Hatch Brothers Limited |
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Strategic Report |
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Year ended 31 August 2023 |
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Introduction |
The director presents his strategic report of the company for the year ended 31 August 2023. |
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Principal Activities |
The principal activity of the company was the manufacture and distribution of products within the bakery industry. |
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Business Review |
Hatch Brothers Limited ("the Company") trades as "Genesis Bakery" in the United Kingdom and Republic of Ireland. The Company supplies a range of "Genesis" branded and retailer branded products including Irish breads, tarts, cupcakes and seasonal items such as mince pies. Net sales were £22.9m, an increase of £1.3m/6% on the prior year. Gross profit was £5.4m, an increase of £0.6m/12% on the prior year. The operating profit was £0.97m (prior year £0.4m) after charging depreciation of owned and leased assets of £0.7m (prior year £0.7m). In addition, the company has seen an increasingly strong performance at EBITDA level since the acquisition of the business from Administration in August 2018. The business held cash at year end of £0.3m (prior year £0.7m) and bank loans continue to be repaid in line with agreed terms. The debt associated with the original acquisition of the business was repaid in full in the second half of 2023. The business paid total wages, salaries and benefits to employees of £7.8m across an average 259 employees, (full and part time), with an average workforce of circa 171 full-time equivalents. The business also employs additional personnel for short periods of time, through a number of employment agencies. The director has loaned £0.096m to the Company. The Company insures all debtor balances. |
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The Company continues to focus on the core business of bakery manufacture and distribution and seeks to work in partnership with all stakeholders to maximise operating efficiencies and promote innovation. During the year under review, the business launched a number of truly innovative products, at foot of significant research and development. Some of these products, retailed under customers’ own brands, have won awards and have gone on to sell in stores worldwide. |
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The business is profitable, cash generative and continues to invest for the long-term growth of the company. The majority of investment has been in training, equipment and fleet. The fleet has increased with the purchase of several new vehicles, including some which are electric. New pieces of machinery have increased productivity and reduced the need for several repetitive tasks, which has brought benefits by cutting required hours, which is essential in what is currently a very challenging labour market. |
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Principal risks and uncertainties |
The Company's strategy is to follow an appropriate risk policy which effectively manages identified exposures related to the achievement of business objectives. The Company uses financial instruments within the business. The core risks associated with these include currency risk, interest rate risk, credit risk and liquidity risk. The director reviews and agrees policies for the prudent management of these risks as follows: Currency risk - the Company's main activities are conducted in the UK. A proportion of sales are in the Republic of Ireland and these are invoiced in Euro. This results in low levels of currency transaction risk which the Company seeks to match against any Euro denominated purchases when possible. Any subsequent costs are reflected in the profit and loss account as they arise. Finance & Interest Rate risk - the Company's loans are all interest-bearing at rates linked to the Bank of England base rate. Interest is paid as it falls due. The objective set is to minimise the impact of interest-rate volatility. |
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Liquidity & Cashflow risk - the Company's objective is to maintain a balance between the continuity of funding and flexibility through the use of borrowings with a range of maturities. The Company's policy is to ensure that sufficient resources are available from cash balances, cashflows and near-cash, liquid investments to ensure obligations can be met when they fall due. Credit risk - the Company extends credit facilities to customers. Customers are subject to strict verification procedures in advance of credit being awarded and are continually monitored. The Company utilises credit insurance to mitigate any potential loss. |
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Customer risk - the Company tries to ensure that it has a wide base of customers to ensure that there is no concentration of sales. Contract renewal is spread and product type is varied. The company has actively sought out new customers and contracts through the year and has been successful in widening both the customer and product bases, while also making better, more efficient use of both plant and equipment as a result. |
