Company Registration No. 01812213 (England and Wales)
ROBERT LEE DISTRIBUTION LIMITED
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
ROBERT LEE DISTRIBUTION LIMITED
COMPANY INFORMATION
Director
Ms K E Kirby-Earnshaw
(Appointed 1 March 2024)
Company number
01812213
Registered office
c/o Gssl, The Mill Lane
Glenfield
Leicester
LE3 8DX
Auditor
Bache Brown & Co Limited
Swinford House
Albion Street
Brierley Hill
West Midlands
DY5 3EE
ROBERT LEE DISTRIBUTION LIMITED
CONTENTS
Page
Strategic report
1 - 5
Director's report
6 - 8
Independent auditor's report
9 - 11
Income statement
12
Statement of comprehensive income
13
Statement of financial position
14
Statement of changes in equity
15
Notes to the financial statements
16 - 26
ROBERT LEE DISTRIBUTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The director presents the strategic report for the year ended 31 October 2023.

Review of the business

 

Having previously navigated our way through the pandemic, container shipping challenges, as well as unusually high levels of geographical and economic uncertainty, trading proved difficult in 2023 as the world adjusted to the new normal. Nonetheless 2023 was a productive year for Robert Lee Distribution Ltd delivering turnover for the year of £41 million and a loss for the year before taxation of £2,302,050 (The Profit and Loss Account is set out on page 12). Turnover has decreased by 14.8% on the prior year and the gross profit percentage has increased by 1.5% to 23.8%.

 

The further decrease in turnover and profitability was due to the effect of higher interest rates and its consequent effect on home-related expenditure. The marketplace entered a highly competitive chapter as participants jockeyed for position and market share.

 

We enter 2024 with confidence in the outlook for our business by virtue of a change in ownership and management that occurred in January 2024, coupled with the existing brand recognition and out ability to continue its successful evolution. We remain mindful of macroeconomic and geopolitical risks, but our renewed focus on our people, processes and systems will facilitate continued resilience.

Principal risks and uncertainties

 

Restoring demand for our product offering remains the biggest issue.

 

The Company continues to operate in a mature market, and its performance is directly related to the UK economy generally. The Company seeks to manage the risk of losing customers to key competitors by providing a streamlined set of products to customers, including extended hours of trade and reducing slow-moving items from our inventory which occupies time and resource to manage.

 

The Company's credit risk is primarily attributable to its trade debtors. Credit risk is managed by running credit checks on new customers and by monitoring payments against contractual agreements. This means credit risk is increasing tied to customers' potential inability to pay.

 

In respect of interest rate risk, the Company has changed the profile after the year-end by repaying the group overdraft facilities with NatWest (until repayment, still at a daily rate of 2% over the bank's base rate) with an invoice discounting facility with Secure Trust Bank (STB). This has facilitated business growth, and the Company monitors cash flow as part of its day-to-day control procedures.

Key performance indicators

 

A number of key performance indicators are used to monitor the business. Management aim to achieve a gross profit margin of 22% which is monitored on a regular basis. Sales are analysed by product and by customer and corrective action is taken should variances to budgets occur. Product mix is recognised as key to achieving the Company's desired profit margin.

Financial risk management

 

The Board regularly reviews the financial requirements of the Company and the risks associated therewith. Company operations are primarily financed from retained earnings, inter-company loans and bank borrowings (including the invoice discounting facility).

ROBERT LEE DISTRIBUTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
Legal, regulatory and ethical standards compliance

 

Failure to continuously adapt to the increasingly broad, stringent and fast-evolving regulatory framework applicable to the operations of the company could results in significant financial penalties and reputational damage. Key risk and controls performance indicators are managed through a series of operation meeting and reported to the board.

I cannot report on the resilience of the business over the last year without mentioning the extraordinary effort and dedication of colleagues across the business. From warehouse, logistics, through our head offices departments, contact centres to our sourcing department; people have worked tirelessly to support the business in the face of unprecedented challenges.

We are immensely proud to see how everyone within the business has embraced our challenges, opportunities and ambitions. We would like to thank them for this, and for the continued commitment that they have shown over the past few years whilst having to deal with disruption to both their work and personal lives due to the pandemic.

ROBERT LEE DISTRIBUTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
Directors' statement of compliance with duty to promote the success of the Company

 

This section describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) Companies Act 2006 in exercising their duty to promote the success of the Company for the benefit of its members as a whole.

