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Registration number: 09347785

THF Holdings Ltd

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2022

 

THF Holdings Ltd

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 10

Consolidated Income Statement

11

Consolidated Statement of Financial Position

12

Statement of Financial Position

13

Consolidated Statement of Changes in Equity

14

Statement of Changes in Equity

15

Consolidated Statement of Cash Flows

16

Notes to the Financial Statements

17 to 45

 

THF Holdings Ltd

Company Information

Directors

A Thompson

F L Hamilton-Fox

A L Thompson

S Thompson

L Gray

R Grieveson

M D Proudfoot

Company secretary

S Thompson

Registered office

Hexham Villa
Egton Terrace
Birtley
Co. Durham
DH3 1LX

Solicitors

Ward Hadaway
Sandgate House
102 Quayside
Newcastle upon Tyne
NE1 3DX

Auditor

Azets Audit Services
Chartered Accountants & Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS

 

THF Holdings Ltd

Strategic Report for the Year Ended 31 December 2022

The directors present their strategic report for the year ended 31 December 2022.

Principal activity

The principal activity of the group is that of a holding company for the group. The principal activity of the group is the manufacture and distribution of specialist candles and diffusers.

Fair review of the business

Turnover for the Group was £49,322k compared to £36,052k, an increase of 37%. Profit before tax was £79k compared to £2,195k, a decrease of 96%. Average staffing levels were 428 in 2021 increasing to 529 in 2022. The group continues to be focused upon our customer needs and operational efficiencies which it achieves through planned investment in facilities and new equipment.

The consolidated statement of financial position again shows a strong position, £6,519k at December 2022, compared to £6,398 at December 2021. The group is fully committed to inward investment particularly in its infrastructure, product development and research and development.

The group's key financial and other performance indicators during the year were as follows:

 

Unit

2022

2021

Sales growth

%

37

43

Gross margins

%

31

32

The profit margin before tax is 0.2% in 2022 compared to 6.1% in 2021.

Management use a range of performance measures to monitor and review the group results. Each individual company is controlled by monthly reviews into financial and non-financial figures including sales, gross margins, cost control, production capacities and staff utilisation. The management team look at historic results as well as preparing annual budgets and regular financial forecasting.

Principal risks and uncertainties

The principal business risk is associated with the reliance on a small number of customers and the impact their changing demand has on our utilisation of resources. We continue to invest in training our staff, particularly in product training to ensure that our customers know that we are at the forefront of technology in our marketplace. The Directors constantly consider the issues which may impact upon the business and take appropriate action to deal with them.

Future developments

The group is formalising development agreements with our existing customers to secure continued collaborative relationships while also looking to diversify the risk of a small customer base by adding new opportunities and markets across all the group companies. The group continues to monitor potential acquisition opportunities that would match our core functions and growth strategies. The board believes that the group is in a very strong position to take advantage of the opportunities available and looks forward to the forthcoming year and beyond with cautious optimism.

Section 172(1) statement

Under section 172 of the Companies Act 2006, the Directors have a duty to act in good faith in a way that is most likely to promote the success of the group for the benefit of its members as a whole, having regard to the likely consequences of decisions for the long term, the interests of the group's employees, the need to foster relationships with other stakeholders, the impact on the community and the environment and maintaining a reputation for high standards of business conduct. Key decisions made by the board during the year were considered with the aforesaid duty to act in good faith.

All business decisions are taken with due regard to the primary stakeholders who impact the performance of the business including: Our Employees; Our Customers; Our Suppliers; and Our Shareholders.

 

THF Holdings Ltd

Strategic Report for the Year Ended 31 December 2022 (continued)

We constantly monitor current market conditions and explore opportunities to increase shareholder value. Our dependence on one large customer is a recognised risk for the group. The group manages this risk by formalising the ties between us and out main customers while also seeking out new customers and markets to diversify the risk. We continue to invest in our R&D function to provide products that new and existing customers want at competitive prices and by maintaining strong relationships with customers

We continue to invest internally in our people and methods to ensure we can maximise our opportunities and satisfy our customer expectations. We have invested in progressive programmes of training, communication and consultation as well as in our employees wellbeing. We aim to provide equal opportunities to all current and prospective employees in a diverse and inclusive environment.

Supplier relationships are important across all areas of the business. The company has developed key and positive long-term relationships that have ensured a stable and sustainable supply chain.

We aim to continue to develop our people, systems and product portfolio to promote the success of the group for the benefit of its members as a whole, having regard to the likely consequences of decisions for the long term, the interests of the group's employees, the need to foster relationships with other stakeholders, the impact on the community and the environment (as detailed in the "Carbon Reporting" section) and holding ourselves to high standards of business conduct.

Approved and authorised for issue by the Board on 9 February 2024 and signed on its behalf by:
 

.........................................
M D Proudfoot
Director

 

THF Holdings Ltd

Directors' Report for the Year Ended 31 December 2022

The directors present their report and the for the year ended 31 December 2022.

Directors of the group

The directors who held office during the year were as follows:

A Thompson

F L Hamilton-Fox

A L Thompson

S Thompson - Company secretary and director

The following directors were appointed after the year end:

L Gray (appointed 16 January 2024)

R Grieveson (appointed 16 January 2024)

M D Proudfoot (appointed 7 January 2024)

Dividends

Details of dividends paid in the year are included on note 25. The directors have not recommended a final dividend.

Financial instruments

Objectives and policies

The group has an established, structured approach to risk management. The group's activities expose it to a variety of financial risks, including the effects of credit, liquidity and cash flow, and interest rate risks. The group has adopted risk management policies that seek to mitigate these risks in a cost effective manner. Financial assets that expose the group to financial risk consist primarily of trade debtors and cash. Financial liabilities that expose the group to financial risk consist principally of trade creditors and loans.

