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Registered number: 13189369









MERCHANT GOURMET HOLDINGS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 APRIL 2023

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
COMPANY INFORMATION


Directors
D A Dunbar 
C F Faulkner 
T H Faulkner 
N H Hastilow 
L Leatham 
M Leatham 
O N Leatham 
C E Waters 




Registered number
13189369



Registered office
Unit 10-12 The Circle
Queen Elizabeth Street

London

SE1 2JE




Independent auditor
CLA Evelyn Partners Limited
Chartered Accountants & Statutory Auditor

45 Gresham Street

London

EC2V 7BG





 
MERCHANT GOURMET HOLDINGS LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 4
Directors' Report
5
Directors' Responsibilities Statement
6
Independent Auditor's Report
7 - 10
Consolidated Statement of Comprehensive Income
11
Consolidated Statement of Financial Position
12
Company Statement of Financial Position
13
Consolidated Statement of Changes in Equity
14
Company Statement of Changes in Equity
15
Consolidated Statement of Cash Flows
16
Consolidated Analysis of Net Debt
17
Notes to the Financial Statements
18 - 33


 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023

Introduction
 
The directors present the Strategic Report for the Group for the year ended 30 April 2023.

Principal activities

Merchant Gourmet Holdings Limited is the non-trading ultimate parent of Merchant Gourmet Limited who is the market leader in the supply of ready to eat grains, pulses and chestnuts into the UK grocery market. We source our products through a network of co-manufacturers with whom we have strong long-term relationships. We exist to inspire more people to eat more plants in a convenient, everyday gourmet way.
Our heritage is in our relentless pursuit of high-quality, convenient food products that we source from across the Globe. We work closely with our supply partners developing new products and overseeing the technical and production processes. This is then delivered through an end to end supply chain that sets the highest standards in integrity and food safety.
Operating out of various third-party distribution centres in the UK, we supply Plant based products principally in the UK, under the Merchant Gourmet brand.
Basis of preparation of financial statements
The Group’s financial statements have been prepared in accordance with Financial Reporting Standard 102 (FRS 102).

Business review
 


Year ended 30 April 2023
£'000
15-month period ended 30 April 2022
£'000
CAGR
Growth on prior period
Turnover
16,091
13,235
5.0%
21.6%
EBITDA
452
225
19.1%
101.8%
Profit before tax
361
193
16.8%
87%
EBITDA %
2.8%
1.5%



On 1 July 2021 we formally demerged from Leathams Group Holdings Ltd when we commenced trading. The results above for 2022 represent the 15-month period from date of incorporation, 9th February 2021.  However, for the first five months of that period the company was dormant, and therefore the results represent only 10 months of actual trade. The results for 2023 represent a full year of trade. 
Whilst we endured another very challenging year of unprecedented market conditions, we grew both revenue and profit year on year. We successfully built on the investments we made last year in both talent acquisition and marketing. Merchant Gourmet has continued to benefit from the enduring trends of people eating less meat in favour of more "veg-forward" diets and also looking to do so in a healthy but convenient way. We expect these trends to continue into the future.
Our continued investment strategy behind marketing has seen us grow both UK household penetration and also our purchase frequency. Our investment in the team has also helped us grow distribution points across the UK grocery retail estate and increase our rate of sale.
 
Page 1

 
MERCHANT GOURMET HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023

EBITDA is defined as Operating profit plus depreciation, amortisation and exceptional items. The results, show Net sales as £16,091,362 (15-month period ended 30 April 2022 - £13,234,573) and EBITDA of £451,874 (15-month period ended 30 April 2022 - £224,507). Despite challenging market conditions these results show growth in sales, gross margin and profit vs last financial year and reflect the continued higher investment in the brand. Raw material product costs were materially higher year on year driven by disrupted supply chains and higher energy prices. We have also had to navigate the broader crisis in consumer confidence and adverse pressure on exchange rates. All of these issues impacted our ability to deliver a true breakthrough in growth and profit.
Despite these headwinds, management have put mitigating actions in place to ensure we are in a strong position to deal with any further inflation or market volatility. We also expect these measures to deliver improved profitability in the next financial year.
In addition, we have made a further investment choice in building a strong innovation pipeline which lays down the foundations for more significant growth in future years. This is a key investment pillar for future business success.
Based on the above, we expect the Group to remain in growth in both revenue and profit delivery for the coming year.

