant bakery expansion in the period.

 

The Company recorded a loss before tax of £3.4m (2021: profit of £1.8m). The decline in profitability in the period is primarily due to significant raw material cost inflation and bakery disruption caused by the site expansion. The combined depreciation and amortisation charge has also increased by £0.5m to £1.2m driven by the increased capital investment.

 

The Directors monitor staff numbers as a KPI. Average staff numbers were 340 (2021: 328) in the period. As a business, we look to engage and motivate our staff with our culture and invest in training and development to help our staff realise their full potential. This allows the business to maintain labour stability that is so important in producing our quality products, together with providing excellent customer service.

 

Product innovation and recipe development are fundamental to successfully developing and growing the business. The Company invests heavily in its development and technical staff to ensure the Higgidy brand is supported by exciting product innovation to our consumers.

 

Future Outlook

The Company expects 2023 to be a challenging year, but the Directors are optimistic about the future. The Company expects further significant cost inflation and are working with our customers on inflation recovery and cost mitigation. We are targeting an increase in sales through new product development and gross margin improvement from bakery efficiency projects to reduce the loss before taxation.

 

 

 

 

HIGGIDY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 3 -

Colleague Involvement

The Company places considerable value on its people and has continued its policy of communication, consultation, and involvement. Information about each business is provided by individual line managers at weekly team briefings. Broader information is also available every three months at the quarterly business brief.

 

Health and Safety

Health & Safety is integral to the way we do business and ensures we keep our colleagues, visitors, and members of the public safe as they go about their work and daily activities. It is a fundamental part of our values.

 

2022 was a difficult period as we adjusted to new ways of working and renewed our focus on traditional health & safety topics, following the Covid restrictions, which remained in place for the first 6-months of the period. We completed a health & safety gap analysis programme and focused our resources on addressing any gaps.

 

Risk Management

The Board sets the strategy for the Company and ensures the associated risks are effectively identified and managed through the implementation of the risk management and control frameworks.

 

Our Approach

Higgidy Limited became a wholly owned subsidiary of Samworth Brothers (Holdings) Limited (“the Group”) during the period and adopted various group wide policies. The consolidated financial statements for the Group are included in the Samworth Brothers (Holdings) Limited financial statements. The Board of Samworth Brothers (Holdings) Limited has overall responsibility for the risk management framework. The Board delegates the ongoing review of the framework to the GEB (Group Executive Board) through the Risk Management Group, which is chaired by the Group Chief Financial Officer. The Risk Management Group consists of key senior managers who meet regularly throughout the period. The framework is designed to ensure that all key risks are considered, reviewed, and managed appropriately.

 

The Company uses risk registers to capture the likelihood and impact of risks and any relevant mitigation. The process is overseen by the Risk Management Group, who evaluate the effect of significant or common risks on the Company and monitor the status of mitigating actions.

 

Risk Appetite

The Company’s activities expose it to several risks that fall within Strategic, Commercial, Financial and Operational categories. As a private food manufacturer, the Company seeks to minimise exposure to Financial and Operational risk, particularly in the areas of product quality, food safety, legal compliance, health & safety and cyber security. The Company accepts a slightly higher level of risk in respect of Strategic and Commercial opportunities, where there can be a balance of risk versus reward.


Emerging Risks

Emerging risks are new risks or familiar risks in a new or unfamiliar context (re-emerging), which at present do not have a significant effect on the Company but may have in the future. The Company considers emerging risks as part of the risk management framework. During the period, key emerging risks included: the effects of a prolonged UK recession; and the impact of climate change (including extreme weather) on the Company’s operations and supply chain.

 

HIGGIDY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 4 -

Key Events Impacting on our Principal Risks & Uncertainties

The Company operated in a changing and challenging economic environment during the period. Whilst the operational effects from Covid-19 and Brexit lessened, the Company was exposed to the effects of high inflation due to increased demand on commodities and energy following the global post-Covid recovery and the invasion of Ukraine, and changes in consumer buying behaviours as UK household budgets face increases to interest rates and are impacted by the cost-of-living crisis.

 

Ukraine Conflict

 

Following the Russian invasion of Ukraine, the Company assessed the impact on its principal risks and identified the following scenarios, for which it has mitigation plans in place or in development: an increased risk of Russian cyber-attacks against the Company or supply chain; an increased risk of rising energy costs and power outages during high energy demand peaks; and an increased cost or disruption to the supply of commodities and key raw materials. The Company will continue to closely assess the risks and issues associated with the ongoing conflict.

 

Cost of Living and Inflation

 

The UK economy is experiencing a period of high inflation and labour disputes, which is affecting both the Company and the food industry. Increased food and energy costs coupled with lower disposable household incomes has impacted consumer buying behaviours with evidence that some consumers have opted to eat-in, traded down to own-label products and switched to discount retailers. To mitigate the financial impact, the Company has recovered some of the inflation experienced over the last 12 months and continues to focus on inflation recovery and operational and supply chain cost reduction initiatives. In addition, the Company continues to review its product portfolio to meet consumer demands and has rolled out health, wellbeing, and cost of living assistance initiatives for colleagues.