Price risk, credit risk, liquidity risk and cash flow risk

Credit risk is the risk of loss in the value of financial assets due to counterparties failing to meet all or part of their obligations. The credit management policy of the group ensures that the appropriate credit checks are made on customers prior to any sales being made. Credit accounts for individual customers are assigned on a case by case basis after reviewing the financial stability of the customer.

Liquidity risk is the risk that the group does not have sufficient liquid assets to meet its obligations as they fall due. Liquidity is maintained at a prudent level and the group ensures there is an adequate liquidity buffer to cover contingencies. The group maintains sufficient cash and open committed credit lines from its bankers to meet its funding requirements.

The group has interest bearing liabilities. Interest rate risk re unfavourable movements in interest rates are not perceived as being material to the accounts due to the arrangements in place.

Employment of disabled persons

The Group gives full consideration to applications for employment from disabled persons where the candidate's particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion.

Where existing employees become disabled, it is the Group's policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.

 

THF Holdings Ltd

Directors' Report for the Year Ended 31 December 2022 (continued)

Environmental report

Emissions and energy consumption

During the year ended 31 December 2022, THF Group Ltd has gathered data regarding scope one, two, and three carbon emissions (as defined by the GHG Protocol) from its UK Operations as defined by the requirement of the Streamlined Energy and Carbon Reporting (SECR) legislation.

Energy (kWh)

2022

2021

Scope 1 (emissions from gas and fuel for fleet vehicles)

121,605

68,721

Scope 2 (emissions from electricity and gas)

821,684

1,687,738

Scope 3 (emissions from business travel in employee cars)

63,892

52,355

Total energy

1,007,181

1,808,814

     

Emissions (tCO2e)

   

Scope 1 (emissions from gas and fuel for fleet vehicles)

34

23

Scope 2 (emissions from electricity and gas)

271

283

Scope 3 (emissions from business travel in employee cars)

14

11

Total SECR emissions

319

317

     

Specific Carbon Consumption

   

SCC (tCO2e / £000 revenue)

0.0066

0.0089

The combined Scope 1, Scope 2 and Scope 3 carbon emissions for the period recorded was 319 tCO2e (317 tCO2e-2021). The energy consumed in the period is 1,007,181 kWh (1,808,814 kWh -2021). The Specific Carbon Consumption (SSC) for the period is calculated a 0.0066 tCO2e/£000 revenue (2021 – 0.009)

During the period of reporting a number of practical actions to reduce energy consumption have been undertaken including the completion of installing LED lights across all sites, a reduction in high energy multiple screen usage and auto-close software in all computers. We also invested in improved LEV Air Filtration in our main manufacturing facility and implemented improved segregation and recycling of plastics. A plan was also put in place to install solar panels for the provision of clean energy that will be completed in 2023.

 

THF Holdings Ltd

Directors' Report for the Year Ended 31 December 2022 (continued)

Going concern

The financial statements have been prepared on a going concern basis.

The group meets its day to day working capital requirements through cash generated from operations and external borrowings.

The group’s forecasts and projections for the next twelve months show that the group should be able to continue in operational existence for that period, taking into account possible changes in trading performance.

The directors are confident in the ability of the group on the basis that it has secured additional short term bank finance and has obtained the support of its majority shareholder to provide short term working capital should this be necessary for a minimum period of 12 months from the date of approval of the financial statements.

Having considered the current cash forecasts of the group the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing these financial statements. The group therefore continues to adopt the going concern basis in preparing its financial statements.

Future developments

See disclosures within the Strategic Report regarding future developments of the group.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Azets Audit Services as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved and authorised for issue by the Board on 9 February 2024 and signed on its behalf by:
 

.........................................
M D Proudfoot
Director

 

THF Holdings Ltd

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 group and parent company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent 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 group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

THF Holdings Ltd

Independent Auditor's Report to the Members of THF Holdings Ltd

Opinion

We have audited the financial statements of THF Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022, which comprise the Consolidated Income Statement, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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).

In our opinion the financial statements:

give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2022 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

THF Holdings Ltd

Independent Auditor's Report to the Members of THF Holdings Ltd (continued)

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 7], 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.

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

THF Holdings Ltd

Independent Auditor's Report to the Members of THF Holdings Ltd (continued)

Enquiry of management and those charged with governance around actual and potential litigation and claims;

Enquiry of staff in finance and compliance functions to identify any instances of non-compliance with laws and regulations

Reviewing board minutes;

Challenging assumptions and judgements made by management in their significant accounting estimates;

Review financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and

Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.

Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: employment law and compliance with the UK Companies Act and tax legislation.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

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

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.

......................................
Brian Laidlaw BA CA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
Statutory Auditor
Chartered Accountants
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS

9 February 2024

Azets Audit Services is a trading name of Azets Audit Services Limited

 

THF Holdings Ltd

Consolidated Income Statement for the Year Ended 31 December 2022

Note

2022
£

2021
£

Turnover

3

49,322,508

36,052,059

Cost of sales

 

(34,189,491)

(24,380,021)

Gross profit

 

15,133,017

11,672,038

Distribution costs

 

(305,301)

(157,730)

Administrative expenses

 

(14,638,654)

(9,465,463)

Other operating income

4

42,212

105,770

Operating profit

5

231,274

2,154,615

Share of profit of joint venture

 

60,896

166,468

Other interest receivable and similar income

44

-

Interest payable and similar expenses

6

(213,007)

(125,615)

Profit before tax

 

79,207

2,195,468

Taxation

10

42,223

(414,842)

Profit for the financial year

 

121,430

1,780,626

Profit attributable to:

 

Owners of the company

 

133,884

1,788,716

Non controlling interests

 

(12,454)

(8,090)

 

121,430

1,780,626

The above results were derived from continuing operations.