Principal risks and uncertainties
 
The Group gives appropriate consideration to risk management objectives and policies. Over and above the general economic climate, the main risks facing the business are Supplier Performance, Food Safety, Foreign Currency, Credit Risk, Liquidity and Interest Rates.
Supplier Performance
A key component of the Group's activities revolves around its supply base. With a range of products, the Group has actively focused on establishing a diverse supplier portfolio, therefore minimising the risk to the Group in relation to continuity of supply. Dual supplier strategies are in place for core product lines and all suppliers are reviewed formally at least once a year to maximise supply performance. No one supplier represents more than 36.1% (15-month period ended 30 April 2022 - 32.0%) of purchases.
Price Risk
The Group is exposed to raw material price increases and logistics inflation through its inbound freight and outbound distribution activities. Fixed price contracts are negotiated with suppliers where possible to mitigate the impact of food inflation. We also look to offset price increases wherever possible, through alternative sourcing and seasonal bulk purchasing.
Customer Base
The Group operates an omni-channel strategy: selling in to all the major grocery multiples, our own ecommerce shop, pureplay e-commerce, discounters, and wholesale. This minimises the impact from the loss of any one single customer. No single customer representing more than 37.4% (15-month period ended 30 April - 33.2%) of turnover.
 
Page 2

 
MERCHANT GOURMET HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023

Food Safety
As food legislation continues to increase and the demands from our customer base grow in response, our in-house technical team have proven themselves to be an extremely effective resource. The Group operates within the highest industry technical standards and applies these demanding safety standards to its supply base. Our supplier auditing programme and technical competency has enabled the Group to maintain a positive reputation within the industry post demerger.
Foreign Currency
As 69.0% (15-month period ended 30 April 2022 - 69.6%) of our food purchases are bought in foreign currencies, we remain at risk from fluctuations in exchange rates, specifically Euro and US Dollar. At present we aim to hedge this position and the Group holds foreign currency cash reserves as at 30 April 2023, to the equivalent of £1.07m (2022 - £0.66m).
Credit Risk
Credit risk is managed through the adoption of rigorous credit control procedures in addition to external credit insurance. The directors feel this is the most appropriate approach to the current economic climate.
Liquidity Risk and Interest Rates
Committed bank facilities are in place to deal with cash flows, liquidity risk and planned expansion.

Financial key performance indicators
 
The business is constantly reviewing its financial and operational performance in many areas, to aid decision making and improve performance. These areas include Turnover Growth and New Business, Gross Profit, Supplier Performance, Customer Service, Overhead Management, Cash Management, Employee Retention, Environmental Performance and Return on Investment. Our KPI’s are shown below:



Year ended 30 April 2023
£'000
15-month period ended 30 April 2022
£'000
Turnover
16,091
13,235
EBIT
425
214
Net Assets
2,341
2,056
Gross profit
4,139
2,738
Gross profit margin (as a % of Turnover)
25.7%
20.7%
Return on Capital Employed ("ROCE")
18.2%
10.4%

ROCE definition
Earnings before interest and tax (EBIT)/ Net Assets

Page 3

 
MERCHANT GOURMET HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023


This report was approved by the board and signed on its behalf.



D A Dunbar
Director

Date: 23 November 2023

Page 4

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023

The directors present their report and the financial statements for the year ended 30 April 2023.

Results and dividends

The profit for the year after taxation, amounted to £285,093 (15-month period ended 30 April 2022 - £173,757).

No dividends were paid or proposed during the year (15-month period ended 30 April 2022 - £Nil).

Directors

The directors who served during the year were:

D A Dunbar 
C F Faulkner 
T H Faulkner 
N H Hastilow 
L Leatham 
M Leatham 
O N Leatham 
C E Waters 

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

so far as the director is aware, there is no relevant audit information of which the Company and Group's auditor is unaware, and
the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

Events after the end of the reporting period

There have been no significant events affecting the Group since the year end.

Auditor

The auditor, CLA Evelyn Partners Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 




D A Dunbar
Director

Date: 23 November 2023

Page 5

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2023

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:

select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;


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

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

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.