 

Our stakeholders

 

The directors consider that the following groups are the Company's key stakeholders. The Board seeks to understand the respective interests of such stakeholder groups so they can be carefully considered in the Board's decisions. We do this through various methods, including direct engagement by Board members; receiving reports and updates from members of management who engage with such groups; and coverage in our Board papers of relevant stakeholder interests with regard to proposed courses of action.

 

Having regard to the likely consequences of any decision in the long term

 

The Board remains mindful that its strategic decisions can have long-term implications for the business and its stakeholders, and these implications are carefully assessed. The most prevalent example of this is in the Board's decisions with regard to capital allocation. During the year, in approving the Company's budget the Board balanced:

 

Having regard to the interests of the Company's employees

 

The Board takes active steps to ensure that the suggestions, views and interests of the workforce are captured and considered in our decision-making.

 

Robert Lee Distribution Ltd benefits from having a Chief Executive and other directors who have served with the Company as employees and directors. They all therefore perform a high degree of personal oversight and engagement in the Company’s affairs. This knowledge of the business and active style of engagement means our directors maintain an exceptionally acute insight into the mood, culture and views of the workforce, which they are then able to report on to the wider Board.

 

Employee engagement

 

Robert Lee Distribution Ltd has a number of effective workforce engagement mechanisms in place across the Group:

 

ROBERT LEE DISTRIBUTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -

The Group HR Director attends certain meetings of the Board to brief on employee-related matters, including workforce demographics, engagement activities, the results of employee opinion surveys, staff retention rates, diversity, numbers and nature of whistleblowing, disciplinary and grievance procedures, learning and development activity, pay and reward including gender pay gap and HR initiatives.

 

The Board considers that, taken together, these arrangements deliver an effective means of ensuring the Board

stays alert to the views of the workforce.

 

With regard to health, safety and wellbeing, during the year the Board received an update from the Group Health and Safety Manager including on safety performance, safety risk management and mental health wellbeing initiatives.

 

Suppliers

 

Throughout the year, the Board was briefed on contract renegotiations and strategy with regard to key suppliers, including the Company’s providers of freight forwarding services. The Board seeks to balance the benefits of maintaining strong partnering relationships with key suppliers alongside the need to obtain value for money and the desired quality and service levels for our customers.

 

Customers

 

As a large business, the sentiment of customers can be seen in the Company's underlying sales performance figures, which the Board reviews regularly. The directors provide updates to the Board on their perceptions of consumer sentiment and the market view. The interests of customers are considered in key decisions e.g. relating to product portfolio changes; selection of product lines including third-party brands; selection and monitoring of suppliers to ensure quality and safety standards are met; freight and logistics arrangements to maximise efficiencies from order to delivery.

 

With the interests of customers in mind, during the year the Board reviewed proposals in respect of new brands available, discontinuing brands; capital expenditure on warehouses; freight forwarding and parcel delivery contracts.

 

Debt capital/credit facility providers and credit reference agencies

 

The Finance Director is responsible for managing the relationships with our bank syndicates and credit rating agencies, and for the Company’s cash/debt management and financing activities. The Finance Director provides regular reports to the Board on these activities including the Company's plans to ensure appropriate access to debt capital, monitoring the headroom and maturity schedules of our primary credit facilities.

 

Having regard to the impact of the Company's operations on the community and the environment

 

The Board supports the Company's goals and initiatives with regard to reducing adverse impacts on the environment and supporting the communities that it touches. The Board intends to give further consideration in 2023/24 to the Company's approach to climate change and further measures we can take to contribute to the reduction of our impact on the environment.

 

Corporate governance

 

The Board recognises the importance of operating a robust corporate governance framework.

 

Ethical trading and responsible sourcing

 

The Board exercises strong oversight over the Company’s activities in these areas including reviewing the work of the team, and reports to the Board on such topics as appropriate. During the year, the Board approved the Group's fourth Modern Slavery Transparency Statement, published at http://www.rlee.co.uk.

 

Political donations

 

No donations were made for political purposes (2022: £nil).

ROBERT LEE DISTRIBUTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -

Having regard to the need to act fairly as between members of the Company

 

The Company has just one class of share in issue, and so all shareholders benefit from the same rights, as set out in the Company's articles of association and the Companies Act 2006. The Board recognises its legal and regulatory duties, and does not take any decisions or actions, such as selectively disclosing confidential or inside information, which would provide any shareholder with any unfair advantage or position compared to the shareholders as a whole.

