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Registration number: 04201937

Blades Restaurants Ltd

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Blades Restaurants Ltd

Contents

Company Information

1

Strategic Report

2 to 3

Director's Report

4 to 7

Statement of Director's Responsibilities

8

Independent Auditor's Report

9 to 12

Income Statement

13

Statement of Financial Position

14

Statement of Changes in Equity

15

Statement of Cash Flows

16

Notes to the Financial Statements

17 to 29

 

Blades Restaurants Ltd

Company Information

Director

J D Nicholls

Company secretary

T Nicholls

Registered office

2 Guy Close
Stapleford
Nottingham
NG9 7GZ

Accountants

Munslows Accountants Ltd
Chartered Certified Accountant
32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

Auditors

Manex Accountants Ltd
Chartered Accountants and Statutory Auditors
9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD

 

Blades Restaurants Ltd

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is an operator of a group of McDonald's restaurants.

Fair review of the business

The results for the year and the financial position at the end of the year are shown in the annexed financial statements.

As an operator of a chain of McDonald's restaurants the directors consider the company's key performance indicators to be turnover and gross profit. Turnover for the year increased by over 4%, with a similar increase in gross profit compared to the previous year. This was in spite of the fact that during the year the company closed an under-performing store. In common with many other similar businesses and industries, food costs, labour costs and utility costs increased considerably, along with other overheads. Notwithstanding this, the company still recorded an operating profit of £641,058, compared to a loss of £243,664 in the previous year.

The director believes the trading environment in which the company operates will continue to be challenging but remains optimistic regarding future trading and is committed to increasing both future turnover and profitability and to continuing the company’s reinvestment program. The company has continued to invest in the business and in the development and training of its employees, as well as continued investment in IT and store equipment.

Principal risks and uncertainties

The company operates in a highly competitive market with high levels of price sensitivity. Consumer behaviour can impact the company's turnover and profitability. The company continually assesses these risks and mitigates them by adopting a policy of constantly assessing its pricing strategy with ongoing market research.

The company remains exposed to periods of food cost inflation together with the variability of commodity prices both of which impact on profitability. The company continually assesses any risks identified, with the aim of mitigating the threats these may have on the company's operations and profitability. The company's supply chain is closely maintained by McDonald's, who endeavour to negotiate effectively on behalf of all franchisees to ensure better purchasing terms. This helps as much as possible to protect the company from risks associated with fluctuating food costs.

The company is also inherently exposed to pressures within the labour market and to wage cost inflation. The company mitigates this risk by a policy of adopting remuneration and benefits packages designed to be competitive within the market as well as ensuring full compliance with labour market regulations, with employment policies to allow fulfilling career opportunities for all employees.

By its very nature, the Q.S.R. market is extremely competitive, with large numbers of companies operating in the sector. In order to remain at the forefront of this industry, McDonald’s have dedicated teams whose focus is on ensuring they remain the leading brand in the market.

 

Blades Restaurants Ltd

Strategic Report for the Year Ended 31 December 2023

Section 172(1) statement

The success of the Company is the driving factor behind all decisions made by the Director. Decision making processes are structured to enable the Director to evaluate the merit of proposed business activities and the likely consequences of decisions taken over the short, medium and long term. The director remains mindful that any strategic decisions taken can have long term implications for the business and its stakeholders, and these implications are carefully assessed. An example of this is in decisions taken relating to capital investment in terms of possible new store acquisitions and equipment upgrades.

Our people are key to our success. That is why we endeavour to create jobs and opportunities for all our people, regardless of gender, age, or life stage that enhance their work experience. Understanding how our employees feel about McDonald’s is vital. The director takes active steps to ensure that the suggestions, views and interests of the workforce are incorporated and considered as part of any decision-making process, helping to ensure that our employees are given the right support to help achieve their potential. We have developed various employee communication channels such as OurLounge, MyStuff and the McDonald’s UK Intranet, which provide weekly operations updates, employee assistance programs and a means for employees to share ideas and feedback. We also conduct regular surveys into our employee’s job satisfaction and how they feel about their role in the company. We encourage and provide access to online learning and development, as well as providing our people with a mobile friendly platform to manage their own data, holidays, time off and access to view their wage slips.