The group has no recognised gains or losses for the year other than the results above.

 

THF Holdings Ltd

(Registration number: 09347785)
Consolidated Statement of Financial Position as at 31 December 2022

Note

2022
£

2021
£

Fixed assets

 

Intangible assets

11

1,701,265

227,310

Tangible assets

12

8,213,749

6,089,475

Investments

13

-

166,522

 

9,915,014

6,483,307

Current assets

 

Stocks

15

8,270,664

7,966,684

Debtors

16

10,889,388

10,145,702

Cash at bank and in hand

 

216,901

1,078,521

 

19,376,953

19,190,907

Creditors: Amounts falling due within one year

18

(18,170,303)

(15,760,856)

Net current assets

 

1,206,650

3,430,051

Total assets less current liabilities

 

11,121,664

9,913,358

Creditors: Amounts falling due after more than one year

18

(3,917,803)

(3,008,362)

Provisions for liabilities

20

(684,222)

(506,787)

Net assets

 

6,519,639

6,398,209

Capital and reserves

 

Called up share capital

22

308

308

Profit and loss account

23

6,539,835

6,405,951

Non controlling interests

 

(20,504)

(8,050)

Total equity

 

6,519,639

6,398,209

Approved and authorised for issue by the Board on 9 February 2024 and signed on its behalf by:
 

.........................................
M D Proudfoot
Director

 

THF Holdings Ltd

(Registration number: 09347785)
Statement of Financial Position as at 31 December 2022

Note

2022
£

2021
£

Fixed assets

 

Intangible assets

11

53,333

80,000

Tangible assets

12

3,674,345

3,943,785

Investments

13

4,101,587

2,150,260

 

7,829,265

6,174,045

Current assets

 

Debtors

16

1,391,149

761,095

Cash at bank and in hand

 

57,218

434,643

 

1,448,367

1,195,738

Creditors: Amounts falling due within one year

18

(2,391,736)

(803,313)

Net current (liabilities)/assets

 

(943,369)

392,425

Total assets less current liabilities

 

6,885,896

6,566,470

Creditors: Amounts falling due after more than one year

18

(2,649,156)

(2,710,008)

Provisions for liabilities

20

(63,395)

(156,979)

Net assets

 

4,173,345

3,699,483

Capital and reserves

 

Called up share capital

308

308

Merger reserve

2,155,644

2,155,644

Profit and loss account

2,017,393

1,543,531

Total equity

 

4,173,345

3,699,483


 

Approved and authorised for issue by the Board on 9 February 2024 and signed on its behalf by:
 

.........................................
M D Proudfoot
Director

 

THF Holdings Ltd

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2022
Equity attributable to the parent company

Share capital
£

Profit and loss account
£

Total
£

Non- controlling interests
£

At 1 January 2021

308

5,432,725

5,433,033

-

Profit/(loss) for the year

-

1,788,716

1,788,716

(8,050)

Total comprehensive income

-

1,788,716

1,788,716

(8,050)

Dividends

-

(815,490)

(815,490)

-

At 31 December 2021

308

6,405,951

6,406,259

(8,050)

Share capital
£

Profit and loss account
£

Total
£

Non- controlling interests
£

At 1 January 2022

308

6,405,951

6,406,259

(8,050)

Profit/(loss) for the year

-

133,884

133,884

(12,454)

Total comprehensive income

-

133,884

133,884

(12,454)

At 31 December 2022

308

6,539,835

6,540,143

(20,504)

 

THF Holdings Ltd

Statement of Changes in Equity for the Year Ended 31 December 2022

Share capital
£

Merger reserve
£

Profit and loss account
£

Total
£

At 1 January 2021

308

2,155,644

1,591,132

3,747,084

Profit for the year

-

-

767,889

767,889

Total comprehensive income

-

-

767,889

767,889

Dividends

-

-

(815,490)

(815,490)

At 31 December 2021

308

2,155,644

1,543,531

3,699,483

Share capital
£

Merger reserve
£

Profit and loss account
£

Total
£

At 1 January 2022

308

2,155,644

1,543,531

3,699,483

Profit for the year

-

-

473,862

473,862

Total comprehensive income

-

-

473,862

473,862

At 31 December 2022

308

2,155,644

2,017,393

4,173,345

 

THF Holdings Ltd

Consolidated Statement of Cash Flows for the Year Ended 31 December 2022

Note

2022
£

2021
£

Cash flows from operating activities

Profit for the year

 

121,430

1,780,626

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

861,873

421,793

Finance income

(44)

-

Finance costs

6

213,007

125,615

Share of profit/loss of equity accounted investees

 

(60,896)

(166,468)

Income tax expense

10

(42,223)

414,842

 

1,093,147

2,576,408

Working capital adjustments

 

Decrease/(increase) in stocks

15

210,495

(4,611,852)

Decrease/(increase) in debtors

16

857,174

(2,883,499)

(Decrease)/increase in creditors

18

(2,233,423)

3,318,441

Decrease in deferred income, including government grants

 

-

(18,747)

Cash generated from operations

 

(72,607)

(1,619,249)

Income taxes received/(paid)

10

8,756

(337,894)

Net cash flow from operating activities

 

(63,851)

(1,957,143)

Cash flows from investing activities

 

Interest received

44

-

Acquisitions of tangible assets

(705,664)

(575,625)

Acquisition of intangible assets

11

(19,123)

(209,677)

Acquisition of subsidiaries less cash acquired

 

(1,700,720)