 

Climate Change

 

The Company has continued to work towards the Group's climate change commitments set out within its Positive Impact Plan. Central to these commitments are the setting of Net Zero targets, which are aligned with the Science Based Targets Initiative (a collaboration between the Carbon Disclosure Project, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature). The Company has developed a better understanding of total food waste performance within the bakeries through better quality data and analysis, this in turn has created focused action plans to further reduce food waste. Overall, in the short term, the principal risk impact is relatively low, but with time this may increase driven mainly by customer requirements and NGO stakeholder activity.

 

Cybersecurity

 

Global cybersecurity incidents were high during the period, with frequent incidents reported in the UK and food industry. This, together with the increased risk of Russian cyber-attacks following their invasion of Ukraine, has led the Company to increase its risk rating. The Company is incorporating cybersecurity incident responses into operational business continuity plans.

HIGGIDY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 5 -
Supplier Engagement

The Company has a complex supply chain, which requires careful management to ensure we can manufacture and distribute our products to our customers. Regular communication with our suppliers is critical, particularly in the current environment as we continue to face into challenges with inflation and material availability. The procurement team interact with our suppliers daily; this enables us to identify issues as they arise and work with our supply partners to address them in real time. Our suppliers are vital to our responsible business performance, and we work in partnership with them to ensure our ingredients are ethically sourced.

 

Customer Engagement

The Company has long standing relationships with all our main customers and these relationships are critical to the Company. We interact with our customers daily and at multiple levels within the business. We work closely on new product development and innovation to ensure we are responding to changes in consumer behaviour and demands. Our dedicated insight and category teams regularly share analysis on market and consumer data. We also collaborate closely on sustainability, for example working on projects to reduce food waste and single use packaging.

 

Strategy
The Company has a strategy to build on the Higgidy brand by increasing brand awareness and diversifying into adjacent categories and channels. The key pillars of this strategy are:

 

Key Decisions Made in the Period

Response to the War in Ukraine and Inflationary Pressure

The war in Ukraine commenced on 24 February 2022. The war has caused supply chain disruption and commodity shortages in areas such as gas, vegetable oil, wheat and corn and has led to a period of high inflation. As a result, we have seen a significant increase in input costs and supply chain disruption with certain key ingredients being unavailable during the period.

HIGGIDY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 6 -

Supply chain issues were mitigated by working with our customers to rationalise product ranges and leveraging the relationships we have with our suppliers to ensure continuity of supply. Where products were not available, we used alternative ingredients where possible, as agreed with our customers.

 

The increased input costs have been most pronounced in raw materials, packaging, and utilities. We have been able to mitigate the inflationary impact through a combination of price increases, range innovations and operational efficiencies. We also have price recovery mechanisms in place to recover raw material and packaging cost increases with several customers.

 

Carbon Net Zero

While the climate emergency remains in sharp focus for many, the calls on governments and industry to reduce carbon emissions and to set robust targets towards achieving net zero carbon emissions has been tempered by geopolitical tensions and dramatic increases in energy costs. These have not diverted Higgidy form our long-term net zero goals.

 

In 2022 Higgidy continued to purchase certified renewable grid-supplied electricity and carried out carbon foot-printing to develop its net zero pathway.

 

Food Waste

Tackling food waste is a key focus area for the Company, aligned closely with our values as a family-run business. By reducing food waste throughout our value chain, we can reduce impacts on food insecurity, agricultural water emissions and carbon emissions associated with food loss.

 

Higgidy support the Group as it continues to engage with customers and industry stakeholders on food waste, including Champions 12.3 and WRAP. We support SDG 12.3, the halving food waste per capita by 50% by 2030 against the national 2017 baseline. We have continued to support local food charities and food redistribution partners including FareShare and The Company Shop, redistributing over 830 tonnes of surplus food in 2022 (2021: 650 tonnes). We have also revised our historic food waste data and reporting. The Group's total food waste intensity was 9.8% for 2022, a slight increase from 9.6% in the prior period. This is a different basis for calculating food waste intensity, and it includes food surplus. This is expected to be the high point, with 2022 impacted by the Company’s recovery from the Covid-19 pandemic and global events which impacted the availability of labour and raw materials. This had a knock-on effect on our ability to manage waste, as the number of production runs increased to manage the disruption.

 

Higgidy supports the Group initiatives in place to reduce food waste. These include a new governance framework for food waste, establishment of food waste working groups resourced and led by the senior leadership teams and with a specific focus on edible food waste and analysis of site food waste, with data reported and discussed each month. The Group's recycling rate for all waste including food waste has increased to 83.6% (2021: 83.2%), with 100% of food waste diverted from landfill.

 

Sustainable Packaging

Identifying food safe and sustainable packaging solutions continues to be a focus area for the business. We are signatories to the UK Plastics Pact. We are committed to eliminating single-use and problematic packaging in conjunction with our major customers across UK retail and coffee shops and food service. We also seek to enable recycling packaging through our ambition for 100% recyclable packaging by 2025. Much work in 2022 has focused on evaluating packaging reduction opportunities.

 

Bank Loans and Overdrafts

During the period the Company closed the HSBC invoice factoring account and became part of the group HSBC cash pool facility.

