Company registration number 02193204 (England and Wales)
HAYWOOD AND PADGETT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
HAYWOOD AND PADGETT LIMITED
COMPANY INFORMATION
Directors
N A Norton
(Appointed 9 August 2023)
C E Padgett
(Appointed 9 August 2023)
L A J Padgett
(Appointed 9 August 2023)
W Padgett
R M Padgett-Arimtage
Secretary
W Padgett
Company number
02193204
Registered office
The Bakery
Shawfield Road
Carlton Industrial Estate
Barnsley
S71 3HS
Auditor
Hart Shaw LLP
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
HAYWOOD AND PADGETT LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 24
HAYWOOD AND PADGETT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The directors present the strategic report for the year ended 31 October 2023.

Review of the business

The accounting results for the year are set out in the attached statements.

The results this year were extraordinary compared to recent years and especially in relation to the previous year. We believe this year was a result of the internal improvements we made following 2022 and delayed price increases that we received due to commodities rising in the previous accounting period.

Following the previous accounting period we closely examined all areas of the business to identify any areas we could change, improve or cut back. Some of the results included changes to some working patterns and staffing, pushing back expenditure where possible and empowering department heads to implement cost savings across their departments in all areas of the business.

Trading in the early part of 2023 was still very difficult with sales volumes a little lower in the festive period and lead up to it and negotiations over price increases still taking place.

As the year progressed the impact of internal improvements, price increases and an increase in sales volume slowly all came through and the results started to improve. We also benefitted from some very big one-off orders from a number of customers both overseas and in the UK. Finally, very late in the year we started to see some relief from packing costs and some ingredient costs which all flowed through to the bottom line.

An exciting development this accounting period was the full acquisition of Nibnibs, previously a 75% subsidiary. This is a part of our plan for future growth so we acquired their trade and assets with a view to offering their existing customers a new range of products and expanding their market share. We have invested significant time and resource into finding the right mix of products to take to market and rebranding the business to take it forward.

Principal risks and uncertainties

The main uncertainties in the business are relatively unchanged. The nature of our business is that we don’t have visibility over the long term prices of commodities and as such, they remain a long term uncertainty.

Key performance indicators

When reviewing the 2022 results we wanted to focus on increasing revenue and improving the gross profit margin. We moved into new markets and worked with customers to provide the products they wanted. As a result, sales volumes are up significantly from 2022 and the resulting turnover has increased by over 20% to over £43m.

We spent a lot of time focusing on process improvements in the bakery to ensure we were streamlined with the result being an improvement in the gross profit margin by 13%.

This focus on improving the gross margin enabled us to absorb the 24% increase in overheads from £2.9m to £3.6m. We saw a continued rise in energy costs which increased by over 128% from the previous year. We also took the opportunity to strengthen our teams and increase wages to enable our staff to combat some of the cost of living increases seen across society.

On behalf of the board

W Padgett
Director
18 July 2024
HAYWOOD AND PADGETT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

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

Principal activities

The principal activity of the company continued to be the production of wholesale bakery products.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £517,195. The directors do not recommend payment of a final dividend.

Directors

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

N A Norton
(Appointed 9 August 2023)
C E Padgett
(Appointed 9 August 2023)
L A J Padgett
(Appointed 9 August 2023)
W Padgett
R M Padgett-Arimtage
Auditor

The auditor, Hart Shaw LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

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

 

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

 

 

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

HAYWOOD AND PADGETT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
Statement of disclosure to auditor

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

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
W Padgett
Director
18 July 2024
HAYWOOD AND PADGETT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAYWOOD AND PADGETT LIMITED
- 4 -
Opinion

We have audited the financial statements of Haywood and Padgett Limited (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

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

 

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 our audit:

HAYWOOD AND PADGETT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAYWOOD AND PADGETT LIMITED
- 5 -
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 directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

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:

At the planning stage we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management, as required by auditing standards. The potential effect of any laws and regulation on the financial statements can vary considerably. There are laws and regulations that directly affect the financial statements (e.g. the Companies Act) as well as many other operational laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. Owing to the size, nature and complexity of the organisation and the applicable laws and regulations to which it must adhere, the risk of material misstatement was deemed to be low, therefore the procedures performed by the audit team were limited to:

 

HAYWOOD AND PADGETT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAYWOOD AND PADGETT LIMITED
- 6 -

We have assessed the overall susceptibility of the financial statements to material misstatement due to fraud. Management override is the most likely way in which fraud might present itself and as such is inherently high risk on any audit. Management override, which may cause there to be a material misstatement within the financial statements, may present itself in a number of ways, for example:

In order to reduce the risk of material misstatement to an acceptable level, numerous audit procedures were performed, including:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected material misstatements in the financial statements, even though we have performed our audit in accordance with auditing standards. Furthermore, as with all audits, there is a higher risk of irregularities (especially those relating to fraud) being undetected, as these may involve the override of internal controls, collusion, intentional omissions and misrepresentations etc. We are not responsible for preventing non-compliance or fraud and therefore cannot be expected to detect all instances of such. Our audit was not designed to identify misstatements or other irregularities that would not be considered to be material to the financial statements. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Adam Shield
Senior Statutory Auditor
For and on behalf of Hart Shaw LLP
31 July 2024
Chartered Accountants
Statutory Auditor
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
HAYWOOD AND PADGETT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
2023
2022
as restated
Notes
£
£
Turnover
3
43,040,969
35,620,801
Cost of sales
(31,647,898)
(30,927,448)
Gross profit
11,393,071
4,693,353
Administrative expenses
(3,560,929)
(2,983,774)
Other operating income
702,610
36,332
Exceptional item
4
(754,101)
-
0
Operating profit
5
7,780,651
1,745,911
Interest receivable and similar income
8
188,031
40,204
Interest payable and similar expenses
9
(16,996)
(16,176)
Amounts written off investments
10
(85,357)
-
Profit before taxation
7,866,329
1,769,939
Tax on profit
11
(2,133,202)
(147,123)
Profit for the financial year
5,733,127
1,622,816

The profit and loss account has been prepared on the basis that all operations are continuing operations.

HAYWOOD AND PADGETT LIMITED
BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
13
5,000
-
0
Tangible assets
14
12,716,411
13,293,089
Investment property
15
829,710
829,710
Investments
16
-
0
85,357
13,551,121
14,208,156
Current assets
Stocks
17
1,648,421
2,161,132
Debtors
18
12,506,478
7,529,763
Cash at bank and in hand
7,104,368
4,882,189
21,259,267
14,573,084
Creditors: amounts falling due within one year
19
(4,422,301)
(3,563,721)
Net current assets
16,836,966
11,009,363
Total assets less current liabilities
30,388,087
25,217,519
Creditors: amounts falling due after more than one year
20
(434,543)
(598,347)
Provisions for liabilities
Deferred tax liability
22
384,700
266,260
(384,700)
(266,260)
Net assets
29,568,844
24,352,912
Capital and reserves
Called up share capital
25
25,000
25,000
Revaluation reserve
364,291
370,286
Capital redemption reserve
25,000
25,000
Profit and loss reserves
29,154,553
23,932,626
Total equity
29,568,844
24,352,912

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 18 July 2024 and are signed on its behalf by:
W Padgett
Director
Company registration number 02193204 (England and Wales)
HAYWOOD AND PADGETT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 November 2021
25,000
376,281
25,000
23,383,757
23,810,038
Year ended 31 October 2022:
Profit and total comprehensive income
-
-
-
1,622,816
1,622,816
Dividends
12
-
-
-
(1,079,942)
(1,079,942)
Transfers
-
(5,995)
-
5,995
-
Balance at 31 October 2022
25,000
370,286
25,000
23,932,626
24,352,912
Year ended 31 October 2023:
Profit and total comprehensive income
-
-
-
5,733,127
5,733,127
Dividends
12
-
-
-
(517,195)
(517,195)
Transfers
-
(5,995)
-
5,995
-
Balance at 31 October 2023
25,000
364,291
25,000
29,154,553
29,568,844
HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
1
Accounting policies
Company information

Haywood and Padgett Limited is a private company, limited by shares and incorporated in England and Wales. The registered office is The Bakery, Shawfield Road, Carlton Industrial Estate, Barnsley, S71 3HS.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

The financial statements for the previous reporting period were consolidated accounts as prior to 28 February 2023 this company was the ultimate parent company for the group.

 

The financial statements of the company are consolidated in the financial statements of Haywood and Padgett Holdings Limited. These consolidated financial statements are available from its registered office, The Bakery, Shawfield Road, Carlton Industrial Estate, Barnsley, S71 3HS.

1.2
Prior period error

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. A presentational adjustment was made between cost of sales and administrative expenses, with amounts reported in the 2022 financial statements being £29,136,709 and £4,774,513 respectively.

1.3
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Trademarks
5 years straight line
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
50 years straight line
Plant and equipment
7 - 10 years straight line
Motor vehicles
6 years straight line

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

 

Freehold land and buildings are held at deemed cost on transition to FRS102.