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Brexit risk - the Company both imports and exports to Great Britain, the Republic of Ireland and, to a limited extent, the wider European Union. The director continues to monitor the situation closely with regard to raw material supply and product sales now that Great Britain has left the EU Customs area while Northern Ireland has remained within the EU Customs area under the Northern Ireland protocol. New supply chain management protocols have been developed and the company now retains more raw materials and work in progress both on site and in frozen storage in order to avoid shorting customer orders. The company continues to invest in resources to monitor movements in commodity prices, particularly where they impact key ingredients such as butter and flour, both of which have been affected by recent events in Ukraine. This has led to changes in procurement in order to maintain security of supply for production and therefore for customers. Where possible, long-term contracts are agreed for raw materials in order to provide stability and security. |
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Climate risk - the Company, being in the manufacturing industry, faces increasing challenges associated with environmental and social externalities attributed to product manufacturing and the transport of materials and goods. The Company is continually assessing the climate related risks and the risks identified are integrated into our existing risk management processes to proactively manage the risks. |
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Development and performance |
The director believes that the performance of the Company will continue to improve as a result of ongoing research and development, improved manufacturing and operational efficiency, investment in processes and people and focus on sku and customer profitability. A company-wide training programme has been created for all levels, enhancing both hard and soft skills and developing supervisory, junior and middle management. The director believes that recent economic challenges due to Covid-19 will present a number of potential acquisition and expansion opportunities. The Company also expects to streamline the current range of products to create opportunities for growth and new product development, as innovation has been key to winning new significant, sustainable contracts. |
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Going concern |
The bakery market remains a challenging environment for a variety of reasons. Whilst there is the continued risk of "normal" business volatility, there are also the added issues associated with the pandemic of Covid-19, unrest in Eastern Europe and the ensuing changes in both suppliers’ and consumers' behaviours. The costs of raw ingredients, energy and labour have seen unprecedented volatility which continues to present challenges and has resulted in price increases having to be presented to, and agreed with, customers. There appears to be no indication of this volatility abating and so the company is constantly monitoring all suppliers and regulating prices to customers accordingly, as needed. The director believes that while this more dynamic environment is likely to continue, he is confident that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, he continues to adopt the going concern basis of accounting in preparing the annual financial statements. |
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This report was approved by the board of directors on 26 January 2024 and signed on behalf of the board by: |
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Mr P M Allen |
Director |
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Registered office: |
Genesis Bakery |
31 Aughrim Road |
Magherafelt |
Northern Ireland |
BT45 6BB |
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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 director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
We have nothing to report in this regard. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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● |
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the strategic report and the director's report have been prepared in accordance with applicable legal requirements. |
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Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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. |
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Responsibilities of directors |
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
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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. |
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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: |
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Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
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- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with the director and other management, and from our commercial knowledge and experience of the food manufacturing sector; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
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We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
Hatch Brothers Limited |
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Notes to the Accounts |
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Year ended 31 August 2023 |
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1 |
General information |
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The company is a private company limited by shares, registered in Northern Ireland. The address of the registered office is Gensis Bakery, 31 Aughrim Road, Magherafelt, Northern Ireland, BT45 6BB. |
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Statement of compliance |
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These financial statements have been prepared in compliance with FRS 102, "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. |