 

HIGGIDY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 7 -
Other information and explanations

Treating People Fairly

Supplier selection and approval, and the ongoing monitoring of supplier performance, is a major focus for the business. We work in partnership with our suppliers to source ingredients ethically and do business responsibly. Given that we procure numerous raw materials from across the globe via complex supply chains, we work with our key suppliers and customers to ensure risks associated with these materials, in relation to human rights and environmental sustainability, are identified and mitigated. 91% of our suppliers are linked to us on the SEDEX platform, giving us visibility of supplier performance on these key responsible sourcing criteria. Compliance with the Modern Slavery Act is outlined in our Modern Slavery Statement and is available on our website.

 

Sourcing with Care for the Planet

We remain committed to sourcing Roundtable for Sustainable Palm Oil (RSPO) certified sustainable palm oil for our products. In 2022, we became signatories to the UK Soy Manifesto, an industry leading coalition on deforestation and land use conversion free soy. Sustainable seafood is also an important area of focus also and we have continued to source materials from Marine Stewardship Council (MSC) certified sources where possible. Our procurement and responsible sourcing teams continue to develop our sourcing principles in line with customer codes of practice and global sourcing guidelines. On human rights, the ETI Base Code provides an essential baseline for all suppliers. We have also developed our Samworth Brothers Sourcing Charter in 2022. This provides our core requirements of suppliers and is being shared across our supply base.

 

Our Communities

Through donations and community projects, we support local activities and disadvantaged groups. We engage with local schools and career fairs to encourage young people to consider the food and drink industry as a career and to develop their life skills. Through our connections with local partners, we mentor secondary school and college pupils on interview techniques and CV writing.

 

We are passionate about making a positive contribution to society and have developed links that focus on reducing food insecurity and improving the health & wellbeing of our colleagues and our communities. Examples of such community engagement activities include running Pop-up pantries that ensure children do not go hungry during school holidays and the distribution of food parcels to those who need our help.

 

Developing our Portfolio

As a family business, we take our responsibility to help the nation make healthier food choices seriously. The Company is committed to producing a wide range of healthy and nutritious foods as part of its portfolio.

 

This commitment has resulted in assessment of our current product portfolio using the Nutrient Profile Model, and developing a segmentation of our portfolio which supported our dialogue with our major customers on strategic health and nutrition developments. This work has demonstrated that we have a balanced portfolio and identified opportunities to further develop.

 

Streamlined Energy and Carbon Reporting

The Company has taken the exemption to not include the streamlined energy and carbon reporting in the financial statements on the grounds that the Company is a full owned subsidiary of a qualifying Group, Samworth Brothers (Holdings) Limited.

 

 

HIGGIDY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 8 -
Section 172 Companies Act 2006

The directors of the company consider, that collectively and individually, that they have acted in a way that

promotes the success of the company for the benefit of its shareholders as set out in s172(1) (a-f) of the Act.

The strategic report has been approved by the Board and is signed on its behalf by

Mr R Napier-Fenning
Director
24 November 2023
HIGGIDY LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 1 JANUARY 2023
- 9 -

The directors present their annual report and financial statements for the period ended 1 January 2023 (referred to as “2022” and “period” throughout the report, with 2021 referring to the 52 week period ended 3 October 2021).

Change of Accounting Reference Date

During the period the company changed its accounting reference date from 3 October to 1 January to become co-terminus with its holding company, Samworth Brothers Limited.

Principal activities

The principal activity of the company continued to be that of manufacture of food products consistent with previous years.

Results and dividends

The results for the period are set out on page 19.

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

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

J H P Foottit
(Resigned 17 December 2021)
M C Campbell
C Stephens
F A Healy
(Resigned 27 May 2022)
H G Verdino
(Resigned 17 December 2021)
Ms R Kelley
Mr R Napier-Fenning
Mr G Helm
Mr R Wyndham Mahoney
(Appointed 27 May 2022)

The Company maintains liability insurance for its Directors and officers, which is a qualifying third-party indemnity provision for the purposes of the Companies Act 2006.

HIGGIDY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 10 -
Financial instruments
Treasury and Financial Risk Management

The Company’s activities expose it to financial risks including price risk, credit risk, cash flow risk and liquidity risk. The Company’s principal financial assets are bank balances and cash, trade and other debtors. The nature of the industry means the working capital cycle is short. The Company has no external borrowings. Key customers are blue chip retail companies and therefore customer credit risk is considered low. The amount presented in the balance sheet in respect of trade debtors and other debtors is net of an allowance for doubtful debtors.

The Company is exposed to commodity price risks, but carefully manages its exposure on a practical and cost benefit basis.

Research and development

The Company has continued to invest in research and development in relation to its principal activities during the period under review. This has included investment in the development of new products for our customers.

Our People

Higgidy welcomes new colleagues into our family. By operating a successful business, we provide opportunities for all our people to grow, improve their prospects and achieve their full potential. Committed to providing good places to work and to offering development and progression opportunities to our people, we maintain a progressive pay and benefits package and a retail discount scheme. Further detail on how we interact with our colleagues can be found in the Strategic Report from page 2 and forms part of this report by cross reference.

Future developments

The Company expects a challenging year but the Directors are optimistic about the future. The Company expects further cost inflation in 2023 and are working with our customers on inflation recovery and cost mitigation. The Company continues to invest in both the brand and the business. Further detail is included in the Strategic Report from page 2 of this report.