1.7
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.8
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 12 -

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

1.9
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks are written off as and when they pass their expiration date.

 

Stock cost is calculated on a FIFO basis.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.18
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

2
Judgements and key sources of estimation uncertainty

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

 

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

The directors are of the opinion that there are no key estimates or judgements which have a significant risk of causing a material misstatement.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
42,223,225
34,995,390
Outside of the United Kingdom
817,744
625,411
43,040,969
35,620,801
HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
3
Turnover and other revenue
(Continued)
- 15 -
2023
2022
£
£
Other revenue
Interest income
188,031
40,204
Grants received
2,697
-
Management charge
680,975
-
Other operating income
21,635
36,332
4
Exceptional item
2023
2022
£
£
Expenditure
Bad debt provision for loan to subsidiary
754,101
-
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Research and development costs
-
219,896
Government grants
(2,697)
-
Fees payable to the company's auditor for the audit of the company's financial statements
20,450
15,750
Depreciation of owned tangible fixed assets
768,498
799,739
(Profit)/loss on disposal of tangible fixed assets
-
32,722
6
Employees

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

2023
2022
Number
Number
Production staff
151
148
Administrative
41
44
Total
192
192
HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
6
Employees
(Continued)
- 16 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,455,461
5,011,945
Social security costs
535,533
471,134
Pension costs
123,871
115,945
6,114,865
5,599,024
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
48,199
9,747
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
188,031
40,204
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
49
Interest on finance leases and hire purchase contracts
16,128
16,127
Other interest
868
-
0
16,996
16,176
10
Amounts written off investments
2023
2022
£
£
Loss on disposal of investments
(85,357)
-
On 24 May 2023, administrators were appointed for Nibnibs Ltd, a 75% subsidiary of the company. On 6 December 2023, Nibnibs Ltd entered liquidation.
HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 17 -
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
2,014,717
312,686
Adjustments in respect of prior periods
45
(133,708)
Total current tax
2,014,762
178,978
Deferred tax
Origination and reversal of timing differences
118,440
(31,855)
Total tax charge
2,133,202
147,123

The UK corporation tax rate during the year was 22.5%. The rate of 19% was applicable to 31 March 2023, with 25% being applicable after this date.

 

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
7,866,329
1,769,939
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
1,771,497
336,288
Tax effect of expenses that are not deductible in determining taxable profit
169,838
618
Effect of change in corporation tax rate
130,784
-
0
Depreciation on assets not qualifying for tax allowances
47,351
-
0
Research and development tax credit
-
0
(54,314)
Under/(over) provided in prior years
-
0
(133,708)
Depreciation in excess of capital allowances
-
0
20,485
Movement in provisions
-
0
(31,855)
Other adjustments
13,732
9,609
Taxation charge for the year
2,133,202
147,123
12
Dividends
2023
2022
£
£
Interim paid
517,195
1,079,942
HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
13
Intangible fixed assets
Trademarks
£
Cost
At 1 November 2022
-
0
Additions
5,000
At 31 October 2023
5,000
Amortisation and impairment
At 1 November 2022 and 31 October 2023
-
0
Carrying amount
At 31 October 2023
5,000
At 31 October 2022
-
0
14
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 November 2022
10,806,365
6,989,092
27,734
17,823,191
Additions
54,737
137,083
-
0
191,820
At 31 October 2023
10,861,102
7,126,175
27,734
18,015,011
Depreciation and impairment
At 1 November 2022
932,345
3,570,023
27,734
4,530,102
Depreciation charged in the year
216,910
551,588
-
0
768,498
At 31 October 2023
1,149,255
4,121,611
27,734
5,298,600
Carrying amount
At 31 October 2023
9,711,847
3,004,564
-
0
12,716,411
At 31 October 2022
9,874,020
3,419,069
-
0
13,293,089

Plant and machinery with a cost totalling £1,253,057 (2022: £1,253,057) and a net book value of £719,883 (2022: £845,189) are held under asset finance agreements. The finance is secured on the asset to which it relates.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
14
Tangible fixed assets
(Continued)
- 19 -

Freehold land and buildings held at deemed cost on transition for FR102 are held based on the directors valuation at the date of transition.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

2023
2022
£
£
Cost
10,418,689
10,363,952
Accumulated depreciation
(1,293,008)
(1,084,634)
Carrying value
9,125,681
9,279,318
15
Investment property
2023
£
Fair value
At 1 November 2022 and 31 October 2023
829,710

The investment properties were last valued by the directors in the year ended 31 October 2021. The directors are of the opinion that the fair value of the properties have not materially altered since that date.