Page 6

 
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERCHANT GOURMET HOLDINGS LIMITED
 

Opinion
We have audited the financial statements of Merchant Gourmet Holdings Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 30 April 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Financial Position, the Consolidated and Parent Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Consolidated Analysis of Net Debt and the 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 FRS 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 30 April 2023 and of the Group's profit for the year then ended;  
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group 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.
Page 7

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERCHANT GOURMET HOLDINGS LIMITED (CONTINUED)

Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard. 


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 the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the 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 the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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 Directors’ Responsibilities Statement set out on page 5, 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 Group's and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. 

Page 8

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERCHANT GOURMET HOLDINGS LIMITED (CONTINUED)

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

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

We obtained a general understanding of the Group’s legal and regulatory framework through enquiry of management in respect of their understanding of the relevant laws and regulations. We obtained an understanding of the entity’s policies and procedures in relation to compliance with relevant laws and regulations. We also drew on our existing understanding of the Group’s industry and regulation.
We understand that the Group complies with requirements of the framework through:
Requiring all employees to read and follow the policies as per the employee handbook and procedures of the business; and
Close oversight by the directors and key management, meaning that any legislation or claims would come to their attention directly.

In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements and which are central to the Group’s ability to conduct its business and where failure to comply could result in material penalties. We have identified the following laws and regulations as being of significance in the context of the Group:
Companies Act 2006, in respect of preparation and presentation of the financial statements; and
FRS 102, in respect of preparation and presentation of the financial statements.

We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations above:
Making enquiries of management and those charged with governance as to the risks of non-compliance and any instance thereof;
Obtained written management representations regarding disclosure of any non-compliance with laws and regulations; and
Review of minutes of meeting of those charged with governance.

The senior statutory auditor led a discussion with all members of the engagement team regarding the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to manipulation of the financial statements through manual journal entries and incorrect recognition of revenue.
The procedures carried out to gain evidence in the above areas included:
Testing journal entries, selected based on specific risk assessments applied based on client processes and controls surrounding manual journals;
Testing the cut-off of revenue, specifically around the statement of financial position date; and
Evaluation of the design effectiveness of management's controls designed to prevent and detect irregularities.
 
Page 9

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERCHANT GOURMET HOLDINGS LIMITED (CONTINUED)

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 Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.



Nicholas Jacques (Senior Statutory Auditor)
  
for and on behalf of
CLA Evelyn Partners Limited
 
Chartered Accountants
Statutory Auditor
  
45 Gresham Street
London
EC2V 7BG

23 November 2023
Page 10

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023

Year ended
30 April
15-month period ended
30 April
2023
2022
Note
£
£

  

Turnover
 4 
16,091,362
13,234,573

Cost of sales
  
(11,952,634)
(10,496,336)

Gross profit
  
4,138,728
2,738,237

Administrative expenses
  
(3,713,550)
(2,524,307)

Operating profit
 5 
425,178
213,930

Interest payable and similar expenses
 9 
(64,571)
(20,499)

Profit before taxation
  
360,607
193,431

Tax on profit
 10 
(75,514)
(19,674)

Profit for the financial year/period
  
285,093
173,757

  

  

There was no other comprehensive income for 2023 (15-month period ended 30 April 2022 - £Nil).

The notes on pages 18 to 33 form part of these financial statements.

Page 11

 
MERCHANT GOURMET HOLDINGS LIMITED
REGISTERED NUMBER:13189369

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 11 
44,070
65,586

Tangible assets
 12 
1,246
-

  
45,316
65,586

Current assets
  

Stocks
 14 
1,615,420
2,506,104

Debtors: amounts falling due within one year
 15 
2,691,211
2,282,193

Cash at bank and in hand
  
1,706,670
1,305,630

  
6,013,301
6,093,927

Creditors: amounts falling due within one year
 17 
(3,717,536)
(4,103,525)

Net current assets
  
 
 
2,295,765
 
 
1,990,402

Net assets
  
2,341,081
2,055,988


Capital and reserves
  

Called up share capital 
 19 
26,889
26,889

Merger reserve
 20 
1,855,342
1,855,342

Profit and loss account
 20 
458,850
173,757

Shareholders' funds
  
2,341,081
2,055,988


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




D A Dunbar
Director

Date: 23 November 2023

The notes on pages 18 to 33 form part of these financial statements.