Health & Safety

Health & Safety is integral to the way we do business and ensures we keep our colleagues, their visitors, and members of the public safe as they go about their work and daily activities. It is a fundamental part of our values. Further detail on how we work can be found in the Strategic Report from page 2 and forms part of this report by cross reference.

Social and Environmental Responsibility

As a responsible business that makes a positive contribution to society, the Company is committed to leaving the world a better place than that which we found, passing on this legacy from generation to generation. Further detail on our corporate social responsibility can be found in the Strategic Report from page 2 and forms part of this report by cross reference. The Group’s Streamlined Energy and Carbon Reporting can be found in the Samworth Brothers (Holdings) Limited financial statements.

Stakeholder Engagement

Stakeholder engagement is a clear priority for the business. We maintain good relationships with our colleagues, customers, suppliers, and lenders and ensure that we engage with them on key decisions where appropriate.

HIGGIDY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 11 -
Going Concern

In forming their assessment, the directors have considered the financial position and prospects of the Company, including budgets and forecasts covering the period to 31 December 2024, using these budgets and forecasts to assess the level of funding required. They have also considered reasonably foreseeable events and circumstances which may impact the level of facilities required.

The Company is party to the group banking facilities and Samworth Brothers (Holdings) Limited has confirmed its intention to provide any required support to enable the Company to settle its liabilities as they fall due.

In assessing the ability of the Company to continue as a going concern, the Directors have considered the continued availability of the banking facilities for the wider Samworths group, including the cash needs of the overall group and compliance with its banking covenants, with no issues being identified. Further details of the Group’s assessment can be found in the Group’s financial statements for the year ended 31 December 2022.

 

In conclusion, having considered all plausible scenarios and taking into account the support pledged by the Group and continued access to the Group’s banking facilities, the directors have concluded it has adequate resources to continue to operate for the foreseeable future and therefore it is appropriate to adopt the going concern basis in the preparation of these financial statements.

HIGGIDY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 12 -
Employment Policies
The Company is committed to providing equal opportunities to all individuals within its business, through recruitment, training, and career development. The Company has continued the policy regarding the employment of disabled persons. Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the Company continues, and that appropriate support and training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other members of staff.
Disclosure of Information to Auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Auditor

In accordance with section 489 of the Companies Act 2006 and the recommendation of the Group's Audit Committee, a resolution is to be proposed at the AGM for the reappointment of BDO as auditor of the Company.

On behalf of the board
Mr R Napier-Fenning
Director
24 November 2023
HIGGIDY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 1 JANUARY 2023
- 13 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

HIGGIDY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGGIDY LIMITED
- 14 -
Opinion on the financial statements

In our opinion the financial statements:

We have audited the financial statements of Higgidy Limited (the 'company') for the 15 month period ended 1 January 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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).

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's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Independence

We are independent of the Company 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.

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.

HIGGIDY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGGIDY LIMITED
- 15 -

Other information

The Directors are 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.

 

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.

Other Companies Act 2006 reporting

 

In our opinion, based on the work undertaken in the course of our audit:

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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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.

HIGGIDY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGGIDY LIMITED
- 16 -
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.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

 

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:

 

Non-compliance with laws and regulations

 

Based on:

 

 

We considered the significant laws and regulations to be UK Accounting Standards and the Companies Act 2006.

 

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be Corporate Tax, VAT and Employment Tax legislation, Health & Safety legislation, Food Hygiene and the Bribery Act 2010.

 

Our procedures in respect of the above included:

 

HIGGIDY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGGIDY LIMITED
- 17 -

Fraud

 

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

 

- Detecting and responding to the risks of fraud; and

- Internal controls established to mitigate risks related to fraud.

 

Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue recognition and management override of controls.

 

Our procedures in respect of the above included:

 

- Customer rebate provisions

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

 

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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 by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at:

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

HIGGIDY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGGIDY LIMITED
- 18 -

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.

Cindy Hrkalovic (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Nottingham, UK
24 November 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
HIGGIDY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 1 JANUARY 2023
- 19 -
Period
Period
ended
ended
01 January
03 October
2023
2021
Notes
£
£
Turnover
3
43,288,109
36,010,237
Cost of sales
(31,456,640)
(23,736,603)
Gross profit
11,831,469
12,273,634
Distribution costs
(1,586,198)
(1,055,229)
Administrative expenses
(14,285,554)
(9,584,385)
Other operating income
3
681,214
183,209
Operating (loss)/profit
4
(3,359,069)
1,817,229
Interest receivable and similar income
1
-
0
Interest payable and similar expenses
7
(22,287)
(63,428)
(Loss)/profit before taxation
(3,381,355)
1,753,801
Tax on (loss)/profit
8
(446,711)
(174,502)
(Loss)/profit for the financial period
(3,828,066)
1,579,299

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

 

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

 

The notes on pages 21 to 40 form part of these financial statements.