 

Shareholder engagement

 

During the year, the Chief Executive and Finance Director regularly held one-to-one meetings. The Chairman and Directors also engaged with by way of meetings and calls. There is also regular communication with the Chairman and the shareholders.

 

During 2023, we have engaged with shareholders on a range of topics, including:

 

 

The Board receives regular information on shareholder views through a number of different channels:

 

The interests of shareholders were considered as part of the Board's decisions throughout the year including with regard to dividends.

On behalf of the board

Ms K E Kirby-Earnshaw
Director
30 July 2024
ROBERT LEE DISTRIBUTION LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 6 -

The director presents her annual report and financial statements for the year ended 31 October 2023.

Results and dividends

The results for the year are set out on page 12.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

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

Ms K E Kirby-Earnshaw
(Appointed 1 March 2024)
Mr D A Ohandjanian
(Appointed 18 January 2024 and resigned 1 March 2024)
Miss L G Corbersmith
(Resigned 30 June 2023)
Mr M S Earle
(Resigned 18 January 2024)
Mr M R Earle
(Resigned 18 January 2024)
Mr J Oberts
(Resigned 22 September 2023)
Mr C W V Smith
(Resigned 28 February 2023)
ROBERT LEE DISTRIBUTION LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
Business relationships

 

Our people

 

Our workforce is integral to achieving our business objective. We aim to attract, retain and develop the best talent at every level throughout the organization and believe an engaged workforce is vital to achieving our aims. We strive to create a workforce in which everyone is safe; supported and respected; treating fairly and taken care of; listened to; and motivated to achieve full potential. Our colleagues rely on us to provide stable employment and opportunities to realise their potential in a working environment where they can be at their best. We are committed to achieving excellence in the area of health and safety, well-being and the protection of our workforce in their working environment.

 

Our Suppliers

 

It is a key priority of the group to ensure we trade ethically, taking all reasonable and practical steps to ensure we source product that is made by workers who are treated honestly and fairly for the work they undertake and whose safety, human rights and well-being are respected. We work with suppliers to address and resolve issues within our supply chain and to raise standard generally.

 

The Group recognises that the goodwill of its suppliers is important to its success and seeks to build and maintain this goodwill through fair dealings. The Group agrees terms of payment with suppliers at the start of business and then makes payments in accordance with contractual and other legal obligations. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the agreed trading terms of its suppliers.

 

Our Customers

 

Our customers are the reason we exist. The group is committed to offering exciting, excellent quality products that are well made, functional, safe and responsibly sourced and which provide outstanding value to meet or exceed our customer's expectation. The group endeavours to provide high quality service to its customers. Our customer service teams respond to a wide range of customer enquiries and issues. Customer feedback is gathered from a variety of different sources, findings are reviewed, and the information is used by relevant business areas to ascertain how products or services can be improved.

 

Our clients are the backbone of our business. Our continued growth and strong income performance would not have been possible without giving consideration to our clients' needs. We understand our clients' needs and put great emphasis on client satisfaction in order to drive the growth of our business.

 

Our Community

 

Communities and the wider public expect us to act as a responsible company and neighbour, and to minimize and adverse Impact we might have on local communities and environment. The group recognises that its activities have an impact upon communities local to where we operate and also on the wider environment. We seek to minimize any adverse impact as far as possible to engage and support our communities in a positive manner. The group supports a range of charities and organisations, the donations provided can be seen in the financial statements.

 

Our environment

 

The group remains committed to minimizing our environmental impact by reducing bath the carbon intensity of our activities and the natural; resources we use, through the development and operation of good business practices to manage and resource more efficiently throughout their lifecycle. We recognize that risks and opportunities can arise from the physical impacts of climate change and also form regulatory, technological or market trends as society transitions to a low carbon economy. The use of climate scenario analysis will enable us to test the resilience of our business and we will continue to identify transitionary and physical risks and opportunities to help determine what our management response should be.

Post reporting date events

On 18 January 2024, the entire share capital of Robert Lee Distribution Limited was sold to Aqua Brands Distribution Holdings Limited. There have been no other significant events affecting the Company since the year end.

ROBERT LEE DISTRIBUTION LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
Future developments

The Company is investing time and resources into expanding the range of own brand products and continuing to upgrade the IT system.

Auditor

Bache Brown & Co Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Energy and carbon report

The company emitted 293 tonnes of carbon (or 1.54 tonnes per employee) during the financial year, consisting of 154 tonnes related to its fleet (scope 1), 138 tonnes on electricity and 2 tonnes on gas (scope 2). This was calculated from a review of fleet fuel and other expenditure, as well as usage of electricity and gas at the company's sites during the year. The company has sought to reduce emissions further by looking into electrifying the fleet as much as practicable, as this is the single largest contributor to its emissions.