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2 |
Summary of significant accounting policies |
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Basis of preparation |
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The financial statements have been prepared under the historical cost basis , as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through the profit and loss. |
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The finanical statements are prepared in sterling, which is the functional currency of the entity. |
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In accordance with the company's accounting policy of preparing accounts to a Sunday within 7 days of the accounting reference date (31 August), these financial statements cover the period from 5 September 2022 to 3 September 2023. The prior year's financial statements covered the period from 6 September 2021 to 4 September 2022. |
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Going concern |
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The food manufacturing sector remains a challenging environment due to the rising costs of raw materials and energy. However, the director is confident that the Company has adequate resources to continue in operational existence for at least 12 months from the date of this report. Thus, he continues to adopt the going concern basis of accounting in preparing the annual financial statements. |
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Judgements and key sources of estimation uncertainty |
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that reflect 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. |
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In preparing these financial statements, the directors have made the following judgements: |
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- Determine whether leases entered into the by company either as a lessor or lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis. |
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- Determine whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset. |
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Revenue recognition |
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Turnover is measured at the fair value of the consideration received or receivable for goods supplied or services rendered, net of discounts and Value Added Tax. |
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Revenue from the sale of goods is recognised when the significant risks and rewards of ownership 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. |
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Intangible fixed assets |
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Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses. |
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Goodwill |
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5 years straight line |
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Brand |
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Between 1 year and 5 years straight line |
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There is no amortisation charged in the year of acquistion. |
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If the net fair value of the identifiable assets and liabilities acquired exceeds the cost of a business combination, the excess up to the fair value of non-monetary assets acquired is recognised in the profit or loss in the periods in which the non-monetary assets are recovered. Any excess exceeding the fair value of non-monetary assets acquired is recognised in profit or loss in the periods expected to be benefitted. |
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Negative goodwill |
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Negative goodwill is deferred and recognised on the face of the statement of financial position immediately below any positive goodwill. |
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Tangible assets |
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Fixtures and fittings |
5 years straight line |
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No depreciation is charged in the year of acquisition. |
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Impairment of fixed assets |
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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. |
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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. |
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Trade and other debtors |
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Trade and other debtors that are receivable within one year and do not constitute a financing transaction are recorded at the undiscounted amount expected to be received, net of impairment. Those that are receivable after more than one year or that constitute a financing transaction are recorded initially at fair value less transaction costs and subsequently at amortised cost, net of impairment. |
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Cash and cash equivalents |
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Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other short-term high liquidity investments with original maturities of three months or less and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings or current liabilities. |
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Trade and other creditors |
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Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of the discounting would be immaterial, in which case they are stated at cost. |
