The directors present the strategic report for the year ended 31 December 2023.
The Group has achieved turnover of £19,937,071, up 15% on prior year (2022: £17,371,113) for the period ended 31st December 2023. The Group generated a profit before tax of £3,876,025 (2022: £1,624,440) and continues to maintain a strong and passionate workforce employing 37 members of staff. The turnover growth has been achieved by investing in increased storage space enabling the Group to reduce lead times and increase sales volumes).
The Group has net assets of £9,912,384 (2022: £7,544,751) and net current assets of £9,301,521 (2022: £6,883,267) highlighting the financial performance in the year and the strength of The Group overall.
The Group has a liquidity ratio of 4.5:1 which shows the bank loans are sufficiently covered by The Group's cash and debtor balances.
The Group has considered the principal risks and uncertainties to which it is exposed, and this is taken into account when making key strategic decisions. The main risks to the Group include rising business costs including interest rates, increased regulation, foreign currency exposure, supply chain interruptions and competition.
The Directors constantly monitor all potential challenges to the business and proactively take steps to reduce the likelihood and/or impact of all risks.
One way the Group reduces foreign currency exposure is to enter into forward currency contracts. These can have specific end dates or be open for one to six months, providing flexibility over the drawdown and timing of foreign currency loan repayments. Forward contracts are a great way of having visibility of the cost of purchases for a period of time allowing us to provide more certainty to customers on price.
The Group now has the highest stock levels ever which has helped significantly with ensuring our customers’ demands are served as quickly as possible following investment in storage space. At the same time, import loans are being paid off sooner, not only to reduce our reliance on the credit facility with the bank, but also to reduce the impact of high interest rates. The impact on cash flow has been offset by cash generated from increased sales, made possible by holding higher stock levels.
Over the last 36 months Rock Fall have been working hard to reduce imports from China, visiting suppliers in Turkey, Pakistan and India. More of our products have been switched over to these countries, reducing our reliance in China and helping cut emissions significantly.
The Group strives to set itself apart from the competition in many ways. Foot scanning days, wearer trials and liaising with end users directly to bring new, market-led, styles to the safety footwear marketplace.
Our vegan-friendly safety footwear are the first in the UK to be accredited by The Vegan Society and these are just one of the many new innovative products we have on the market.
The Group is in the process of changing the materials and components of all its styles in order to comply with new legislation, improve sustainability and reduce co2 emissions, wherever possible. This includes switching all of our penetration midsole protection materials to include new advanced technologies.
Over the past 30 months we have upgraded approximately 95% of our product range to include elements of sustainability, including rPET woven labels, lining, laces and Biomaterial eco-friendly footbeds where possible. We have also introduced styles into our product range which include 60% recycled waterproof lining with plans for more products currently in development to be released.
Following a collaboration with the female support network group “Bold as Brass” we have made two further safety boots specifically designed for women. We are the only footwear provider in the UK to offer a size 18 safety work boot. We also offer a super wide fitting boot suitable for wearers with medical conditions. Rockfall are constantly striving to satisfy the demands of our wearers, we do this by actively engaging with end-users, looking for gaps in the market, researching appropriate materials and incorporating these into our latest products.
These changes do not happen overnight, we need to research, source and test each new material in every product to ensure they meet the relevant safety standards, and all being sourced from ethically certified suppliers.
In addition, we have changed all of our packaging to be 100% FSC-certified recycled and recyclable cardboard, we also use soy-based bio-ink and water-based glues where possible.
However, we do not stop there, our objective is to continue to reduce our impact on the environment and to endeavour to be as close to net-zero as possible. We do this by working with The Higg Index and organisations such as Positive Planet; employing them to help analyse our operations to target the best ways of reducing emissions. This ensures we don’t rely on carbon credits to pay for tree planting or other inappropriate projects when we can embed corporate and social responsibility into our company culture as well as our brand.
We are also continually developing and assessing new technologies to improve the safety features of our footwear and have already heavily invested in R-Lab, our own product testing facility, which we hope to further invest and build upon. This will have the benefits of helping our designers to move faster on new developments, bringing new technology to market and ensuring we remain as market leaders in safety footwear.