HIGGIDY LIMITED
BALANCE SHEET
AS AT 1 JANUARY 2023
01 January 2023
- 20 -
2023
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
9
923,410
973,754
Tangible assets
10
14,600,744
4,805,228
15,524,154
5,778,982
Current assets
Stocks
11
1,084,792
928,417
Debtors
12
8,410,581
7,631,803
Cash at bank and in hand
1,644
294,758
9,497,017
8,854,978
Creditors: amounts falling due within one year
13
(21,658,323)
(7,625,643)
Net current (liabilities)/assets
(12,161,306)
1,229,335
Total assets less current liabilities
3,362,848
7,008,317
Creditors: amounts falling due after more than one year
15
(18,700)
(145,869)
Provisions for liabilities
17
(1,219,785)
(910,019)
Net assets
2,124,363
5,952,429
Capital and reserves
Called up share capital
20
747,383
747,383
Share premium account
356,763
356,763
Capital redemption reserve
(108,644)
(108,644)
Profit and loss reserves
1,128,861
4,956,927
Total equity
2,124,363
5,952,429
The financial statements were approved by the board of directors and authorised for issue on 24 November 2023 and are signed on its behalf by:
Mr R Napier-Fenning
Director
Company Registration No. 04754759
The notes on pages 22 to 40 form part of these financial statements
HIGGIDY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 1 JANUARY 2023
- 21 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 28 September 2020
747,383
356,763
(108,644)
3,377,628
4,373,130
Period ended 3 October 2021:
Profit and total comprehensive income for the period
-
-
-
1,579,299
1,579,299
Balance at 3 October 2021
747,383
356,763
(108,644)
4,956,927
5,952,429
Period ended 1 January 2023:
Total comprehensive loss for the period
-
-
-
(3,828,066)
(3,828,066)
Balance at 1 January 2023
747,383
356,763
(108,644)
1,128,861
2,124,363
HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 1 JANUARY 2023
- 22 -
1
Accounting policies
Company information

Higgidy Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 60, Dolphin Road, Shoreham by Sea, West Sussex, BN43 6PB.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The Company’s parent undertaking, Samworth Brothers (Holdings) Limited includes the Company in its consolidated financial statements. The consolidated financial statements of Samworth Brothers (Holdings) Limited are prepared in accordance with FRS 102 and are available to the public and may be obtained from the address given in note 25. In these financial statements, the Company is considered to be a qualifying entity (for the purposes of this FRS) as the consolidated financial statements of Samworth Brothers (Holdings) Limited include the equivalent disclosures, the Company has taken the exemptions under FRS 102 available in respect of the following disclosures:

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements, and estimates with a significant risk of material adjustment in the next year are discussed in note 2.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
1
Accounting policies
(Continued)
- 23 -
1.2
Going concern

In forming their assessment, the directors have considered the financial position and prospects of the Company, including budgets and forecasts covering the period to 31 December 2024, using these budgets and forecasts to assess the level of funding required. They have also considered reasonably foreseeable events and circumstances which may impact the level of facilities required.true

The Company is party to the group banking facilities and Samworth Brothers (Holdings) Limited has confirmed its intention to provide any required support to enable the Company to settle its liabilities as they fall due.

In assessing the ability of the Company to continue as a going concern, the Directors have considered the continued availability of the banking facilities for the wider Samworths group, including the cash needs of the overall group and compliance with its banking covenants, with no issues being identified. Further details of the Group’s assessment can be found in the Group’s financial statements for the year ended 31 December 2022.

 

In conclusion, having considered all plausible scenarios and taking into account the support pledged by the Group and continued access to the Group’s banking facilities, the directors have concluded it has adequate resources to continue to operate for the foreseeable future and therefore it is appropriate to adopt the going concern basis in the preparation of these financial statements.

1.3
Reporting period

These financial statements are for 15 months whereas the comparative figures are for a year. As a result, the comparative figures are not entirely comparable.

1.4
Turnover

Turnover is the total amount, excluding value added tax, receivable by the Company for goods and services provided, net of trade discounts and value added tax. The Company provides trade discounts, primarily in the form of rebate arrangements, to its customers. The arrangements may take the form of volume related rebates, marketing fund promotions, promotional fund contributions or lump sum incentives.

Turnover is recognised on delivery of products and is stated net of discounts. Substantively all significant risks and rewards transfer upon delivery of these goods.

1.5
Intangible fixed assets other than goodwill

Other intangible assets

Other intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and less accumulated impairment losses.

Software costs are amortised over a period of 3-8 years.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
1
Accounting policies
(Continued)
- 24 -
1.6
Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. The Company assesses at each reporting date whether tangible fixed assets are impaired.

Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of each part of an item of tangible fixed assets. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.

Property, plant and equipment acquired under finance leases or hire purchase contracts are capitalised and depreciated in the same manor as other tangible fixed assets. The related obligations net of future charges are included in creditors.

Depreciation is recognised on the following bases:

Assets under construction
no depreciation charged
Short leasehold
over the life of the lease
Leasehold improvements
over the life of the lease
Plant and equipment
straight line over 3-10 years
Fixtures and fittings
straight line over 5 years
Computers
Straight line over 3 years
Motor vehicles
straight line over 5 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since the last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits.