Page 12

 
MERCHANT GOURMET HOLDINGS LIMITED
REGISTERED NUMBER:13189369

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 13 
26,889
26,889

Debtors: amounts falling due within one year
 15 
487
-

  
487
-

Creditors: amounts falling due within one year
 17 
(487)
-

Net current assets
  
 
 
-
 
 
-

Net assets
  
26,889
26,889


Capital and reserves
  

Called up share capital 
 19 
26,889
26,889

Shareholders' funds
  
26,889
26,889


The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the Company for the year was £Nil (15-month period ended 30 April 2022 - £Nil)
The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


D A Dunbar
Director

Date: 23 November 2023

The notes on pages 18 to 33 form part of these financial statements.

Page 13

 
MERCHANT GOURMET HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023


Called up share capital
Merger reserve
Profit and loss account
Total equity

£
£
£
£


At 9 February 2021
-
-
-
-


Comprehensive income for the period

Profit for the period
-
-
173,757
173,757


Contributions by and distributions to owners

Shares issued during the period
26,889
-
-
26,889

Merger reserve
-
1,855,342
-
1,855,342



At 1 May 2022
26,889
1,855,342
173,757
2,055,988


Comprehensive income for the year

Profit for the year
-
-
285,093
285,093


At 30 April 2023
26,889
1,855,342
458,850
2,341,081


Page 14

 
MERCHANT GOURMET HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023


Called up share capital
Total equity

£
£


At 9 February 2021
-
-

Shares issued during the period
26,889
26,889



At 1 May 2022
26,889
26,889


At 30 April 2023
26,889
26,889


Page 15

 
MERCHANT GOURMET HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
285,093
173,757

Adjustments for:

Amortisation of intangible assets
26,002
10,578

Depreciation of tangible assets
704
-

Interest paid
64,571
20,499

Taxation charge
75,514
19,674

Decrease/(increase) in stocks
890,684
(650,762)

Increase in debtors
(408,445)
(2,279,772)

Increase in creditors
73,046
2,712,910

Corporation tax paid
(21,690)
-

Net cash generated from operating activities

985,479
6,884


Cash flows from investing activities

Purchase of intangible fixed assets
(4,486)
(76,164)

Purchase of tangible fixed assets
(1,950)
-

Net cash used in investing activities

(6,436)
(76,164)

Cash flows from financing activities

Issue of ordinary shares
-
26,889

Interest paid
(64,571)
(20,499)

Net cash (used in)/generated from financing activities
(64,571)
6,390

Net increase/(decrease) in cash and cash equivalents
914,472
(62,890)

Cash and cash equivalents at beginning of year
(62,890)
-

Cash and cash equivalents at the end of year
851,582
(62,890)


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,706,670
1,305,630

Sales finance facility
(855,088)
(1,368,520)

851,582
(62,890)


Page 16

 
MERCHANT GOURMET HOLDINGS LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 APRIL 2023




At 1 May 2022
Cash flows
At 30 April 2023
£

£

£

Cash at bank and in hand

1,305,630

401,040

1,706,670

Sales finance facility

(1,368,520)

513,432

(855,088)


(62,890)
914,472
851,582

Page 17

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

1.


General information

Merchant Gourmet Holdings Limited is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 13189369). The registered office address is Unit 10-12 The Circle, Queen Elizabeth Street, London, SE1 2JE.
The Company was incorporated on 9 February 2021 and the first financial statements covered the 15-month period from incorporation to 30 April 2022. For this reason, amounts in these financial statements may not be fully comparable.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

In preparing the separate financial statements of the Parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
 
Only one reconciliation of the number of shares outstanding at the beginning and end of the year has been presented as the reconciliation for the Group and the Parent Company would be identical; and
No Statement of Cash Flows has been presented for the Parent Company.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 18

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. The Group has net assets of £2,341,081 (2022 - £2,055,988) and net current assets of £2,295,765 (2022 - £1,990,402). The Group has been profitable in the current period. Management expect this to continue for the foreseeable future. 
The directors prepare a forecast covering a period of more than 12 months post the signing of these financial statements, considering various scenarios for revenue and expenditure. Their decisions are based on a prudent and realistic assessment of the economic outlook which allows them to steer the direction of the Company. The Company's operations are expected to maintain a strong cash position, and based on forward projections, they believe that it is appropriate to apply the going concern assumption.
The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future being at least the next 12 months from signing of these financial statements. 