Our customers are the reason for our existence and we therefore strive to provide high quality food with superior service in a clean and welcoming environment, all at an exceptional value. Long-term commitment to supply McDonald’s UK, has enabled our suppliers to grow with us and drive positive change within their own businesses.

The director carefully considers the impact of the business on communities and the environments in which the company operates. We arrange regular litter collections in the local area around our restaurants. Recycling units are installed around our restaurants and our paper cups are sent to specialist recycling centres in the UK. We endeavour to help our customers build communities, support charitable organisations, and use our size, scope and resources to help make local communities and the environment a better place.

In all our activities the director requires that employees and suppliers conduct business with the highest ethical and professional standards by adhering to our Standards of Business Conduct set by McDonald’s Corporation.

Approved and authorised by the director on 1 August 2024
 

.........................................
J D Nicholls
Director

 

Blades Restaurants Ltd

Director's Report for the Year Ended 31 December 2023

The director presents his report and the financial statements for the year ended 31 December 2023.

Director of the company

The director who held office during the year was as follows:

J D Nicholls

Financial instruments

Objectives and policies

The company’s principle financial instruments comprise bank balances, trade creditors and bank loans. The main purpose of these instruments is to finance the company’s operations and to ensure the smooth running of the company’s operations.

Due to the nature of the financial instruments used by the company there is no exposure to price risk.

In respect of bank balances, the liquidity risk is managed by maintaining a balance to ensure the continuity of trading, through the use of detailed cash flow analysis, forecasts and projections which are regularly updated. In addition, the company has access to overdraft facilities from its bankers which are repayable on demand, should the business require them.

In respect of bank loans, these are provided by financial institutions. The interest rate on these loans is variable, although usually the monthly repayments are fixed. The company manages the liquidity risk by ensuring that there are sufficient funds to meet the payments through the constant review and updating of cashflow forecasts. The interest rate is managed through regular reviews of current and expected future interest rates.

Trade creditor liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

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

The main risks arising from the company's financial instruments are interest risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.

Interest rate risk
The company's exposure to market risk for changes in interest rates is limited to bank loans. The additional requirement for medium to long term debt will be reviewed by the directors based on the company's forecast requirements.

Liquidity risk
The company's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and bank loans.

 

Blades Restaurants Ltd

Director's Report for the Year Ended 31 December 2023

Employment of disabled persons

The company operates an equal opportunities policy in all areas of recruitment and seeks to offer suitable work and training wherever practicable to persons with disabilities. The policy of the company is to ensure that disabled applicants are given full and fair consideration having regards to their particular aptitudes and abilities. Existing disabled employees are given equal access to appropriate training, career development and promotion opportunities within the company. In the event of employees becoming disabled while in the employment of the company, all reasonable means are explored to achieve retention in employment in the same or an alternative capacity.

Employee involvement

The company aims to promote a working environment free from harassment, victimisation, bullying and discrimination. The company regards all of its employees as members of a team, where opinions are valued and everyone is regarded as equal in status and treated with fairness and respect. The company's recruitment procedures are intended to ensure that employees are selected, promoted and treated according to their ability and that everyone has an equal opportunity to receive training and development. The company communicates regularly with all employees on matters relating to its performance, with employees encouraged to contribute to the decision making process through regular staff meetings. In addition there is a bulletin board in each restaurant where memoranda relating to company policy are displayed. There is also an online portal known as Workplace, which contains news and information for McDonald's employees.

Streamlined Energy and Carbon Reporting

In line with the government's streamlined energy and carbon reportingrequirements we are required to report our organisation's carbon emissions for the period 1st January 2022 to 31st December 2022. The results for the year ended 31st December 2021 form the baseline for this report.
 