(50)

Net cash flows from investing activities

 

(2,425,463)

(785,352)

Cash flows from financing activities

 

Interest paid

6

(213,007)

(125,615)

Proceeds from bank borrowing draw downs

 

805,000

50,000

Repayment of bank borrowing

 

(1,006,760)

(545,425)

Proceeds from other borrowing draw downs

 

1,017,231

2,799,175

Payments to finance lease creditors

 

(255,780)

(140,408)

Dividends paid

-

(815,490)

Net cash flows from financing activities

 

346,684

1,222,237

Net decrease in cash and cash equivalents

 

(2,142,630)

(1,520,258)

Cash and cash equivalents at 1 January

 

1,078,521

2,598,779

Cash and cash equivalents at 31 December

 

(1,064,109)

1,078,521

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022

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 Hexham Villa, Egton Terrace, Birtley, Co. Durham, DH3 1LX.
 

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 compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' (FRS102) and applicable legislation as set out in the Companies Act 2006 and Schedule 1 of the Large and Medium-Sized companies and Groups (Accounts and Reports) Regulations 2008.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

These financial statements are prepared in sterling which is the functional currency of the entity.

Summary of disclosure exemptions

The parent entity satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102:

(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.

The Company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2022.

The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account. The company made a profit after tax for the financial year of £473,862 (2021 - profit of £767,889).

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

An entity is treated as a joint venture where the group is party to a contractual agreement with one or more parties from outside the group to undertake an economic activity that is subject to joint control.

In the consolidated accounts, interests in joint ventures are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investor’s share of the profit or loss, other comprehensive income and equity of the associate, or joint venture. The consolidated statement of comprehensive income includes the group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the group. In the consolidated balance sheet, the interests in joint ventures are shown as the group's share of the identifiable net assets, including any unamortised premium paid on acquisition.

Any premium on acquisition is included within the equity method accounted figure in the financial statements as goodwill. This goodwill is amortised over 5 years. Where there are indicators of impairment, the investment as a whole is tested for impairment.

In accordance with the equity method of accounting, losses are only recognised to the extent that the carrying amount of the investment is reduced to £nil at which point no further losses are recognised.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)

Judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

Assessing indicators of impairment - In assessing whether there have been indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Useful economic lives of tangible assets - The annual depreciation charge is sensitive to changes in the estimated useful lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, future investments and economic utilisation. The value charged to the Income Statement during the year is £570,214 (2021 - £396,266).

Useful economic lives of intangible assets - Amortisation is calculated so as to write off the cost of an intangible asset, over the useful economic life of that asset. An estimate of the useful economic life of assets is detailed in the amortisation accounting policy. The value charged to the Income Statement during the year is £291,659 (2021 - £25,527).

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably.

Government grants

Government grants in respect of specific projects are credited to a deferred income account and are released to the income statement over the life of the project.

Grants of a revenue nature are credited to the income statement in the period to which they relate. Government grants are presented separately and disclosed in Other operating income in the income statement. Other operating income in the year comprises the UK Government assistance provided through Coronavirus Job Retention Scheme and the Small Business Grant Fund during the Covid-19
pandemic.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Research and development

Research and development expenditure is written off in the period in which it is incurred.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements. Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)

Tangible assets

Tangible assets are stated in the statement of financial position 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, other than land and properties under construction over their estimated useful lives, as follows:

 

Asset class

Depreciation method and rate

 

Land and buildings

2 - 6.67% straight line

 

Plant and machinery

15 - 25% reducing balance

 

Fixtures and fittings

25% reducing balance

 

Motor vehicles

25% reducing balance

 

Equipment

25% reducing balance

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are recorded at the fair value at the acquisition date.

Amortisation

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

Asset class

Amortisation method and rate

Goodwill

20% straight line

Computer software

20% straight line

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)


Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment. Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.

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 inventories 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.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.

Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

2

Accounting policies (continued)

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.

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

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

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

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

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

3

Turnover

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

2022
£

2021
£

Sale of goods

49,322,508

36,052,059

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

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

3

Turnover (continued)

2022
£

2021
£

UK

47,671,591

34,340,994

Europe

1,158,148

1,647,551

Rest of world

492,769

63,514

49,322,508

36,052,059

4

Other operating income

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

2022
£

2021
£

Coronavirus job retention scheme

105

57,290

Rental income

42,107

48,480

42,212

105,770

5

Operating profit

Arrived at after charging/(crediting)

2022
£

2021
£

Depreciation expense

570,214

396,266

Amortisation expense

291,659

25,527

Research and development cost

110,284

124,251

Foreign exchange losses

222,076

36,053

6

Interest payable and similar expenses

2022
£

2021
£

Interest on bank overdrafts and borrowings

154,996

102,118

Interest on obligations under finance leases and hire purchase contracts

56,201

23,497

Interest expense on other finance liabilities

1,810

-

213,007

125,615

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

7

Staff costs

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

2022
£

2021
£

Wages and salaries

15,874,214

9,771,565

Social security costs

1,619,371

981,100

Other short-term employee benefits

8,984

11,735

Pension costs, defined contribution scheme

230,795

262,237

17,733,364

11,026,637

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

2022
No.

2021
No.

Production

367

334

Administration and support

133

84

Management

29

10

529

428

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2022
£

2021
£

Remuneration

693,500

645,000

Contributions paid to money purchase schemes

23,201

95,275

716,701

740,275

During the year the number of directors who were receiving benefits and share incentives was as follows:

2022
No.

2021
No.

Accruing benefits under money purchase pension scheme

4

4

In respect of the highest paid director:

2022
£

2021
£

Remuneration

192,500

185,000

Company contributions to money purchase pension schemes

3,330

21,319

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

9

Auditors' remuneration

2022
£

2021
£

Audit of these financial statements

16,380

5,800

Audit of the financial statements of subsidiaries of the company pursuant to legislation

44,227

31,500

60,607

37,300

10

Taxation

Tax charged/(credited) in the consolidated income statement

2022
£

2021
£

Current taxation

UK corporation tax

23,452

220,074

UK corporation tax adjustment to prior periods

(132,109)

(78,905)

(108,657)

141,169

Deferred taxation

Arising from origination and reversal of timing differences

248

140,559

Arising from changes in tax rates and laws

66,186

133,114

Total deferred taxation

66,434

273,673

Tax (receipt)/expense in the income statement

(42,223)

414,842

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

10

Taxation (continued)

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2021 - lower than the standard rate of corporation tax in the UK) of 19% (2021 - 19%).

The differences are reconciled below:

2022
£

2021
£

Profit before tax

79,207

2,195,468

Corporation tax at standard rate

15,049

417,139

Increase from effect of different UK tax rates on some earnings

34,674

121,623

Effect of revenues exempt from taxation

-

(54,380)

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

138,813

130,514

Deferred tax (credit)/expense from unrecognised tax loss or credit

(20,657)

4,647

Decrease in UK and foreign current tax from adjustment for prior periods

(172,733)

(67,413)

Tax (decrease)/increase from effect of capital allowances and depreciation

(37,369)

59,362

Tax decrease from effect of adjustment in research and development tax credit

-

(196,650)

Total tax (credit)/charge

(42,223)

414,842

Deferred tax

Group

Deferred tax assets and liabilities

2022

Liability
£

Accelerated capital allowances

752,343

Pension plan obligations

(8,258)

Tax losses

(59,863)

684,222

2021

Liability
£

Accelerated capital allowances

512,699

Pension plan obligations

(5,912)

506,787

In the Spring Budget 2020, the Government announced that from 1 April 2020 the corporation tax rate would remain at 19% (rather than reducing to 17% as previously enacted). This new law was deemed substantively enacted on 17 March 2020. In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase to 25%. This law was deemed substantively enacted on 24 May 2021 and the deferred tax balances at the year end have been calculated based on this rate.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

11

Intangible assets

Group

Goodwill
 £

Contractual customer relationships
 £

Computer software
£

Total
£

Cost or valuation

At 1 January 2022

574,076

80,000

189,883

843,959

Additions acquired separately

-

-

19,123

19,123

Acquired through business combinations

1,746,491

-

-

1,746,491

At 31 December 2022

2,320,567

80,000

209,006

2,609,573

Amortisation

At 1 January 2022

574,076

-

42,573

616,649

Amortisation charge

228,959

26,667

36,033

291,659

At 31 December 2022

803,035

26,667

78,606

908,308

Carrying amount

At 31 December 2022

1,517,532

53,333

130,400

1,701,265

At 31 December 2021

-

80,000

147,310

227,310

Company

Goodwill
 £

Contractual customer relationships
 £

Total
£

Cost or valuation

At 1 January 2022

245,577

80,000

325,577

At 31 December 2022

245,577

80,000

325,577

Amortisation

At 1 January 2022

245,577

-

245,577

Amortisation charge

-

26,667

26,667

At 31 December 2022

245,577

26,667

272,244

Carrying amount

At 31 December 2022

-

53,333

53,333

At 31 December 2021

-

80,000

80,000

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

12

Tangible assets

Group

Land and buildings
£

Fixtures and fittings
£

Plant and machinery
£

Equipment
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 January 2022

4,995,385

630,584

2,091,216

303,571

237,745

8,258,501

Additions

509,169

316,185

698,175

130,362

100,525

1,754,416

Acquired through business combinations

322,263

-

488,745

66,658

62,406

940,072

At 31 December 2022

5,826,817

946,769

3,278,136

500,591

400,676

10,952,989

Depreciation

At 1 January 2022

460,440

404,066

1,061,434

128,584

114,502

2,169,026

Charge for the year

110,252

97,623

231,247

74,472

56,620

570,214

At 31 December 2022

570,692

501,689

1,292,681

203,056

171,122

2,739,240

Carrying amount

At 31 December 2022

5,256,125

445,080

1,985,455

297,535

229,554

8,213,749

At 31 December 2021

4,534,945

226,518

1,029,782

174,987

123,243

6,089,475

Included within the net book value of land and buildings above is £4,612,054 (2021 - £3,814,213) in respect of freehold land and buildings and £644,071 (2021 - £720,732) in respect of long leasehold land and buildings.
 

Assets held under finance leases and hire purchase contracts

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

 

2022
£

2021
£

Plant and machinery

1,159,398

408,169

Fixtures and fittings

179,942

36,170

Motor vehicles

139,246

-

 

1,478,586

444,339

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

12

Tangible assets (continued)

Company

Land and buildings
£

Long leasehold land and buildings
£

Fixtures and fittings
£

Office equipment
£

Total
£

Cost or valuation

At 1 January 2022

216,781

3,898,033

11,781

48,475

4,175,070

Additions

-

1,318

11,647

31,276

44,241

Disposals

(216,781)

-

-

-

(216,781)

At 31 December 2022

-

3,899,351

23,428

79,751

4,002,530

Depreciation

At 1 January 2022

-

223,029

2,980

5,276

231,285

Charge for the year

-

77,979

4,359

14,562

96,900

At 31 December 2022

-

301,008

7,339

19,838

328,185

Carrying amount

At 31 December 2022

-

3,598,343

16,089

59,913

3,674,345

At 31 December 2021

216,781

3,675,004

8,801

43,199

3,943,785

Included within the net book value of land and buildings above is £Nil (2021 - £216,781) in respect of freehold land and buildings and £3,598,343 (2021 - £3,675,004) in respect of long leasehold land and buildings.
 

