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Marston Foods Limited

Annual Report and Unaudited Financial Statements
Year Ended 31 May 2023

Registration number: 07207619

 

Marston Foods Limited

Contents

Company Information

1

Directors' Report

2 to 3

Profit and Loss Account

4

Balance Sheet

5 to 6

Statement of Changes in Equity

7

Notes to the Unaudited Financial Statements

8 to 16

 

Marston Foods Limited

Company Information

Directors

Mr S T Collingwood

Ms E Tucker

Company secretary

Mrs T Billing

Registered office

Unit 5
Marston Park
Tytherington
Frome
BA11 5BS

Accountants

Francis Clark LLP
Accountant
Ground Floor
Blackbrook Gate 1
Blackbrook Business Park
Taunton
Somerset
TA1 2PX

 

Marston Foods Limited

Directors' Report for the Year Ended 31 May 2023

The directors present their report and the financial statements for the year ended 31 May 2023.

Principal activity

The principal activity of the company is that of the production of high quality, hand finished desserts.

Business review

Profit & loss account

The successful strategy from 2021/2022, namely consolidating sales and protecting margin, continued into 2022/2023 as we faced the same economic challenges including commodity price rises, chronic labour shortages, soaring distribution costs and increased energy costs. Despite this, sales remained at similar levels to the previous year with expected benefits from the new strategy delayed until the later part of the year. Unfortunately, sales were impacted further by a severe shortage of quality chocolate in the run up to Christmas and partial compensation was received as shown in other operating income.

The other focus during the year was to stabilize our margins and to at least mitigate the increase in costs. This was achieved by the redevelopment of our products to achieve a range that was commercially viable and targeted the change in consumer demands and the introduction of a major new retail customer which strengthened the customer base. These initiatives have proved highly successful with benefits being evidenced in the second half of the year.

Despite the continuing economic challenges in the current year 2023/2024 sales for the first 6 months have increased by 17% YOY. The Labour market has started to improve, and it is expected that new customers and products will be launched, increasing sales growth in line with our business plan.

Sustainability continues to be one of our key deliverables. As part of our plans from 2021/2022 the business was delighted to achieve a 38% reduction in CO2 emissions compared to previous year.

Balance sheet

There has been a requirement for additional debt finance in the year to support the short-term working capital requirements and business investment in plant & machinery of £98k, a significant part of which has been repaid in 2023/2024. Directors supported the business throughout the year reducing pension payments and dividends to the parent company in line with the business performance. Overall shareholders funds increased by £42K.

Principal Risks & Uncertainties

Inflation in wage costs will be a key factor in 2024 following the government announcement to increase the MLW from April 24. Management will work to mitigate the impact of these oncosts by focusing on operational efficiencies and other associated benefits. Energy will continue to be the largest spend at 24% of the total administrative expenses. Priority for the business will be finding ways to offset some of these cost in a sustainable manner. Commodity prices for our sector seem to have reached their peak and settled down but market fluctuations will be monitored closely, and appropriate actions taken if required. Finally, the economic environment in the UK is still having an impact on consumer spend so it is essential to ensure that the products we are delivering are viable for the current market. Therefore, innovation remains key to the business to ensure we can deliver newness into both existing and new sectors.

 

Marston Foods Limited

Directors' Report for the Year Ended 31 May 2023

Directors

Directors who held office during the year and up to the date of signature of the financial statements for the year ended 31st May 2023 were as follows:

Mr S T Collingwood
Ms E Tucker
 

Small companies provision statement

This report has been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

Approved and authorised by the Board on 29 January 2024 and signed on its behalf by:
 

.........................................
Mr S T Collingwood
Director

 

Marston Foods Limited

Profit and Loss Account

Year Ended 31 May 2023

Note

2023
£

2022
£

Turnover

 

7,598,286

8,579,807

Cost of sales

 

(6,441,033)

(6,912,211)

Gross profit

 

1,157,253

1,667,596

Administrative expenses

 

(1,303,772)

(1,242,720)

Other operating income

 

177,479

-

Operating profit

 