The McDonald’s franchises attributed to Blades Restaurants Ltd greenhouse gas emissions, reportable under SECR from 1st January 2023 – 31st December 2023, were 1,481 tonnes of carbon dioxide equivalent (tCO2e). These include emissions associated with electricity and natural gas consumption, and refrigerants. The number of sites contributing to this report has decreased from 11 in 2022 to 10 in 2023. The company’s total greenhouse gas emissions increased by 8% compared to revised 2022 figures, because purchased electricity energy consumption (kWh) has increased by 6% and natural gas energy consumption (kWh) has decreased by 35%, from 2022 to 2023.

Notable factors that could have contributed to the movement in emissions are as follows:

• Increase in productivity (5% increase in revenue) which translated to an increase in total energy consumption.
• The number of sites reporting on their emissions changed from 2022 to 2023.
• Revision of methodology to align consumption to McDonald’s AI Track energy consumption figures for FY2023.
• The carbon intensity of the grid electricity increased in 2023 for the first time in a few years, by 7%.
• The methodology for calculating electricity emissions was adjusted to reflect good practice for the inclusion of electrical transport and distribution of losses (T&D losses) (link) under the SECR regulations.

 

Blades Restaurants Ltd

Director's Report for the Year Ended 31 December 2023

Strategy

Boundary, methodology and exclusions

An ‘operational control’ approach has been used to define the Greenhouse Gas emissions boundary[1].
This approach captures emissions associated with your operations in the restaurants. This report covers UK operations only, as required by SECR for Non-Quoted Large Companies.
This information was collected and reported in line with the methodology set out in the UK Government’s Environmental Reporting Guidelines, 2019.

Emissions have been calculated using the latest conversion factors provided by the UK Government. No other material omissions from the mandatory reporting scope. For Refrigerant emissions, GWP conversion factors have been used (High-GWP Refrigerants | California Air Resources Board, Greenhouse Gas Inventory Guidance: Fugitive Emissions (epa.gov).
The company's 2022 electricity emissions have been revised. This update and the inclusion of Transport and Distribution factors for emissions calculation is to reflect good practice in UK reporting as detailed in the GHG Conversion Factors: Greenhouse gas reporting: conversion factors 2023 - GOV.UK (www.gov.uk). This revision also incorporates updated conversion factors.
Energy consumption (in kWh) for periods 1st January 2023 – 31st December 2023 have been used to calculate emissions for the company's FY2023, ending in December 2023.

2023 consumption data from McDonald’s AI Track were used for the gas, electricity, purchased fuel and refrigerants figures. Gas and electricity consumption includes extrapolation carried out by Aligned Incentives.

[1] An operational control approach to GHG emissions boundary is defined as: “Your organisation has operational control over an operation if it, or one of its subsidiaries, has the full authority to introduce and implement its operating policies at the operation”.

 

Blades Restaurants Ltd

Director's Report for the Year Ended 31 December 2023

Metrics and targets

As per SECR guidelines, Blades Restaurants Ltd emission intensity is calculated as the ratio of annual emissions (tCO2e) to the turnover (in £million). For FY 2023, this resulted in an emission intensity of 34.00 tCO2e per £million, which represents a 4% increase compared to the previous year (32.77 tCO2e per £million).

Energy efficiency initiatives

The company has continued to seek and progress energy efficiency measures, within both the work processes and the use of work equipment. McDonald’s are actively taking part in mandatory compliance schemes, such as the Energy Savings Opportunity Scheme, TCFD and considering the implementation of recommendations outlined in the ESOS audit reports.
The following approaches to energy efficiency are being undertaken by McDonald’s Restaurants Limited and will be expanded over the following years:
- Baselining resource use by bringing online increased effort to collate the data on a range of resources
- Implementation Strategy being developed and deployed to create significant energy and carbon reduction
- Engagement Strategy with the Supply chain to reduce the associated emissions further
- Developing Metrics and Targets to reflect performance across our portfolio at the most granular level and more in depth data tracking of the use of resources
- Governance including Board oversight, culture, training and incentives being developed

Emissions and energy consumption

Summary of greenhouse gas emissions and energy consumption for the year ended 31 December 2023:

Emissions source

2022

2023

% share

% change

Electricity

1251

1407

95%

12%

Natural Gas

115

75

5%

-35%

Total Emissions (tC02e)

1366

1482

100%

8%

Turnover (£m)

42

44

5%

Intensity (tC02e/£m)

32.77

34.00

4%

Energy consumption (kWh) -

Electricity

5,925,250

6,251,772

94%

6%

Natural Gas

631,597

409,124

6%

-35%

Total

6,556,847

6,660,896

100%

2%

Disclosure of information to the auditors

The director has taken steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditors are unaware.