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Interest bearing borrowings |
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Interest bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost with any difference between the amount initially recognised and the redemption value being recognised in the statement of comprehensive income over the period of the borrowings, together with any interest and fees payable, using the effective interest method. |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Costs, which comprise direct production costs and an appropriate allocation of production overheads, are based on the method most appropriate to the type of inventory class, but usually on a first-in-first-out basis. Net realisable value is based on the estimated selling price less any estimated completion or selling costs. |
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Income tax |
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The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. |
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Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. |
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Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that 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 that are expected to apply to the reversal of the timing difference. |
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Provisions |
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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. |
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Provisions are initially measured at the best estimate of the amount requires to settle the obligation at the 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 the 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 the profit or loss in the period it arises. |
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Financial instruments |
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A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. |
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Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. |
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3 |
Analysis of turnover |
2023 |
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2022 |
£ |
£ |
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Sale of goods |
22,786,458 |
|
21,492,373 |
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Commissions |
81,459 |
|
84,327 |
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|
|
|
|
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|
|
|
|
|
|
|
|
22,867,917 |
|
21,576,700 |
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|
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|
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By geographical market: |
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UK |
22,621,709 |
|
21,309,733 |
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Europe |
246,208 |
|
266,967 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,867,917 |
|
21,576,700 |
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4 |
Operating profit |
2023 |
|
2022 |
£ |
£ |
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This is stated after charging: |
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Depreciation of owned fixed assets |
537,109 |
|
341,547 |
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Depreciation of assets held under finance leases and hire purchase contracts |
|
126,398 |
|
345,303 |
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Goodwill amortisation/recovery |
(446,381) |
|
(412,917) |
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Brand amortisation |
42,883 |
|
40,714 |
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Auditors' remuneration for audit services |
10,000 |
|
10,000 |
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Auditors' remuneration for other services |
4,600 |
|
3,600 |
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Job Retention Scheme |
- |
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(3,396) |
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|
|
|
|
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5 |
Director's emoluments |
2023 |
|
2022 |
£ |
£ |
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Emoluments |
300,000 |
|
250,000 |
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Highest paid director: |
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Emoluments |
300,000 |
|
250,000 |
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Company contributions to defined contribution pension plans |
10,000 |
|
8,333 |
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|
|
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|
|
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|
|
|
310,000 |
|
258,333 |
|
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|
|
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|
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Number of directors to whom retirement benefits accrued: |
2023 |
|
2022 |
Number |
Number |
|
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Defined contribution plans |
1 |
|
1 |
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|
|
|
|
|
|
|
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6 |
Staff costs |
2023 |
|
2022 |
£ |
£ |
|
|
Wages and salaries |
6,977,612 |
|
6,645,597 |
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Temporary staff costs |
104,569 |
|
112,494 |
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Social security costs |
583,574 |