1.7
Business combinations

Business combinations are accounted for using the purchase method as at the acquisition date, which is the date on which control is transferred to the Company. At the acquisition date, the Company recognises goodwill at the acquisition date as:

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
1
Accounting policies
(Continued)
- 25 -
1.8
Impairment excluding stocks

Financial assets (including trade and other debtors)

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. For financial instruments measured at cost less impairment an impairment is calculated as the difference between its carrying amount and the best estimate of the amount that the Company would receive for the asset if it were to be sold at the reporting date. Interest on the impaired asset continues to be recognised through the unwinding of the discount. Impairment losses are recognised in profit or loss. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Non-financial asset

The carrying amounts of the Company’s non-financial assets, other than stocks, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing is allocated to cash-generating units, or (“CGU”) that are expected to benefit from the synergies of the combination. For the purpose of goodwill impairment testing, if goodwill cannot be allocated to individual CGUs or groups of CGUs on a non-arbitrary basis, the impairment of goodwill is determined using the recoverable amount of the acquired entity in its entirety, or if it has been integrated then the entire entity into which it has been integrated.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss is reversed if and only if the reasons for the impairment have ceased to apply.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
1
Accounting policies
(Continued)
- 26 -
1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition. Provision is made for obsolete, slowing moving or defective stock where appropriate. Engineering spares are expensed in the profit or loss account and not held within the period end stock balance.

1.10
Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts are repayable on demand and form an integral part of the Company’s cash management. Bank account balances are presented gross in the financial statements with positive cash balances included within cash and cash equivalents and overdrawn balances included within creditors: amounts falling due within the period.

1.11
Financial instruments

In accordance with FRS 102.22, financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:

  1. a.they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company; and

  2. b.where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company’s own equity instruments or is a derivative that will be settled by the Company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company’s own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

 

Basic financial instruments

 

Trade and other debtors / creditors

Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.

1.12
Taxation

Tax on the profit/loss for the period comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
1
Accounting policies
(Continued)
- 27 -
Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

Deferred tax

Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. The following timing differences are not provided for: differences between accumulated depreciation and tax allowances for the cost of a fixed asset if and when all conditions for retaining the tax allowances have been met. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.

Deferred tax is provided in respect of the additional tax that will be paid or avoided on differences between the amount at which an asset (other than goodwill) or liability is recognised in a business combination and the corresponding amount that can be deducted or assessed for tax. Goodwill is adjusted by the amount of such deferred tax.

Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

1.13
Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
1
Accounting policies
(Continued)
- 28 -
1.14
Expenses

Operating lease

 

Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit and loss over the term of the lease as an integral part of the total lease expense.

 

Finance lease

 

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the rate implicit in the lease. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

Interest receivable and Interest payable

Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method.

1.15
Foreign exchange

Transactions in foreign currencies are translated to the Company’s functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation are recognised in the profit and loss account.

1.16

Other Income

Rental Income

 

Rental income from operating leases (net of any incentives given to lessees) is recognised on a straight line basis over the lease term.

 

Government Grants

 

Government grants made as a contribution towards fixed assets are recognised over the expected useful economic lives of the related assets.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 29 -
2
Judgements and key sources of estimation uncertainty

Customer rebates

The Company provides rebate arrangements, or other incentive arrangements, to its customers. In assessing sales related accruals, the Company reviews sales in the period and ensures that any accruals are in line with agreements in place with each customer.

 

Useful economic lives of property, plant and equipment

The judgements in relation to the useful economic lives of property, plant and equipment are reported in note 1.6.

 

There has been no impairment in the period following a review by the Company.

 

Dilapidations provision

The basis of recognition for the dilapidations provision are referred to in note 17.

 

Trade debtor recoverability

The Company assess the recoverability of all trade debtor balances. Any balances with significant uncertainty are provided for and unrecoverable debt is written off.

 

3
Revenue and other operating income
2023
2021
£
£
Turnover analysed by class of business
Sale of goods
43,288,109
36,010,237
2023
2021
£
£
Other operating income
RDEC tax credit
-
0
64,220
Rental income
81,250
65,000
Grant release
-
10,223
Coronavirus Job Retention Scheme grant
-
43,766
Recharge of wages and salaries
599,964
-

The recharge of wages and salaries is referred to in note 23.

 

All turnover arose within the United Kingdom.

 

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 30 -
4
Operating (loss)/profit
2023
2021
Operating (loss)/profit for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
46,000
27,500
Depreciation of owned tangible fixed assets
990,284
627,889
Depreciation of tangible fixed assets held under finance leases
74,597
102,398
Loss on disposal of tangible fixed assets
39,850
127,628
Amortisation of intangible assets
158,772
39,597
5
Employees

The average monthly number of persons (including directors) employed by the company during the period was:

2023
2021
Number
Number
Production
231
223
Warehouse
38
37
Office
71
68
Total
340
328

Their aggregate remuneration comprised:

2023
2021
£
£
Wages and salaries
13,231,094
11,285,426
Social security costs
1,396,570
797,825
Pension costs
326,870
252,647
14,954,534
12,335,898
Redundancy payments made or committed
60,290
63,246

 

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 31 -
6
Directors' remuneration
2023
2021
£
£
Remuneration for qualifying services
853,335
775,946

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021 - 3) and totalled £14,405 (2021: £11,139).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2021
£
£
Remuneration for qualifying services
284,417
183,750

Pension contributions made to the highest paid director were £5,527 (2021: £6,431).

 

The directors are considered to be key management personnel and their compensation is disclosed above.