Reappointment of auditors

The auditors Manex Accountants Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the director on 1 August 2024
 

.........................................
J D Nicholls
Director

 

Blades Restaurants Ltd

Statement of Director's Responsibilities

The director acknowledges his responsibilities 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 he 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:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

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

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 him to ensure that the financial statements comply with the Companies Act 2006 and in accordance with FRS 102. He 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.

 

Blades Restaurants Ltd

Independent Auditor's Report to the Members of Blades Restaurants Ltd

Opinion

We have audited the financial statements of Blades Restaurants Ltd (the 'company') for the year ended 31 December 2023, which comprise the Income Statement, Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the 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 original financial statements were 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 director are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Blades Restaurants Ltd

Independent Auditor's Report to the Members of Blades Restaurants Ltd

Opinion on other matter prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Director's Report.

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

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

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

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

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

Responsibilities of the director

As explained more fully in the Statement of Director's Responsibilities [set out on page 8], the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or have no realistic alternative but to do so.

 

Blades Restaurants Ltd

Independent Auditor's Report to the Members of Blades Restaurants Ltd

Auditor Responsibilities for the audit of the financial statements

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

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

We obtained an understanding of the legal and regulatory frameworks applicable to the company and the industry in which it operates. We determined that the following laws and regulations were most significant: The Companies Act 2006/FRS 102, Employment Law and Waste, Health and Safety. We enquired of management and those responsible for legal and compliance procedures to obtain an understanding of how the company is complying with those legal and regulatory frameworks and whether they had any knowledge of actual or suspected fraud. We corroborated the results of our enquiries through our discussions with the directors and management. We did not identify any matters relating to non-compliance with laws and regulations or matters in relation to fraud.

In assessing the potential risks of material misstatements, we obtained an understanding of the company’s operations, including its objectives and strategies to understand the expected financial statement disclosures and business risks that may result in risks of material misstatement;

In assessing the appropriateness of the collective competence and capabilities of the engagement team the engagement partner considered the engagement team’s :
 Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation,
 The specialist skills required and
 Knowledge of the industry in which the client operates.

We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
 Assessing the design effectiveness of controls management has in place to prevent and detect fraud;
 Challenging assumptions and judgements made by management in its significant accounting estimates;
 Identifying and testing journal entries, in particular manual journal entries made at year end for financial statement preparation; and
 Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.

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

 

Blades Restaurants Ltd

Independent Auditor's Report to the Members of Blades Restaurants Ltd

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.

......................................
Clinton Meehan BSc FCA (Senior Statutory Auditor)
For and on behalf of Manex Accountants Ltd, Statutory Auditor

9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD

1 August 2024

 

Blades Restaurants Ltd

Income Statement for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

45,044,127

43,138,916

Cost of sales

 

(16,016,767)

(15,310,172)

Gross profit

 

29,027,360

27,828,744

Administrative expenses

 

(28,576,947)

(28,026,980)

Other operating income

4

146,112

20,105

Operating profit/(loss)

6

596,525

(178,131)

Other interest receivable and similar income

7

44

-

Interest payable and similar expenses

8

(63,025)

(65,533)

 

(62,981)

(65,533)

Profit/(loss) before tax

 

533,544

(243,664)

Taxation

12

(139,096)

(64,610)

Profit/(loss) for the financial year

 

394,448

(308,274)

The above results were derived from continuing operations.