16
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
-
0
85,357
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 November 2022
85,357
Disposals
(85,357)
At 31 October 2023
-
Carrying amount
At 31 October 2023
-
At 31 October 2022
85,357
HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
17
Stocks
2023
2022
£
£
Ingredients
953,122
1,550,918
Packaging
410,131
351,368
Finished goods and goods for resale
285,168
258,846
1,648,421
2,161,132
18
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,468,725
6,170,991
Amounts owed by group undertakings
3,413,610
72,927
Other debtors
375,596
263,186
Prepayments and accrued income
1,248,547
1,022,659
12,506,478
7,529,763

Amounts owed by group undertakings are unsecured and repayable on demand. No interest is charged on this balance.

19
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
21
161,107
161,107
Trade creditors
2,234,399
2,851,694
Corporation tax
1,255,585
119,955
Other taxation and social security
112,757
126,041
Government grants
23
1,348
1,348
Other creditors
76,028
69,357
Accruals and deferred income
581,077
234,219
4,422,301
3,563,721

Obligations under finance leases are secured on the assets in which they relate.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
20
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
21
389,343
550,450
Government grants
23
45,200
47,897
434,543
598,347

Obligations under finance leases are secured on the assets in which they relate.

21
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
177,258
177,258
In two to five years
428,291
605,522
605,549
782,780
Less: future finance charges
(55,099)
(71,223)
550,450
711,557

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. The average lease term is 7 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

22
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
384,700
266,260
2023
Movements in the year:
£
Liability at 1 November 2022
266,260
Charge to profit or loss
118,440
Liability at 31 October 2023
384,700

The deferred tax liability recognised represents timing differences between accelerated capital allowances and the depreciation charge on fixed assets, it will reverse over the period the assets are depreciated for.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
23
Government grants
2023
2022
£
£
Government grants relating to tangible fixed assets
46,548
49,245
Included in the financial statements as follows:
Current liabilities
1,348
1,348
Non-current liabilities
45,200
47,897
46,548
49,245
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
123,871
115,945

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

25
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
21,998
21,998
21,998
21,998
Ordinary 'A' of £1 each
3,001
3,001
3,001
3,001
Ordinary 'B' of £1 each
1
1
1
1
25,000
25,000
25,000
25,000

The different share classes of the company rank pari passu, but have separate rights to dividends.

26
Capital commitments

At the year end, the company was committed to purchasing plant and machinery costing €2,400,000, of which€1,200,000 was unpaid at the year end.

27
Events after the reporting date

On 24 May 2023, administrators were appointed for Nibnibs Ltd, a 75% subsidiary of the company. On 6 December 2023, Nibnibs Ltd entered liquidation. The directors are of the opinion that this does not have a material impact on Haywood and Padgett Limited, all amounts invested in and owed from the subsidiary have been fully impaired in these financial statements.

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
28
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with common directors
-
-
436,648
-
Entities over which the entity has control, joint control or significant influence
710,659
-
0
-
-
2023
2022
Amounts due to related parties
£
£
Entities with common directors
14,019
-
2023
2022
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
-
72,972

At the previous year end, a loan was outstanding of £72,927 from a subsidiary. No interest was charged on the loan. This was loan was subsequently written off during the 2023 year end as a result of the subsidiary entering voluntary liquidation post year end.

 

At the year end, invoices of £680,975 were outstanding from the subsidiary. These have been provided for as a bad debt.

 

During the year, the company purchased the trade and assets of the subsidiary for £208,760.

 

Machinery of a minimal value owned by the company was leased to a director free of charge.

 

The company has taken the disclosure exemption in FRS 102 33.1A regarding transaction with wholly owned group members.

 

HAYWOOD AND PADGETT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 24 -
29
Directors' transactions

Dividends totalling £0 (2022 - £1,079,942) were paid in the year in respect of shares held by the company's directors.

Interest free and unsecured loans were granted to/(from) the company's directors as follows, the closing balances are included in other creditors:

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan
-
(69,357)
72,920
(25,000)
(21,437)
Directors loan
-
9,954
380,172
(444,717)
(54,591)
(59,403)
453,092
(469,717)
(76,028)
30
Ultimate controlling party

The immediate and ultimate parent company is Haywood and Padgett Holdings Limited, a company registered in England & Wales, who prepare group consolidated accounts. Their registered office is The Bakery, Shawfield Road, Carlton Industrial Estate, Barnsley, S71 3HS

The ultimate controlling party is W Padgett, who is a director and majority shareholder of Haywood and Padgett Holdings Limited.

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