Statement of director's responsibilities

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

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is 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 director is required to:

 

 

The director is 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. She is 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.

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.

On behalf of the board
Ms K E Kirby-Earnshaw
Director
30 July 2024
ROBERT LEE DISTRIBUTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ROBERT LEE DISTRIBUTION LIMITED
- 9 -
Opinion

We have audited the financial statements of Robert Lee Distribution Limited (the 'company') for the year ended 31 October 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

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

Opinions on other matters prescribed by the Companies Act 2006

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

ROBERT LEE DISTRIBUTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ROBERT LEE DISTRIBUTION LIMITED
- 10 -
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:

Responsibilities of director

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 has 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Approach to assessing the risks of misstatement due to irregularities, including fraud

We assess the risk of material misstatement in respect of fraud by meeting with management to understand where it considered there was susceptibility to fraud.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant reporting frameworks which are likely to affect the company include FRS102, the Companies Act 2006 and the relevant tax laws. In addition we determined that there were no significant laws and regulations which have a direct effect on the amounts and disclosures in the financial statements.

Audit response to risks identified

We considered the risk of fraud through management override on controls. We also considered how management bias may impact upon performance targets.

In response we performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of any significant transactions outside the normal course of business, reviewing accounting estimates for management bias.

Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquiries with management around actual and potential claims. Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

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.

ROBERT LEE DISTRIBUTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ROBERT LEE DISTRIBUTION LIMITED
- 11 -
Ian Richard Baker
Senior Statutory Auditor
For and on behalf of Bache Brown & Co Limited
30 July 2024
2024-07-30
Chartered Certified  Accountants
Statutory Auditors
Swinford House
Albion Street
Brierley Hill
West Midlands
DY5 3EE
ROBERT LEE DISTRIBUTION LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
2023
2022
Notes
£
£
Turnover
3
41,170,894
48,317,216
Cost of sales
(31,386,402)
(37,522,781)
Gross profit
9,784,492
10,794,435
Distribution costs
(6,328,757)
(6,080,307)
Administrative expenses
(5,757,785)
(6,255,674)
Loss before taxation
(2,302,050)
(1,541,546)
Tax on loss
7
160,767
(36,875)
Loss for the financial year
(2,141,283)
(1,578,421)

The income statement has been prepared on the basis that all operations are continuing operations.

ROBERT LEE DISTRIBUTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
2023
2022
£
£
Loss for the year
(2,141,283)
(1,578,421)
Other comprehensive income
-
-
Total comprehensive income for the year
(2,141,283)
(1,578,421)
ROBERT LEE DISTRIBUTION LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 OCTOBER 2023
31 October 2023
- 14 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
927,824
1,045,433
Investments
9
1
1
927,825
1,045,434
Current assets
Stocks
11
6,235,803
7,144,957
Debtors
12
11,824,954
10,209,796
Cash at bank and in hand
667
1,036
18,061,424
17,355,789
Creditors: amounts falling due within one year
13
(11,512,146)
(8,782,837)
Net current assets
6,549,278
8,572,952
Net assets
7,477,103
9,618,386
Capital and reserves
Called up share capital
16
999
999
Profit and loss reserves
7,476,104
9,617,387
Total equity
7,477,103
9,618,386
The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
Ms K E Kirby-Earnshaw
Director
Company Registration No. 01812213
ROBERT LEE DISTRIBUTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 15 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 November 2021
999
11,195,808
11,196,807
Year ended 31 October 2022:
Loss and total comprehensive income for the year
-
(1,578,421)
(1,578,421)
Balance at 31 October 2022
999
9,617,387
9,618,386
Year ended 31 October 2023:
Loss and total comprehensive income for the year
-
(2,141,283)
(2,141,283)
Balance at 31 October 2023
999
7,476,104
7,477,103
ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 16 -
1
Accounting policies
Company information

Robert Lee Distribution Limited is a private company limited by shares incorporated in England and Wales. The registered office is c/o Gssl, The Mill Lane, Glenfield, Leicester, LE3 8DX.

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. 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 financial statements of the company are consolidated in the financial statements of New River Holdings Limited. These consolidated financial statements are available from Companies House.