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

 

Blades Restaurants Ltd

(Registration number: 04201937)
Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

13

789,501

835,025

Tangible assets

14

2,096,351

2,820,268

Other financial assets

15

12,500

13,750

 

2,898,352

3,669,043

Current assets

 

Inventories

16

221,737

252,504

Debtors

17

197,510

182,963

Cash at bank and in hand

 

3,699,407

4,884,019

 

4,118,654

5,319,486

Creditors: Amounts falling due within one year

19

(3,636,345)

(5,134,840)

Net current assets

 

482,309

184,646

Total assets less current liabilities

 

3,380,661

3,853,689

Creditors: Amounts falling due after more than one year

19

(218,048)

(621,644)

Provisions for liabilities

20

(238,718)

(342,598)

Net assets

 

2,923,895

2,889,447

Capital and reserves

 

Called up share capital

21

100

100

Retained earnings

2,923,795

2,889,347

Shareholders' funds

 

2,923,895

2,889,447

Approved and authorised by the director on 1 August 2024
 

.........................................
J D Nicholls
Director

 

Blades Restaurants Ltd

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Retained earnings
£

Total
£

At 1 January 2023

100

2,889,347

2,889,447

Profit for the year

-

394,448

394,448

Dividends

-

(360,000)

(360,000)

At 31 December 2023

100

2,923,795

2,923,895

Share capital
£

Retained earnings
£

Total
£

At 1 January 2022

100

3,397,621

3,397,721

Loss for the year

-

(308,274)

(308,274)

Dividends

-

(200,000)

(200,000)

At 31 December 2022

100

2,889,347

2,889,447

 

Blades Restaurants Ltd

Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
 £

2022
 £

Cash flows from operating activities

Profit/(loss) for the year

 

394,448

(308,274)

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

944,987

1,156,344

Loss on disposal of tangible assets

5

98,134

-

Loss on disposal of intangible assets

5

16,930

-

Finance income

7

(44)

-

Finance costs

8

63,025

65,533

Income tax expense

12

139,096

64,610

 

1,656,576

978,213

Working capital adjustments

 

Decrease/(increase) in inventories

16

30,767

(73,198)

Increase in receivables

17

(14,547)

(63,651)

(Decrease)/increase in payables

19

(737,427)

1,226,005

Cash generated from operations

 

935,369

2,067,369

Income taxes paid

12

(107,434)

(402,384)

Net cash flow from operating activities

 

827,935

1,664,985

Cash flows from investing activities

 

Interest received

7

44

-

Acquisitions of tangible assets

(286,733)

(93,471)

Proceeds from sale of tangible assets

 

34,483

-

Acquisition of intangible assets

13

(38,360)

-

FA investment - unlisted other shares additions

 

-

(1,250)

FA investment - unlisted other shares disposals

 

1,250

-

Net cash flows from investing activities

 

(289,316)

(94,721)

Cash flows from financing activities

 

Interest paid

8

(63,025)

(65,533)

Repayment of bank borrowing

 

(1,310,141)

(1,285,927)

Repayment of other borrowing

 

9,935

(20,147)

Dividends paid

24

(360,000)

(200,000)

Net cash flows from financing activities

 

(1,723,231)

(1,571,607)

Net decrease in cash and cash equivalents

 

(1,184,612)

(1,343)

Cash and cash equivalents at 1 January

 

4,884,019

4,885,362

Cash and cash equivalents at 31 December

18

3,699,407

4,884,019

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England.

The address of its registered office is:
2 Guy Close
Stapleford
Nottingham
NG9 7GZ

These financial statements were authorised for issue by the director on 1 August 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

At 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.

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Judgements

In the application of the company's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgements and key sources of estimation uncertainty that the directors have made in the process of applying the company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Income taxes

The company is subject to the corporation tax laws of the United Kingdom. These laws are complex and subject to different interpretations by taxpayers and tax authorities. When establishing corporation tax provisions, the directors make a number of judgments and interpretations about the application and interaction of these laws. Changes in these tax laws or in their interpretation could affect the company's effective tax rate and the results of operations in a given period.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Government grants

Government grants are recognised in the financial statements when there is reasonable assurance that the company has complied with all applicable conditions and that the grants will be received. Under FRS 102 the company accounts for government grants using the performance model, with the grant being recognised in Income in computing profit and loss.