30,960

424,876

Other interest receivable and similar income

 

338

25

Interest payable and similar expenses

 

(114,846)

(56,260)

   

(114,508)

(56,235)

(Loss)/profit before tax

(83,548)

368,641

Tax on (loss)/profit

167,350

20,952

Profit for the financial year

 

83,802

389,593

 

Marston Foods Limited

Balance Sheet

31 May 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

4

966,953

986,518

Current assets

 

Stocks

5

491,982

516,818

Debtors

6

2,299,812

2,037,916

Cash at bank and in hand

 

72,235

91,875

 

2,864,029

2,646,609

Creditors: Amounts falling due within one year

7

(2,645,558)

(2,166,902)

Net current assets

 

218,471

479,707

Total assets less current liabilities

 

1,185,424

1,466,225

Creditors: Amounts falling due after more than one year

7

(155,634)

(282,240)

Provisions for liabilities

(21,103)

(217,000)

Net assets

 

1,008,687

966,985

Capital and reserves

 

Called up share capital

12

100

100

Revaluation reserve

50,688

55,296

Profit and loss account

957,899

911,589

Shareholders' funds

 

1,008,687

966,985

 

Marston Foods Limited

Balance Sheet

31 May 2023

For the financial year ending 31 May 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared and delivered in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006 and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 29 January 2024 and signed on its behalf by:
 

.........................................
Mr S T Collingwood
Director

Company Registration Number: 07207619

 

Marston Foods Limited

Statement of Changes in Equity

Year Ended 31 May 2023

Share capital
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 June 2022

100

55,296

911,589

966,985

Profit for the year

-

-

83,802

83,802

Dividends

-

-

(42,100)

(42,100)

Transfers

-

(4,608)

4,608

-

At 31 May 2023

100

50,688

957,899

1,008,687

Share capital
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 June 2021

100

59,904

827,088

887,092

Profit for the year

-

-

389,593

389,593

Dividends

-

-

(309,700)

(309,700)

Transfers

-

(4,608)

4,608

-

At 31 May 2022

100

55,296

911,589

966,985

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

1

General information

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

The address of its registered office is:
Unit 5
Marston Park
Tytherington
Frome
BA11 5BS

These financial statements were authorised for issue by the Board on 29 January 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

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

Going concern

The directors, having made all necessary enquiries and considered the ongoing impacts of; the UK’s exit from the EU and the Covid-19 pandemic on the labour market; the current UK economic uncertainty; significant inflationary pressures on business costs and the ‘cost of living crisis’ amongst consumers; are satisfied that it remains appropriate to prepare the financial statements on a going concern basis. In making this assessment the directors have forecasted financial and cash flow performance for a period of no less than 12 months from the date of the approval of these financial statements.

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

Key judgements and sources of estimation uncertainty

In the application of the company's accounting policies management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods

The key judgement that has a significant impact on the financial statements is in respect of going concern, as described above.

The key estimate that is significant to the financial statements is depreciation. Tangible fixed assets are carried at cost or valuation, less accumulated depreciation and any subsequent accumulated impairment loss. Plant and machinery is carried at deemed cost based upon a valuation carried out by external professionals as at 31 May 2018. This approach requires estimation of depreciation rates used. An assessment of the ongoing economic contribution of the assets of the company is undertaken to determine whether an indicator of impairment has occurred. The carrying amount is £966,953 (2022 - £986,518).

Revenue recognition

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

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch.

Government grants

Government revenue grants are accounted for under the accruals method. These are credited to the profit and loss account when the company is entitled to the income.

Tax

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

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

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

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

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and machinery

6.67% / 10% / 20% on cost

Fixtures, fittings & equipment

6.67% / 10% / 20% on cost

Computer equipment

20% on cost

Motor vehicles

15% on cost

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. The treatment of finance leases is as set out in the accounting policy for financial instruments detailed below.

Defined contribution pension obligation

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the profit and loss account in the period to which they relate.

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

Financial instruments

Classification
The company holds the following financial instruments:

• Short term trade and other debtors and creditors;
• Hire purchase and finance lease obligations;
• Bank loans; and
• Cash and bank balances.