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

13

Investments

Group

2022
£

2021
£

Investments in joint ventures

-

166,522

Joint ventures

£

Cost

At 1 January 2022

166,522

Share of profit of joint venture

60,896

Disposals

(227,418)

At 31 December 2022

-

Provision

At 1 January 2022

-

At 31 December 2022

-

Carrying amount

At 31 December 2022

-

At 31 December 2021

166,522

Details of undertakings

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

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2022

2021

Joint ventures

Colorlites Holdings Limited*

Lower Lodge, Vann Road, Ferhurst, Haselmere, Surrey, GN27 3NH

Ordinary

100%

50%

 

England

     

* indicates direct investment of the company

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

13

Investments (continued)

Company

2022
£

2021
£

Investments in subsidiaries

4,101,587

2,150,210

Investments in joint ventures

-

50

4,101,587

2,150,260

Subsidiaries

£

Cost or valuation

At 1 January 2022

3,393,074

Additions

1,951,377

At 31 December 2022

5,344,451

Provision

At 1 January 2022

1,242,864

At 31 December 2022

1,242,864

Carrying amount

At 31 December 2022

4,101,587

At 31 December 2021

2,150,210

Joint ventures

£

Cost

At 1 January 2022

50

Disposals

(50)

At 31 December 2022

-

Provision

At 1 January 2022

-

At 31 December 2022

-

Carrying amount

At 31 December 2022

-

At 31 December 2021

50

Details of undertakings

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

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

13

Investments (continued)

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2022

2021

Subsidiary undertakings

Contract Candles & Diffusers Ltd

Hexham Villa, Egton Terrace, Birtley, Co. Durham, United Kingdom, DH3 1LX

Ordinary

100%

100%

 

England

     

Lower Lodge Candles Limited

Hexham Villa, Egton Terrace, Birtley, Co. Durham, United Kingdom, DH3 1LX

Ordinary

100%

100%

 

England

     

Oakleaf Candles Limited

Hexham Villa, Egton Terrace, Birtley, Co. Durham, United Kingdom, DH3 1LX

Ordinary

100%

100%

 

England

     

Contract Candles Limited

Hexham Villa, Egton Terrace, Birtley, Co. Durham, United Kingdom, DH3 1LX

Ordinary

100%

100%

 

England

     

THF Homes Limited

Hexham Villa Egton Terrace, Birtley, Chester Le Street, England, DH3 1LX

Ordinary

100%

100%

 

England

     

THF Glassware Limited

Hexham Villa Egton Terrace, Birtley, Chester Le Street, England, DH3 1LX

Ordinary

100%

100%

 

England

     

THFS Digital Limited

Hexham Villa Egton Terrace, Birtley, Chester Le Street, England, DH3 1LX

Ordinary

60%

60%

 

     

Functional Fitness South East Limited

Hexham Villa, Egton Terrace, Birtley, Co. Durham, United Kingdom, DH3 1LX

Ordinary

100%

100%

 

England

     

Colorlites Holdings Limited

Lower Lodge, Vann Road, Ferhurst, Haslemere, Surrey, GN27 3NH

Ordinary

100%

50%

 

England

     

Colorlites Limited

Lower Lodge, Vann Road, Ferhurst, Haslemere, Surrey, GN27 3NH

Ordinary

100%

50%

 

England

     
 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

13

Investments (continued)

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

JFD (Midhurst) Limited

Hexham Villa, Egton Terrace, Birtley, Co. Durham, United Kingdom, DH3 1LX

Ordinary

100%

0%

 

England

     

Subsidiary undertakings

Contract Candles & Diffusers Ltd

The principal activity of Contract Candles & Diffusers Ltd is the manufacture, sale and distribution of luxury candles, diffusers and associated products.

Lower Lodge Candles Limited

The principal activity of Lower Lodge Candles Limited is the sale and distribution of luxury candles, diffusers and associated products.

Oakleaf Candles Limited

The principal activity of Oakleaf Candles Limited is that of a dormant company.

Contract Candles Limited

The principal activity of Contract Candles Limited is that of a dormant company.

THF Homes Limited

The principal activity of THF Homes Limited is the buying and selling of own real estate.

THF Glassware Limited

The principal activity of THF Glassware Limited is the retail sale of hardware, paints and glass in specialised stores.

THFS Digital Limited

The principal activity of THFS Digital Limited is information technology service activities.

Functional Fitness South East Limited

The principal activity of Functional Fitness South East Limited is that of a dormant company.

Colorlites Holdings Limited

The principal activity of Colorlites Holdings Limited is that of an intermediate parent company.

Colorlites Limited

The principal activity of Colorlites Limited is that of supply of glass packaging.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

13

Investments (continued)

JFD (Midhurst) Limited

The principal activity of JFD (Midhurst) Limited is that of plastering, painting and landscaping.

Subsidiary audit exemption

For the year ending 31 December 2022 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:

Functional Fitness South East Limited (company registered number 13257817)
THF Homes Limited (company registered number 13137765)
THFS Digital Limited (company registered number 13553184)
THF Glassware Limited (company registered number 13439289)

For the year ending 31 December 2022 the following subsidiaries were entitled to exemption from audit under section 480 of the Companies Act 2006 relating to dormant companies:

Oakleaf Candles Limited (company registered number 04597481)
Contract Candles Limited (company registered number 03077491)
 

14

Business combinations

On 31 May 2022, THF Holdings Ltd acquired 50% of the issued share capital of Colorlites Holdings Limited , obtaining control.