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Tax

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

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

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and equipment

between 3 and 15 years straight line

Office equipment

3 years straight line

Motor vehicles

3 years straight line

Goodwill

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

Intangible assets

Separately acquired trademarks and licences are shown at historical cost.

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Amortisation

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

Asset class

Amortisation method and rate

Franchise rights

Straight line over the franchise term

Licence fees

Straight line over the franchise term

Stamp duty

Straight line over the franchise term

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Receivables

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

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

Inventories

Stocks are stated at the lower of average cost and net realisable value. Net realisable value is based on estimated selling price less further costs expected to be incurred prior to completion and disposal.

Payables

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

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

Borrowings

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

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

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

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

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

Defined contribution pension obligation

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

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

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
 £

2022
 £

Sale of goods

45,044,127

43,138,916

4

Other operating income

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

2023
£

2022
£

Miscellaneous other operating income

146,112

20,105

5

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2023
£

2022
£

Loss on disposal of Tangible assets

(98,134)

-

Loss on disposal of intangible assets

(16,930)

-

(115,064)

-

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

6

Operating profit/(loss)

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

878,033

1,082,383

Amortisation expense

66,954

73,961

Operating lease expense - property

4,666,507

4,954,686

Loss on disposal of property, plant and equipment

98,134

-

7

Other interest receivable and similar income

2023
£

2022
£

Other finance income

44

-

8

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

59,234

65,533

Interest expense on other finance liabilities

3,791

-

63,025

65,533

9

Staff costs

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

2023
£

2022
£

Wages and salaries

11,941,569

11,483,672

Social security costs

455,829

471,196

Pension costs, defined contribution scheme

100,607

103,436

Other employee expense

63,286

43,461

12,561,291

12,101,765

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

2023
No.

2022
No.

Crew labour

1,202

1,142

Management labour

44

43

1,246

1,185

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Director's remuneration

The director's remuneration for the year was as follows:

2023
£

2022
£

Remuneration

11,499

10,000

11

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

3,750

3,750


 

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

12

Taxation

Tax charged/(credited) in the income statement

2023
£

2022
£

Current taxation

UK corporation tax

243,009

107,425

UK corporation tax adjustment to prior periods

(33)

(4,205)

242,976

103,220

Deferred taxation

Arising from origination and reversal of timing differences

(103,880)

(38,610)

Tax expense in the income statement

139,096

64,610

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 25% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit/(loss) before tax

533,544

(243,664)

Corporation tax at standard rate

133,386

(46,296)

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

(33)

(4,205)

Tax increase from effect of capital allowances and depreciation

15,062

97,607

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

12,343

17,504

Tax decrease from other tax effects

(21,662)

-

Total tax charge

139,096

64,610

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated capital allowances

-

234,511

-

234,511

2022

Asset
£

Liability
£

Accelerated capital allowances

-

342,598

-

342,598

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

13

Intangible assets

Goodwill
 £

Licence fees
 £

Stamp duty
 £

Total
£

Cost or valuation

At 1 January 2023

948,738

330,000

145,228

1,423,966

Additions acquired separately

-

30,000

8,360

38,360

Disposals

-

(30,000)

(24,974)

(54,974)

At 31 December 2023

948,738

330,000

128,614

1,407,352

Amortisation

At 1 January 2023

374,147

151,589

63,205

588,941

Amortisation charge

44,915

15,160

6,879

66,954

Amortisation eliminated on disposals

-

(20,250)

(17,794)

(38,044)

At 31 December 2023

419,062

146,499

52,290

617,851

Carrying amount

At 31 December 2023

529,676

183,501

76,324

789,501

At 31 December 2022

574,591

178,411

82,023

835,025

14

Tangible assets

Plant and equipment
£

Office equipment
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 January 2023

9,342,372

6,737

2,850

9,351,959

Additions

284,548

2,185

-

286,733

Disposals

(966,061)

(3,499)