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 19

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.5

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of turnover can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

The directors deem this to be when the goods are delivered to the customer.

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.8

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Computer software
-
3
years straight-line

Page 20

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Fixtures and fittings
-
33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.10

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is 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.

 
2.12

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

Page 21

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.13

Financial instruments

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. 
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the group will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Group’s cash management.
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the bank, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.

Page 22

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.14

Current and deferred taxation

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

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 Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are evaluated at each reporting date and are based on historical experience adjusted for current market conditions and other factors. Management makes estimates and assumptions concerning the future in preparing the financial statements and the actual results will not always reflect the accounting estimates made. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities of the Group are outlined below.
Stock Provision
The Group has stock totalling £1,615,420 (2022 - £2,506,104) at the statement of financial position date. In assessing the magnitude of stock provision required at the year end, the directors have reviewed the products with regard to their current condition, their remaining life, along with recent and expected future sales patterns. The value of the provision as at the year end was £152,604 (2022 -£151,140).

Page 23

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

4.


Turnover

The whole of the turnover is attributable to the Group's principal activity.

All turnover arose within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

Year ended
30 April
15-month period ended
30 April
2023
2022
£
£

Exchange differences
44,309
32,414


6.


Auditor's remuneration

During the year, the Group obtained the following services from the Group's auditor:


Year ended
30 April
15-month period ended
30 April
2023
2022
£
£

Fees payable to the Group's auditor for the audit of the consolidated and parent Company's financial statements

26,314
22,760

Page 24

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
1,569,693
1,249,322
-
-

Social security costs
101,555
73,309
-
-

Cost of defined contribution scheme
22,694
9,498
-
-


The average monthly number of employees, including the directors, during the year was as follows:


      Year ended
       30 April
15-month period ended
        30 April
        2023
        2022
            No.
            No.







Employees
13
11

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £Nil).

8.


Directors' remuneration

Year ended
30 April
15-month period ended
30 April
2023
2022
£
£

Directors' emoluments
-
198,328

-
198,328


Page 25

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

9.


Interest payable and similar expenses

Year ended
30 April
15-month period ended
30 April
2023
2022
£
£


Bank interest payable
47,995
20,499

Related party interest payable
16,576
-

64,571
20,499


10.


Taxation


Year ended
30 April
15-month period ended
30 April
2023
2022
£
£

Corporation tax


Current tax on profits for the year/period
76,005
22,095

Adjustments in respect of previous periods
(405)
-


Total current tax
75,600
22,095

Deferred tax


Origination and reversal of timing differences
(463)
(2,421)

Adjustments in respect of previous periods
377
-

Total deferred tax
(86)
(2,421)


Taxation on profit on ordinary activities
75,514
19,674
Page 26

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year/period

The tax assessed for the year/period is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 19.49% (2022 -19%). The differences are explained below:

Year ended
30 April
15-month period ended
30 April
2023
2022
£
£


Profit on ordinary activities before tax
360,607
193,431


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19.49% (2022 - 19%)
70,293
36,752

Effects of:


Expenses not deductible for tax purposes
506
306

Fixed asset differences
4,845
(16,804)

Adjustments to tax charge in respect of prior periods
(405)
-

Adjustments to tax charge in respect of prior periods - deferred tax
377
-

Remeasurement of deferred tax for changes in tax rates
(102)
(580)

Total tax charge for the year/period
75,514
19,674


Factors that may affect future tax charges

Finance Act 2021 included legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.

Page 27

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

11.


Intangible assets

Group 





Computer software

£



Cost


At 1 May 2022
76,164


Additions
4,486



At 30 April 2023

80,650



Amortisation


At 1 May 2022
10,578


Charge for the year
26,002



At 30 April 2023

36,580



Net book value



At 30 April 2023
44,070



At 30 April 2022
65,586

The Parent Company does not hold any intangible fixed assets.



Page 28

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

12.