Colorlites Holdings Limited contributed £3,666,093 revenue and £(318,677) to the group's profit for the period between the date of acquisition and the Statement of Financial Position date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

Book value
2022
£

Fair value
2022
£

Assets and liabilities acquired

Financial assets

1,347,112

1,347,112

Stocks

514,475

514,475

Tangible assets

545,328

545,328

Financial liabilities

(2,323,339)

(2,323,339)

Pre-acquisition share of JV profits

(227,418)

(227,418)

Total identifiable assets

(143,842)

(143,842)

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

14

Business combinations (continued)

Book value
2022
£

Fair value
2022
£

Goodwill

1,082,669

1,082,669

Total consideration

938,827

938,827

Satisfied by:

Cash

902,000

902,000

Other

36,877

36,877

Total consideration transferred

938,877

938,877

Cash flow analysis:

Cash consideration

(938,877)

(938,877)

Less: cash and cash equivalent balances acquired

221,169

221,169

Net cash outflow arising on acquisition

(717,708)

(717,708)

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

14

Business combinations (continued)

On 16 November 2022, THF Holdings Ltd acquired 100% of the issued share capital of JFD (Midhurst) Limited (from Mr A Thompson, Director and Shareholder), obtaining control.

JFD (Midhurst) Limited contributed £- revenue and £(17,171) to the group's profit for the period between the date of acquisition and the Statement of Financial Position date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

Book value
2022
£

Fair value
2022
£

Assets and liabilities acquired

Financial assets

425,711

425,711

Tangible assets

394,744

394,744

Financial liabilities

(471,777)

(471,777)

Total identifiable assets

348,678

348,678

Goodwill

663,822

663,822

Total consideration

1,012,500

1,012,500

Satisfied by:

Cash

1,000,000

1,000,000

Other

12,500

12,500

Total consideration transferred

1,012,500

1,012,500

Cash flow analysis:

Cash consideration

(1,012,500)

(1,012,500)

Less: cash and cash equivalent balances acquired

29,488

29,488

Net cash outflow arising on acquisition

(983,012)

(983,012)

The useful life of goodwill is 3 years.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

15

Stocks

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Raw materials and consumables

8,270,664

7,966,684

-

-

16

Debtors

   

Group

Company

Note

2022
£

2021
£

2022
£

2021
£

Trade debtors

 

9,956,315

8,988,078

-

-

Amounts owed by related parties

27

-

265,549

1,134,411

483,717

Other debtors

 

149,199

269,841

64,343

187,165

Prepayments

 

656,985

545,298

30,688

39,320

Accrued income

 

3,533

1,014

-

-

Corporation tax asset

10

78,683

-

122,034

19,507

Directors loan accounts

 

44,673

75,922

39,673

31,386

   

10,889,388

10,145,702

1,391,149

761,095

Less non-current portion

 

(34,526)

(49,464)

-

-

 

10,854,862

10,096,238

1,391,149

761,095

17

Cash and cash equivalents

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Cash on hand

602

1,132

2

2

Cash at bank

216,299

1,077,389

57,216

434,641

216,901

1,078,521

57,218

434,643

Bank overdrafts

(1,281,010)

-

-

-

Cash and cash equivalents in statement of cash flows

(1,064,109)

1,078,521

57,218

434,643

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

18

Creditors

   

Group

Company

Note

2022
£

2021
£

2022
£

2021
£

Due within one year

 

Loans and borrowings

19

11,252,891

8,590,887

713,170

537,960

Trade creditors

 

3,582,670

4,735,669

140,495

38,055

Amounts due to related parties

27

-

140,102

772,292

-

Social security and other taxes

 

2,154,779

1,802,508

93,332

50,194

Other creditors

 

297,046

63,894

160,535

-

Accruals

 

527,374

284,689

46,799

55,215

Corporation tax liability

10

-

21,218

-

-

Directors loan accounts

 

355,543

121,889

465,113

121,889

 

18,170,303

15,760,856

2,391,736

803,313

Due after one year

 

Loans and borrowings

19

3,917,803

3,008,362

2,649,156

2,710,008

19

Loans and borrowings

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Current loans and borrowings

Bank borrowings

786,347

546,530

713,170

537,960

Bank overdrafts

1,281,010

-

-

-

Hire purchase and finance lease liabilities

261,571

137,625

-

-

Other borrowings

8,923,963

7,906,732

-

-

11,252,891

8,590,887

713,170

537,960

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Non-current loans and borrowings

Bank borrowings

2,991,853

2,751,438

2,649,156

2,710,008

Hire purchase and finance lease liabilities

925,950

256,924

-

-

3,917,803

3,008,362

2,649,156

2,710,008

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

19

Loans and borrowings (continued)

Group

Bank borrowings

The HSBC coronavirus business interruption loan is denominated in sterling with a nominal interest rate of 3.99% over the Bank of England base rate, and the final instalment is due on 1 December 2026. The carrying amount at year end is £1,093,333 (2021 - £1,413,333).

HSBC Bounce Back loan is denominated in sterling with a nominal interest rate of 2.5, and the final instalment is due on 14 February 2027. The carrying amount at year end is £41,292 (2021 - £50,000).

The HSBC flexible business loan is denominated in sterling with a nominal interest rate of 2% over the Bank of England base rate, and the final instalment is due on 7 February 2029. The carrying amount at year end is £1,570,834 (2021 - £1,834,635).

HSBC Business loan is denominated in sterling with a nominal interest rate of 4% over the Bank of England base rate, and the final instalment is due on 31 May 2026. The carrying amount at year end is £698,159 (2021 - £Nil).