All financial instruments are classified as basic.

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

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

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

Bank loans are initially measured at transaction price, including transaction costs, and are subsequently carried at amortised cost using the effective interest method.

Assets held under fire purchase and finance lease are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligations. The assets is subsequently measured as discused in the tangible fixed asset accounting policy above. Finance lease obligations are subsequently measured at amortised cost using the effective interest method.


 

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 62 (2022 - 89).

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

4

Tangible assets

Fixtures and fittings
£

Office equipment
£

Motor vehicles
 £

Plant and machinery
£

Total
£

Cost or valuation

At 1 June 2022

94,274

81,821

31,329

1,342,313

1,549,737

Additions

-

-

-

101,848

101,848

Disposals

-

-

(17,775)

(5,300)

(23,075)

At 31 May 2023

94,274

81,821

13,554

1,438,861

1,628,510

Depreciation

At 1 June 2022

63,749

60,573

16,220

422,677

563,219

Charge for the year

4,174

8,014

-

92,437

104,625

Eliminated on disposal

-

-

(2,666)

(3,621)

(6,287)

At 31 May 2023

67,923

68,587

13,554

511,493

661,557

Carrying amount

At 31 May 2023

26,351

13,234

-

927,368

966,953

At 31 May 2022

30,525

21,248

15,109

919,636

986,518

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

5

Stocks

2023
£

2022
£

Raw materials

343,500

389,093

Work in progress

16,956

11,484

Finished goods

131,526

116,241

491,982

516,818

6

Debtors

Note

2023
£

2022
£

Trade debtors

 

1,159,939

1,068,622

Amounts owed by group undertakings

10

337,970

237,651

Other debtors

 

645,484

594,288

Prepayments

 

156,419

106,404

Corporation tax

-

30,951

 

2,299,812

2,037,916

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

7

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

8

1,373,321

898,208

Trade creditors

 

963,328

915,691

Corporation tax

 

15,282

-

Taxation and social security

 

58,120

74,298

Other creditors

 

98,824

110,316

Accruals and deferred income

 

136,683

168,389

 

2,645,558

2,166,902

Note

2023
£

2022
£

Due after one year

 

Loans and borrowings

8

155,634

282,240

Loans and borrowings due within and after one year consist of bank loans and invoice discounting facilities, as well as hire purchase creditors, which are secured.

A significant proportion of the company's bank loans and other borrowings are repaid within one year of the year end thus reducing the interest burden on the company going forward.

8

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank borrowings

84,113

92,589

Hire purchase contracts

40,841

39,219

Other borrowings

1,248,367

766,400

1,373,321

898,208

2023
£

2022
£

Loans and borrowings due after one year

Bank borrowings

104,167

189,933

Hire purchase contracts

51,467

92,307

155,634

282,240

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

9

Financial commitments, guarantees and contingencies

Amounts not provided for in the balance sheet

The total amount of financial commitments not included in the balance sheet is £387,457 (2022 - £94,733). The commitment relates to non-cancellable operating leases.

There is a composite company unlimited multilateral guarantee given by Marston Foods Limited and S C (Holdings) Limited in respect of bank borrowings. The total value of guarantees not included in the balance sheet is £Nil (2022 - £Nil).

10

Related party transactions

Transactions with directors

2023

At 1 June 2022
£

Advances to director
£

Repayments by director
£

At 31 May 2023
£

A Director

Loan - interest free, due on demand

440,332

37,105

-

477,437

         
       

 

2022

At 1 June 2021
£

Advances to director
£

Repayments by director
£

At 31 May 2022
£

A Director

Loan - interest free, due on demand

397,714

42,618

-

440,332

         
       

 

11

Parent and ultimate parent undertaking

The company's immediate parent is S C (Holdings) Limited, incorporated in England and Wales.

  These financial statements are available upon request from Unit 5 Marston Park, Frome, Somerset, BA11 5BS.

 

 

Marston Foods Limited

Notes to the Unaudited Financial Statements

Year Ended 31 May 2023

12

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

100

100

100

100