1.2
Going concern

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

Forecasts have been prepared for a period of more than 12 months from the date of approval of these financial statements. The forecast indicates that, whilst taking into account reasonable downsides, sufficient funds are expected to be generated within the Company so as to meet the liabilities of the Company as they fall due.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services 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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -

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.

1.4
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:

Plant and equipment
10% / 20% Straight line
Fixtures and fittings
15% Reducing balance / 20% Straight line
Motor vehicles
20% 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.

1.5
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.

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.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 18 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
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 held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
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.

1.9
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 statement of financial position 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 19 -
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.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

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, loans from fellow group companies and preference shares that are classified as debt, 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 20 -
Derecognition of financial liabilities

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

1.10
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.

1.11
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 income statement 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.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
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.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

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

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is 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.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
41,170,894
48,317,216
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,150
30,250
Depreciation of owned tangible fixed assets
206,143
223,843
Profit on disposal of tangible fixed assets
(3,535)
(47,418)
5
Employees

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

2023
2022
Number
Number
General Staff
183
186
Directors
4
6
Total
187
192

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,561,776
5,669,086
Social security costs
458,347
508,047
Pension costs
120,596
133,987
6,140,719
6,311,120
ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
118,305
236,062
Company pension contributions to defined contribution schemes
2,343
5,983
120,648
242,045

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
90,094
126,847
Company pension contributions to defined contribution schemes
2,343
3,252
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
93,818
Adjustments in respect of prior periods
(160,767)
-
0
Total current tax
(160,767)
93,818
Deferred tax
Origination and reversal of timing differences
-
0
(56,943)
Total tax (credit)/charge
(160,767)
36,875
ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
7
Taxation
(Continued)
- 23 -

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

2023
2022
£
£
Loss before taxation
(2,302,050)
(1,541,546)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(575,513)
(292,894)
Unutilised tax losses carried forward
529,651
400,627
Adjustments in respect of prior years
-
0
93,818
Permanent capital allowances in excess of depreciation
26,250
15,806
Research and development tax credit
(160,767)
(117,482)
Other permanent differences
(65,700)
(56,943)
Changes in provisions leading to an increase (decrease)
85,312
(6,057)
Taxation (credit)/charge for the year
(160,767)
36,875

The company has tax losses of £3,404,852 (2022: £1,126,150) available to carry forward against future taxable profits.

8
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 November 2022
2,097,127
932,497
258,966
3,288,590
Additions
-
0
95,266
-
0
95,266
Disposals
(16,070)
-
0
(60,321)
(76,391)
At 31 October 2023
2,081,057
1,027,763
198,645
3,307,465
Depreciation and impairment
At 1 November 2022
1,344,296
677,237
221,624
2,243,157
Depreciation charged in the year
79,645
95,888
30,610
206,143
Eliminated in respect of disposals
(16,070)
-
0
(53,589)
(69,659)
At 31 October 2023
1,407,871
773,125
198,645
2,379,641
Carrying amount
At 31 October 2023
673,186
254,638
-
0
927,824
At 31 October 2022
752,831
255,260
37,342
1,045,433
ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 24 -
9
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
10
1
1
10
Subsidiaries

Details of the company's subsidiaries at 31 October 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Synergy Bathroom Solutions Ltd
C/O Gssl The Mill Lane, Glenfield, Leicester, United Kingdom, LE3 8DX
Ordinary
100.00
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
6,235,803
7,144,957
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,277,304
5,876,233
Amounts owed by group undertakings
5,945,724
3,668,297
Other debtors
1,029
-
Prepayments and accrued income
600,897
665,266
11,824,954
10,209,796
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
7,074,549
3,732,453
Trade creditors
4,087,789
4,393,795
Taxation and social security
107,105
113,729
Accruals and deferred income
242,703
542,860
11,512,146
8,782,837
ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 25 -
14
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
7,074,549
3,732,453
Payable within one year
7,074,549
3,732,453

The bank overdraft is secured by fixed charges over assets of the company. The charge was satisfied on 25 March 2024, with the balance being repaid.

15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
120,596
133,987

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.

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
999
999
999
999
17
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
799,806
398,855
Between two and five years
-
0
260,921
799,806
659,776
18
Related party transactions
Transactions with related parties

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

ROBERT LEE DISTRIBUTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
18
Related party transactions
(Continued)
- 26 -
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Lucabella Sourcing Limited
-
12,337
-
45,055
19
Ultimate controlling party

The ultimate parent company is Aqua Brands Distribution Holdings Limited, a company registered in England and Wales.

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