|
565,550 |
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Other pension costs |
157,626 |
|
126,850 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,823,381 |
|
7,450,491 |
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|
|
|
|
|
|
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Average number of employees during the year |
2023 |
|
2022 |
Number |
Number |
|
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Administration |
12 |
|
12 |
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Development |
3 |
|
8 |
|
Distribution |
29 |
|
23 |
|
Manufacturing/manufacturing support |
178 |
|
216 |
|
Technical |
11 |
|
11 |
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Sales |
26 |
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
259 |
|
298 |
|
|
|
|
|
|
|
|
|
|
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Full time equivalent average number of employees |
171 |
|
244 |
|
|
|
|
|
|
|
|
|
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7 |
Interest payable |
2023 |
|
2022 |
£ |
£ |
|
|
Bank loans and overdrafts |
147,032 |
|
97,112 |
|
Other loans |
33,545 |
|
64,979 |
|
Finance charges payable under finance leases and hire purchase contracts |
|
75,038 |
|
32,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
255,615 |
|
194,665 |
|
|
|
|
|
|
|
|
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8 |
Taxation |
2023 |
|
2022 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
(50,000) |
|
(149,347) |
|
Adjustments in respect of previous periods |
(10,617) |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(60,617) |
|
(149,347) |
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|
Deferred tax: |
|
Origination and reversal of timing differences |
107,246 |
|
18,529 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit/(loss) on ordinary activities |
46,629 |
|
(130,818) |
|
|
|
|
|
|
|
|
|
|
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
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|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
Profit on ordinary activities before tax |
864,671 |
|
238,740 |
|
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
164,287 |
|
45,361 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
4,980 |
|
2,329 |
|
Capital allowances for period in excess of depreciation |
(105,984) |
|
8,805 |
|
Utilisation of tax losses |
1,837 |
|
46,349 |
|
Adjustments to tax charge in respect of previous periods |
(10,617) |
|
- |
|
Profit on sale of fixed assets |
(31,473) |
|
(4,603) |
|
Amortisation charge |
(83,647) |
|
(76,665) |
|
Enhanced R&D expenditure |
- |
|
(170,923) |
|
|
|
|
|
|
|
|
|
|
|
Current tax charge for period |
(60,617) |
|
(149,347) |
|
|
|
|
|
|
|
|
|
|
9 |
Intangible fixed assets |
Brand |
Goodwill |
|
Total |
£ |
£ |
£ |
|
|
Cost |
|
At 1 September 2022 |
242,219 |
|
(3,004,217) |
|
(2,761,998) |
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2023 |
242,219 |
|
(3,004,217) |
|
(2,761,998) |
|
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 1 September 2022 |
223,463 |
|
(2,557,835) |
|
(2,334,372) |
|
Provided during the year |
18,756 |
|
(446,382) |
|
(427,626) |
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2023 |
242,219 |
|
(3,004,217) |
|
(2,761,998) |
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
At 31 August 2023 |
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2022 |
18,756 |
|
(446,382) |
|
(427,626) |
|
|
|
|
|
|
|
|
|
|
|
Goodwill has been written off in equal annual instalments over its estimated economic life of 5 years. |
|
10 |
Tangible fixed assets |
|
|
Leasehold improvements |
|
Plant and machinery etc |
|
Motor vehicles |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
£ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 September 2022 |
502,668 |
|
4,575,955 |
|
859,416 |
|
5,938,039 |
|
Additions |
14,382 |
|
191,257 |
|
1,266,996 |
|
1,472,635 |
|
Disposals |
- |
|
(556) |
|
(587,750) |
|
(588,306) |
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2023 |
517,050 |
|
4,766,656 |
|
1,538,662 |
|
6,822,368 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 September 2022 |
96,982 |
|
2,311,548 |
|
493,327 |
|
2,901,857 |
|
Charge for the year |
22,878 |
|
508,904 |
|
131,725 |
|
663,507 |
|
On disposals |
- |
|
(556) |
|
(248,411) |
|
(248,967) |
|
|
|
|
|
|
|
|
|
|
|
At 31 August 2023 |
119,860 |
|
2,819,896 |
|
376,641 |
|
3,316,397 |
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
|
At 31 August 2023 |
397,190 |
|
1,946,760 |
|
1,162,021 |
|
3,505,971 |
|
|
At 31 August 2022 |
405,686 |
|
2,264,407 |
|
366,089 |
|
3,036,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
|
Carrying value of plant, machinery and motor vehicles included above held under finance leases and hire purchase contracts |
|
1,232,430 |
|
1,502,487 |
|
|
|
|
|
|
|
|
|
|
11 |
Stocks |
2023 |
|
2022 |
£ |
£ |
|
|
Raw materials and consumables |
1,112,558 |
|
1,211,271 |
|
Work in progress |
169,288 |
|
74,159 |
|
Finished goods and goods for resale |
159,411 |
|
247,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,441,257 |
|
1,532,524 |
|
|
|
|
|
|
|
|
|
|
12 |
Debtors |
2023 |
|
2022 |
£ |
£ |
|
|
Trade debtors |
1,432,531 |
|
1,954,614 |
|
Corporation tax |
|
|
|
|
50,000 |
|
149,347 |
|
VAT |
|
|
|
|
106,792 |
|
164,689 |
|
Other debtors |
355,725 |
|
191,617 |
|
Prepayments and accrued income |
166,431 |
|
179,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,111,479 |
|
2,639,818 |
|
|
|
|
|
|
|
|
|
|
13 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
£ |
£ |
|
|
Bank overdrafts |
1,403,154 |
|
1,658,047 |
|
Bank loans |
9,965 |
|
9,722 |
|
Obligations under finance lease and hire purchase contracts |
239,924 |
|
354,636 |