Tangible fixed assets

Group






Fixtures and fittings

£



Cost


Additions
1,950



At 30 April 2023

1,950



Depreciation


Charge for the year
704



At 30 April 2023

704



Net book value



At 30 April 2023
1,246



At 30 April 2022
-

The Parent Company does not hold any tangible fixed assets.

Page 29

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost


At 1 May 2022
26,889



At 30 April 2023
26,889





Subsidiary undertaking


The following was a direct subsidiary undertaking of the Parent Company:

Name

Registered office

Class of shares

Holding

Merchant Gourmet Limited
Unit 10-12 The Circle, Queen Elizabeth Street, London, SE1 2JE
Ordinary
100%


14.


Stocks

Group
Group
2023
2022
£
£

Finished goods and goods for resale
1,615,420
2,506,104


The Parent Company did not hold any stock at the year end.

Page 30

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

15.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
2,518,488
1,932,095
-
-

Amounts owed by related parties
-
80,895
-
-

Other debtors
29,703
41,018
487
-

Prepayments and accrued income
140,513
225,764
-
-

Deferred taxation
2,507
2,421
-
-

2,691,211
2,282,193
487
-



16.


Cash and cash equivalents

Group
Group
2023
2022
£
£


Cash at bank and in hand
1,706,670
1,305,630

The Parent Company did not hold any cash or cash equivalents at the year end.


17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Sales finance facility
855,088
1,368,520
-
-

Trade creditors
1,732,093
364,401
-
-

Amounts owed to group undertakings
487
-
487
-

Corporation tax
76,005
22,095
-
-

Other taxation and social security
27,514
26,869
-
-

Other creditors
378,542
1,362,408
-
-

Accruals and deferred income
647,807
959,232
-
-

3,717,536
4,103,525
487
-


The sales finance facility disclosed above has been secured by HSBC via fixed and floating charges over the assets of the Group.
Merchant Gourmet Limited, a wholly owned subsidiary, has a guarantee in favour of HMRC for £60,000.

Page 31

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

18.


Deferred taxation


Group



2023
2022


£

£






At beginning of year
(2,421)
-


Charged to profit or loss
(86)
(2,421)



Deferred tax asset at the end of the year/period
(2,507)
(2,421)

The deferred tax asset is made up as follows:

Group
Group
2023
2022
£
£

Fixed asset timing differences
312
-

Short-term timing differences
(2,819)
(2,421)

(2,507)
(2,421)


Fixed asset timing differences are expected to reverse in line with each corresponding fixed asset class and the classes depreciation rates, as noted in the accounting policies.
Short-term timing differences are expected to reverse over the next 12 months.


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



98,706 A Ordinary shares of £0.25 each
24,677
24,677
8,848 B Ordinary shares of £0.25 each
2,212
2,212

26,889

26,889

The Ordinary A shares carry full voting, dividend and distribution rights.
The Ordinary B shares carry no voting rights, but carry full dividend and distribution rights.


Page 32

 
MERCHANT GOURMET HOLDINGS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

20.


Reserves

Merger Reserve

This reserve relates to the difference between the nominal and fair value of shares acquired on initial recognition of the business combination.

Profit and loss account

This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.


21.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group  in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £43,525 (15-month period ended 30 April 2022 - £16,693). Contributions totalling £6,140 (2022 - £4,290) were payable to the fund at the reporting date and are included in creditors.


22.


Related party transactions

The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
During the year, the Group provided services and stock totalling £276,438 
(15-month period ended 30 April 2022 - £99,426) to Leathams Limited, a company owned by the same shareholders as the Group. During the year, the Group received services and stock totalling £1,278,552 (15-month period ended 30 April 2022 - £2,704,171) from Leathams Limited. Amounts due to Leathams Limited at the year end were £14,450 (2022, amounts due from Leathams Limited - £71,377). Amounts owed are interest free and repayable on demand.
During the year, the Group was loaned £1,900,000 
(15-month period ended 30 April 2022 - £Nil) by Leathams Limited. Interest is charged on this loan at the Bank of England base rate plus 2.0%. This amount was repaid in full prior to the year end.
During the year, those considered to be key management personnel received compensation of £230,825 (
2022 - £Nil).


23.


Controlling party

The directors do not consider there to be an ultimate controlling party.

Page 33