HSBC Mortgage is denominated in Sterling with a nominal interest rate of 4.9%, and the final instalment is due on 31 December 2042. The carrying amount at year end is £224,965 (2021 - £Nil).

HSBC Bounceback is denominated in Sterling with a nominal interest rate of 2.5%, and the final instalment is due on 31 January 2024. The carrying amount at year end is £41,293 (2021 - £Nil).

HSBC term loan is denominated in Sterling with a nominal interest rate of 2.4%, and the final instalment is due on 31 May 2025. The carrying amount at year end is £85,811 (2021 - £Nil).

HSBC Bounce loan is denominated in Sterling with a nominal interest rate of 2.5%, and the final instalment is due on 31 May 2023. The carrying amount at year end is £22,513 (2021 - £Nil).

The loans are secured on all assets of THF Holdings Ltd via a debenture dated 07/02/2019.

Other borrowings

The invoice financing creditor is denominated in sterling. The carrying amount at year end is £8,923,963 (2021 - £7,906,732).

The invoice financing creditor is secured by a debenture including a fixed charge over all property, a first fixed charge and a first floating charge over all assets dated 13/07/2005.

Liabilities relating to hire purchase and finance lease agreements of £1,187,521 (2021 - £394,549) are secured against the assets to which they relate.

Included in the loans and borrowings are the following amounts due after more than five years:

2022
£

2021
£

After more than five years by instalments

646,115

563,837

646,115

563,837

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

20

Deferred tax and other provisions

Group

Deferred tax
£

Total
£

At 1 January 2022

506,787

506,787

Increase (decrease) in existing provisions

66,434

66,434

Increase (decrease) through business combinations

111,001

111,001

At 31 December 2022

684,222

684,222

21

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable to the scheme and amounted to £230,795 (2021 - £262,237).

Contributions totalling £60,116 (2021 - £38,578) were payable to the scheme at the end of the year and are included in creditors.

22

Share capital

Allotted, called up and fully paid shares

 

2022

2021

 

No.

£

No.

£

Ordinary shares of £0.01 each

30,800

308

30,800

308

         

23

Reserves

Group

Called up share capital

This represents the nominal value of shares that have been issued.

Merger reserve

This reserve records the amount above the nominal value received for shares sold by way of a share-for-share exchange as part of a group re-organisation to make the company the parent of the THF Holdings Ltd group.

Revaluation reserve

This reserve records the value of asset revaluations and fair value movement on assets recognised in other comprehensive income.

Profit and loss account

This reserve records retained earnings and accumulated losses.

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

24

Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

2022
£

2021
£

Not later than one year

261,571

137,625

Later than one year and not later than five years

925,950

256,924

1,187,521

394,549

Operating leases

The total of future minimum lease payments is as follows:

2022
£

2021
£

Not later than one year

864,319

242,965

Later than one year and not later than five years

1,549,843

555,704

Later than five years

315,919

-

2,730,081

798,669

The amount of non-cancellable operating lease payments recognised as an expense during the year was £850,963 (2021 - £235,768).

25

Dividends

   

2022

 

2021

   

£

 

£

Interim dividend of £Nil (2021 - £26) per ordinary share

 

-

 

815,490

         
 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

26

Analysis of changes in net debt

Group

At 1 January 2022
£

Financing cash flows
£

Acquisition of subsidiaries
£

New finance leases
£

At 31 December 2022
£

Cash and cash equivalents

Cash

1,078,521

(861,620)

-

-

216,901

Overdrafts

-

(1,281,010)

-

-

(1,281,010)

1,078,521

(2,142,630)

-

-

(1,064,109)

Borrowings

Long term borrowings

(2,751,438)

(15,450)

(224,965)

-

(2,991,853)

Short term borrowings

(546,530)

152,853

(392,670)

-

(786,347)

Lease liabilities

(394,549)

255,780

-

(1,048,752)

(1,187,521)

Invoice financing

(7,906,732)

(1,017,231)

-

-

(8,923,963)

(11,599,249)

(624,048)

(617,635)

(1,048,752)

(13,889,684)

 

(10,520,728)

(2,766,678)

(617,635)

(1,048,752)

(14,953,793)

27

Related party transactions

Group

During the period the group entered into the following transactions with related parties:

Purchases from entities that provide key management personnel services totalling £66,865 (2021 - £243,775). Balances owed to entities that provide key management personnel services, included in creditors at the period end total £nil (2021 - £1,342).

The group has taken advantage under paragraph 33.1A of FRS 102, of not disclosing transactions with other members of the THF Holdings Ltd group.

Transactions with directors

2022

At 1 January 2022
£

Advances to director
£

Repayments by director
£

Business combination by company
£

At 31 December 2022
£

A Thompson & A L Thompson

(121,889)

444,876

(788,100)

109,570

(355,543)

F L Hamilton-Fox

31,386

13,287

-

-

44,673

 

(90,503)

458,163

(788,100)

109,570

(310,870)

         

 

 

THF Holdings Ltd

Notes to the Financial Statements for the Year Ended 31 December 2022 (continued)

27

Related party transactions (continued)

2021

At 1 January 2021
£

Advances to director
£

Repayments by director
£

At 31 December 2021
£

A Thompson & A L Thompson

81,677

572,021

(775,587)

(121,889)

F L Hamilton-Fox

45,905

26,301

(40,820)

31,386

 

127,582

598,322

(816,407)

(90,503)

       

 

Company

Dividends paid to directors

 

2022
£

2021
£

   

A Thompson

-

541,454

A L Thompson

-

233,216

F L Hamilton-Fox

-

40,820

 

-

815,490

         

 

28

Parent and ultimate parent undertaking

The ultimate controlling party is Mr A Thompson and Mrs A L Thompson.