|
Trade creditors |
1,721,524 |
|
2,245,114 |
|
PAYE |
158,315 |
|
255,969 |
|
Other creditors |
290,474 |
|
218,006 |
|
Accruals and deferred income |
159,731 |
|
269,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,983,087 |
|
5,010,572 |
|
|
|
|
|
|
|
|
|
|
|
Mr P M Allen (a director of the company) holds a mortgage charge over the present leasehold property and a fixed charge over the future freehold/leasehold property; rents; rights attaching to the real property; fixtures and fittings; plant and machinery etc; furniture etc; licences etc; goodwill/uncalled capital; choses in action/claims/intellectual property; debts; credit balances; negotiable instruments; and insurances of the company. He also holds a floating charge over all the property or undertaking of the company. |
|
|
Upstream Working Capital Limited hold a fixed charge and a floating charge over the company. The fixed charge is over the company's non-vesting debts; other debts and any claim made by or on behalf of the company under the Criminal Damages (Compensation) (Northern Ireland) Order 1977. The floating charge covers all the property or undertaking of the company. |
|
|
Allen Family SSAS hold a fixed and a floating charge over all the property or undertaking of the company. |
|
|
The following charge was registered as being satisfied at Companies House on 1 December 2022: |
|
Upstream Trade Finance Limited held a fixed and floating charge over the assets of the company. This was a security assignment and floating charge in respect of the supply and production of a seasonal product for a customer between October and December 2019. |
|
14 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
£ |
£ |
|
|
Bank loans |
18,339 |
|
28,403 |
|
Obligations under finance lease and hire purchase contracts |
653,587 |
|
315,865 |
|
Other creditors |
95,620 |
|
443,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
767,546 |
|
788,069 |
|
|
|
|
|
|
|
|
|
|
15 |
Loans |
2023 |
|
2022 |
£ |
£ |
|
Analysis of maturity of debt: |
|
Within one year or on demand |
1,413,119 |
|
1,667,769 |
|
Between one and two years |
9,965 |
|
9,722 |
|
Between two and five years |
8,374 |
|
18,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,431,458 |
|
1,696,173 |
|
|
|
|
|
|
|
|
|
|
16 |
Obligations under finance leases and hire purchase |
2023 |
|
2022 |
|
contracts |
£ |
£ |
|
|
Amounts payable: |
|
Within one year |
239,924 |
|
354,636 |
|
Within two to five years |
653,587 |
|
315,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
893,511 |
|
670,501 |
|
|
|
|
|
|
|
|
|
|
17 |
Deferred taxation |
2023 |
|
2022 |
£ |
£ |
|
|
Accelerated capital allowances |
501,313 |
|
394,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
|
At 1 September |
394,067 |
|
375,538 |
|
Charged to the profit and loss account |
107,246 |
|
18,529 |
|
|
|
|
|
|
|
|
|
|
|
At 31 August |
501,313 |
|
394,067 |
|
|
|
18 |
Share capital |
Nominal |
|
2023 |
|
2023 |
|
2022 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
|
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
19 |
Profit and loss account |
2023 |
|
2022 |
£ |
£ |
|
|
At 1 September |
1,301,151 |
|
931,593 |
|
Profit for the financial year |
818,042 |
|
369,558 |
|
|
|
|
|
|
|
|
|
|
|
At 31 August |
2,119,193 |
|
1,301,151 |
|
|
|
|
|
|
|
|
|
|
20 |
Reconciliation of net debt |
|
|
1 September 2022 |
Cash flows |
|
Non-cash changes |
|
31 August 2023 |
£ |
£ |
£ |
£ |
|
|
Cash and cash equivalents |
712,963 |
|
(400,529) |
|
- |
|
312,434 |
|
Bank overdrafts |
(1,658,047) |
|
254,893 |
|
- |
|
(1,403,154) |
|
|
|
|
|
|
|
|
|
|
|
|
(945,084) |
|
(145,636) |
|
- |
|
(1,090,720) |
|
|
Borrowings: |
|
Bank loans |
(38,125) |
|
9,821 |
|
- |
|
(28,304) |
|
Finance lease/HP |
(670,501) |
|
(223,011) |
|
|
|
(893,512) |
|
Other loans |
(443,801) |
|
348,181 |
|
- |
|
(95,620) |
|
|
|
|
|
|
|
|
|
|
|
|
(1,152,427) |
|
134,991 |
|
- |
|
(1,017,436) |
|
|
|
|
|
|
|
|
|
|
|
Net debt |
(2,097,511) |
|
(10,645) |
|
- |
|
(2,108,156) |
|
21 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
62,407 |
|
62,407 |
|
28,608 |
|
41,800 |
|
within two to five years |
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
62,407 |
|
62,407 |
|
28,608 |
|
41,800 |
|
|
|
|
|
|
|
|
|
|
|
22 |
Loans to/(from) directors |
|
Description and conditions |
B/fwd |
Paid |
Repaid |
C/fwd |
£ |
£ |
£ |
£ |
|
Mr P M Allen |
|
8% interest |
(443,801) |
|
(271,816) |
|
619,997 |
|
(95,620) |
|
|
|
|
|
|
|
|
|
|
|
|
(443,801) |
|
(271,816) |
|
619,997 |
|
(95,620) |
|
|
|
|
|
|
|
|
|
|
|
23 |
Guarantees |
|
|
The Department of Business Energy Industrial Strategy has given guarantees in respect of the CBILS loan. The balance of this loan at the balance sheet date was £28,304 (2022:£38,125). |
|
24 |
Related party transactions |
|
|
Pastaking (UK) Limited |
|
|
Mr P M Allen is deemed to be the ultimate controlling party of Pastaking (UK) Limited. During the year the company made payments on behalf of Pastaking (UK) Limited. At the balance sheet date an amount of £221,101 (2022: £129,220) due from Pastaking (UK) Limited was included in other debtors. |
|
25 |
Controlling party |
|
|
Mr P M Allen and Mrs N A Allen each hold 50% of the share capital of the company. Mr P M Allen is also the sole director of the company. Mr P M Allen is deemed to be the controlling party of the company. |
|
26 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
27 |
Legal form of entity and country of incorporation |
|
|
Hatch Brothers Limited is a private company limited by shares and incorporated in Northern Ireland. |
|
28 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
|
Genesis Bakery |
|
31 Aughrim Road |
|
Magherafelt |
|
Northern Ireland |
|
BT45 6BB |