-

(969,560)

At 31 December 2023

8,660,859

5,423

2,850

8,669,132

Depreciation

At 1 January 2023

6,522,104

6,737

2,850

6,531,691

Charge for the year

877,365

668

-

878,033

Eliminated on disposal

(833,444)

(3,499)

-

(836,943)

At 31 December 2023

6,566,025

3,906

2,850

6,572,781

Carrying amount

At 31 December 2023

2,094,834

1,517

-

2,096,351

At 31 December 2022

2,820,268

-

-

2,820,268

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

15

Other financial assets (current and non-current)

2023
£

2022
£

Non-current financial assets

Financial assets at cost less impairment

12,500

13,750

16

Inventories

2023
£

2022
£

Closing stocks of food, paper and non-products

221,737

252,504

17

Debtors

2023
£

2022
£

Other debtors

2,470

-

Prepayments

195,040

182,963

197,510

182,963

Current

2023
£

2022
£

Other debtors

2,470

-

Prepayments

195,040

182,963

 

197,510

182,963

18

Cash and cash equivalents

2023
£

2022
£

Cash on hand

28,000

37,000

Cash at bank

3,671,407

4,847,019

3,699,407

4,884,019

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

19

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

22

391,861

1,298,406

Payables

 

1,213,997

1,270,421

Amounts due to related parties

44,542

34,607

Social security and other taxes

 

723,990

1,490,460

Outstanding defined contribution pension costs

 

22,714

18,168

Other payables

 

355,736

18,294

Accruals

 

640,538

897,059

Income tax liability

12

242,967

107,425

 

3,636,345

5,134,840

Due after one year

 

Loans and borrowings

22

218,048

621,644

20

Deferred tax and other provisions

Deferred tax
£

Total
£

At 1 January 2023

342,598

342,598

Increase (decrease) in existing provisions

(108,087)

(108,087)

At 31 December 2023

234,511

234,511

Out of balance to Provisions categories

(4,207)

(4,207)

21

Share capital

Allotted, called up and fully paid shares

2023

2022

No.

£

No.

£

Ordinary shares of £1 each

100

100

100

100

       
 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

22

Loans and borrowings

Non-current loans and borrowings

2023
£

2022
£

Bank borrowings

218,048

621,644

Current loans and borrowings

2023
£

2022
£

Bank borrowings

391,861

1,298,406

Bank borrowings

HSBC term loan is denominated in sterling with a nominal interest rate of 1.2% over base rate%, and the final instalment is due on 9 December 2025. The carrying amount at year end is £411,559 (2022 - £599,467).

Lloyds fixed rate loan is denominated in sterling with a nominal interest rate of 2.75%%, and the final instalment is due on 2 February 2024. The carrying amount at year end is £92,101 (2022 - £636,870).

Lloyds bank loans is denominated in sterling with a nominal interest rate of 1.2% above base%, and the final instalment is due on 4 April 2024. The carrying amount at year end is £106,251 (2022 - £683,713).

 

Blades Restaurants Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

23

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

1,289,484

1,546,440

Later than one year and not later than five years

4,718,646

5,980,207

Later than five years

8,115,125

10,819,420

14,123,255

18,346,067

The amount of non-cancellable operating lease payments recognised as an expense during the year was £4,666,507 (2022 - £4,954,686).

24

Dividends

 

2023

2022

 

£

£

Interim dividend of £3,600.00 (2022 - £2,000.00) per ordinary share

360,000

200,000

25

Analysis of changes in net debt

At 1 January 2023
£

Financing cash flows
£

At 31 December 2023
£

Cash and cash equivalents

Cash

4,884,019

(1,184,612)

3,699,407

Borrowings

Long term borrowings

(621,644)

403,594

(218,050)

Short term borrowings

(1,298,406)

906,544

(391,862)

Directors loan account

(34,606)

(9,934)

(44,540)

(1,954,656)

1,300,204

(654,452)

 

2,929,363

115,592

3,044,955

26

Ultimate controlling party

The ultimate controlling party is Mr J D Nicholls.