7
Interest payable and similar expenses
2023
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
11,265
47,238
Other finance costs:
Interest on finance leases and hire purchase contracts
11,022
16,190
22,287
63,428
8
Taxation
2023
2021
£
£
Current tax
UK corporation tax for the current period
-
0
55,192
Adjustments in respect of prior periods
88,441
(28,378)
Total current tax
88,441
26,814
HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
8
Taxation
(Continued)
- 32 -
Deferred tax
Origination and reversal of timing differences
403,758
147,688
Adjustment in respect of prior periods
(45,488)
-
0
Total deferred tax
358,270
147,688
Total tax charge
446,711
174,502

The actual charge for the period can be reconciled to the expected (credit)/charge for the period based on the profit or loss and the standard rate of tax as follows:

2023
2021
£
£
(Loss)/profit before taxation
(3,381,355)
1,753,801
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(642,457)
333,222
Tax effect of expenses that are not deductible in determining taxable profit
(354,364)
(278,030)
Effect of change in corporation tax rate
132,301
-
0
Group relief
1,233,518
-
0
Permanents and non-qualifying depreciation
74,040
-
0
Under/(over) provided in prior years
42,953
(28,378)
Deferred tax movement not recognised
(39,280)
147,688
Taxation charge for the period
446,711
174,502

Corporation tax is calculated at 19% (2022:19%) of the estimated assessable profit for the year. The UK government announced on 3rd March 2021 that the government are intending to increase the corporation tax rate from 19% to 25% from April 2023. As this rate was substantively enacted at the balance sheet date it has been used to calculate the deferred tax balances.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 33 -
9
Intangible fixed assets
Software
£
Cost
At 4 October 2021
1,255,079
Additions
108,428
At 1 January 2023
1,363,507
Amortisation and impairment
At 4 October 2021
281,325
Amortisation charged for the period
158,772
At 1 January 2023
440,097
Carrying amount
At 1 January 2023
923,410
At 3 October 2021
973,754

Amortisation charges are included within 'Administrative expenses' in the Statement of Comprehensive Income.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 34 -
10
Tangible fixed assets
Short leasehold
Leasehold improve-ments
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
£
Cost
At 4 October 2021
662,030
3,513,666
246,203
5,856,296
122,608
427,811
12,601
10,841,215
Additions
-
0
19,693
9,404,983
1,042,841
293,602
176,160
-
0
10,937,279
Disposals
(46,849)
(67,033)
-
0
(5,785)
-
0
-
0
-
0
(119,667)
Dilapidations adjustment
(1,656)
-
0
-
0
-
0
-
0
-
0
-
0
(1,656)
Transfers
-
0
7,362,024
(9,521,974)
2,159,950
-
0
-
0
-
0
-
0
At 1 January 2023
613,525
10,828,350
129,212
9,053,302
416,210
603,971
12,601
21,657,171
Depreciation and impairment
At 4 October 2021
524,069
1,900,565
-
0
3,128,153
110,965
359,634
12,601
6,035,987
Depreciation charged in the period
8,294
296,517
-
0
681,671
16,495
83,497
-
0
1,086,474
Eliminated in respect of disposals
(24,644)
(39,321)
-
0
(2,069)
-
0
-
0
-
0
(66,034)
At 1 January 2023
507,719
2,157,761
-
0
3,807,755
127,460
443,131
12,601
7,056,427
Carrying amount
At 1 January 2023
105,806
8,670,589
129,212
5,245,547
288,750
160,840
-
0
14,600,744
At 3 October 2021
137,961
1,613,101
246,203
2,728,143
11,643
68,177
-
0
4,805,228
HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
10
Tangible fixed assets
(Continued)
- 35 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2021
£
£
Plant and equipment
370,490
694,331
11
Stocks
2023
2021
£
£
Raw materials and consumables
935,799
825,569
Work in progress
104,650
19,873
Finished goods and goods for resale
44,343
82,975
1,084,792
928,417
12
Debtors
2023
2021
Amounts falling due within one year:
£
£
Trade debtors
7,425,355
5,676,288
Other debtors
470,755
1,466,502
Prepayments and accrued income
341,971
316,513
8,238,081
7,459,303
The impairment loss recognised in the profit or loss for the period in respect of bad and doubtful trade debtors was £412,047 (2021 - £nil).
2023
2021
Amounts falling due after more than one year:
£
£
Other debtors
172,500
172,500
Total debtors
8,410,581
7,631,803

Other debtors due after more than one year relate to leasehold property and other rental deposits paid. Rent deposit deeds are in place for leasehold property deposits.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 36 -
13
Creditors: amounts falling due within one year
2023
2021
Notes
£
£
Bank loans and overdrafts
14
12,763,265
-
0
Obligations under hire purchase agreements
16
91,279
122,064
Factoring account
-
0
2,031,077
Trade creditors
1,794,649
2,450,351
Amounts owed to group undertakings
3,609,356
-
0
Corporation tax
-
0
55,192
Other taxation and social security
262,827
381,439
Other creditors
478,500
460,240
Accruals and deferred income
2,658,447
2,125,280
21,658,323
7,625,643

Bank loans and overdrafts refer to funds overdrawn in the HSBC current account. This current account is part of a group cash pool facility. See note 24.