The Group is also:
Only using 100% green electricity suppliers
Supporting the local Derbyshire Wildlife Trust
Combining shipments so we use fewer vessels to transport stock
Using local suppliers for cardboard recycling
Investing in workplace charging
Using GHG Protocol Compliant Emissions Reporting
Benefits to our customers:
Working with an ethical brand who are striving to achieve credible targets in sustainability
A wider customer choice of more sustainable products and Vegan styles
First to market with newly developed and highly advanced materials and technologies
We believe one of our biggest investments must be in our workforce, our staff are the lifeblood of the business and we ensure that we pay the National Living Wage, invest in their care by having trained mental health first aiders and offer them growth. Our staff are encouraged to take training courses and further their skills in areas related to their roles within the business, as our business grows these costs magnify, but employee development is an asset for future expansion.
Key performance indicators for the Group are, turnover, liquidity ratio, gross margin and net margin.
2023 2022
Turnover £000’s 19,937 17,371
Liquidity Ratio 4.5:1 2.8:1
Gross Margin £000’s 6,678 4,257
Gross Margin % 33.5 24.5
Net Margin £000’s 3,876 1,624
Net Margin % 19.44 9.3
The Group takes IT and Security seriously, investing £47,487 (2022: £101,065) in new systems, upgrades and replacements including Password Managers, Cloud Storage, Servers, CCTV and upgraded equipment.
During the year the Group made 5 (2022: 4) new administration positions available in order to facilitate growth and maintain excellent customer service.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £500,596. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Under section 487(2) of the Companies Act 2006, PKF Smith Cooper Audit Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
We have audited the financial statements of Noon Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and the related 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Group and industry, we identify the key laws and regulations affecting the Group and Company. We identified that the principal risk of fraud or non-compliance with laws and regulations related to:
Management bias in respect of accounting estimates and judgements made;
Management override of control;
Posting of unusual journals or transactions;
Significant cash-based transactions.
We focused on those areas that could give rise to a material misstatement in the Group financial statements. Our procedures included, but were not limited to:
Enquiry of management and those charged with governance around actual and potential litigation and claims, including instances of non-compliance with laws and regulations and fraud.
Reviewing minutes of meetings of those charged with governance where available.
Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Performing 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 significant transactions outside the normal course of business and reviewing accounting estimates for bias.
It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
There was no other comprehensive income for 2023 (2022: NIL).
As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s profit for the year was £1,298,651 (2022 - £924,004 profit).
Noon Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Prospect House, 1 Prospect Place, Pride Park, Derby, DE24 8HG. The company registration number is 12470357.
The Group consists of Noon Group Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Noon Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the Group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the Group’s financial statements from the date that control commences until the date that control ceases.
When the Group has acquired subsidiary entities by the issue of shares in itself it has taken advantage of the mergers relief provisions of the Companies Act and has accounted for the difference between the nominal value of the shares issued and the fair value of the assets acquired via the merger relief reserve rather than creating a share premium account.
At the time of approving the financial statements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
Turnover 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.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Freehold land and assets in the course of construction are not depreciated.
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 recognised in the profit and loss account.
The directors do not consider it appropriate to depreciate freehold property since, in their opinion, any charge to depreciation would be immaterial as the estimated residual value of the buildings is not materially different from the carrying value of the building.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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.
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.
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.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 profit and loss account, 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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Amounts not paid are shown in other creditors as a liability in the balance sheet.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future period
The directors do not consider there to be any key sources of estimation uncertainty other than not providing for depreciation on freehold property based on the opinion that the estimated residual value of the buildings are not materially different from the carrying value.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Included in the amounts above are directors' pension contributions of £180,457 (2022: £323).
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The tax assessed for the year is greater than (2022: lower than) the standard rate of corporation tax in the UK of 23.52% (2022: 19%) as set out below.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Included within other debtors is a director’s loan account totalling £100 (2022: £100). This amount is unsecured, interest free and repayable on demand.
Amounts owed to Group undertakings are unsecured, interest free and repayable on demand.
The Group has access to an import loan facility with a limit of £3,000,000. Each maximum loan period is between 100-160 days. Interest is charged at 1.8% per annum over the base rate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The expected net reversal of deferred tax is not expected to be material.
Contributions totalling £4,975 ( 2022: £3,945) were payable to the fund at the balance sheet date.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.
Each class of share has full rights in the company with respect to voting, dividends and distributions.
Merger Reserve
A reserve arising on consolidation, representing the difference between book values aquired and consideration paid upon acquisition of subsidiary investments.
Includes all distributable current and prior period retained earnings.
At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year, the Group paid £71,200 (2022: £67,200) in respect of rent charges to a director.
Included within other debtors is a directors loan account totalling £100 (2022: £100). This loan is unsecured, interest free and repayable on demand.
No one outside of the directors are considered to be key management personnel.