 

The amounts owed to group undertakings are interest free and repayable on demand.

14
Loans and overdrafts
2023
2021
£
£
Bank overdrafts
12,763,265
-
0
Payable within one year
12,763,265
-
0

 

15
Creditors: amounts falling due after more than one year
2023
2021
Notes
£
£
Obligations under hire purchase agreements
16
18,700
145,869
HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 37 -
16
Finance lease and hire purchase obligations
2023
2021
Future minimum lease payments due under finance leases and hire purchase contracts:
£
£
Within one year
91,279
122,064
In two to five years
18,700
145,869
109,979
267,933

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4.5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

The hire purchase liabilities are secured on the assets to which they relate.

17
Provisions for liabilities
2023
2021
Notes
£
£
Dilapidations provision
591,026
639,530
Deferred tax liabilities
18
628,759
270,489
1,219,785
910,019

The dilapidations provision has been recognised to provide for expected re-instatement costs when the short leasehold leases expire. The directors obtained an independent professional surveyor report from Stiles Harold Williams in November 2018, which forms the basis of the current period provision. The total dilapidations provision estimated which is expected to be settled at the lease expiry date (the earliest of which is March 2032) is £1.33m, discounted to present value at a rate of 6.3%.

Movements on provisions apart from deferred tax liabilities:
Dilapidations provision
£
At 4 October 2021
639,530
Additional provisions in the period
7,062
Reversal of provision
(46,849)
Unwinding of discount
(8,717)
At 1 January 2023
591,026
HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
17
Provisions for liabilities
(Continued)
- 38 -

During the period the discount rate was increased to 6.30% (2021: 6.17%) resulting in the unwinding of discount decrease.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2021
Balances:
£
£
Accelerated capital allowances
1,800,000
270,489
Tax losses
(1,171,241)
-
628,759
270,489
2023
Movements in the period:
£
Liability at 4 October 2021
270,489
Charge to profit or loss
403,758
Prior year credit to profit or loss
(45,488)
Liability at 1 January 2023
628,759
19
Retirement benefit schemes
2023
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
326,870
252,647

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The company operates a number of defined contribution plans. The total expense relating to these plans in the current period was £326,870 (2021: £252,647) and at the balance sheet date £53,301 (2021: £69,817) was outstanding.

HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 39 -
20
Share capital
2023
2021
2023
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
-
227,333
-
227,333
B Ordinary shares of £1 each
-
438,592
-
438,592
C Ordinary shares of 1p each
-
135,000
-
1,350
D Ordinary shares of £1 each
-
80,108
-
80,108
Ordinary shares of 1p each
74,738,300
-
747,383
-
74,738,300
881,033
747,383
747,383

During the year A, B, C and D shares were fully reclassified to £0.01 Ordinary shares.

21
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2021
£
£
Within one year
757,666
762,926
Between two and five years
2,768,466
2,686,540
In over five years
4,992,913
5,312,220
8,519,045
8,761,686

During the period £1,021,664 was recognised as an expense in the profit and loss account in respect of operating leases (2021 - £481,013).

22
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2021
£
£
Acquisition of tangible fixed assets
-
7,112,008
HIGGIDY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 1 JANUARY 2023
- 40 -
23
Related party transactions

During the period, the Company was invoiced rent and service charges amounting to £126,965 (2021 - £101,928) by Jericho Management Company Limited, a company of which two of the directors are also directors and shareholders. All transactions are settled in cash, payable within 30 days and are unsecured. At the balance sheet date £1,965 (2021 - £26,928 ) was due to Jericho Management Company Limited.

 

During the period, Jericho Management Company Limited funded a company bonus of £599,964 following the completion of the full sale of the business to Samworth Brothers (Holdings) Limited. This transaction was fully settled in cash within 30 days of the employee remuneration.

 

During the period, the Company was invoiced rent and service charges amounting to £50,419 (2021 - £64,741) by JMC Pension Scheme, a pension scheme of which the directors are also trustees and beneficiaries. All transactions are settled in cash, payable within 30 days and are unsecured. At the balance sheet date £nil (2021 - £nil) was due to JMC Pension Scheme.

 

The Company has taken advantage of the exemption under FRS 102.33 'Related Party Transaction" for wholly owned subsidiaries not to disclose intra-group transactions.

 

Key management personnel includes all Directors of the Company, who together have authority and responsibility for planning, directing and controlling the activities of the Company. There are no key management personnel other than the Directors of the Company. The total compensation, including employer NI contributions, paid to key management personnel for services provided to the company was £981,191 (2021 - £775,946).

24
Contingencies

The Company is party to a multilateral guarantee on the bank accounts of Samworth Brothers (Holdings) Limited and its subsidiaries.

25
Ultimate controlling party

The Directors regard the Trustees of a number of Private Trusts to be the ultimate controlling body of the Company by virtue of their interest in the share capital of Samworth Brothers (Holdings) Limited.

The largest group in which the results of the Company are consolidated is that headed by Samworth Brothers (Holdings) Limited. The consolidated financial statements of the Group are available to the public and may be obtained from Chetwode House, 1 Samworth Way, Melton Mowbray, Leicestershire LE13 1GA.

The ultimate controlling party is Cibus Holdings Unlimited, a Company incorporated in Jersey.

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