52 Week Period ended
Registration number:
Seasalt Limited
Contents
Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Statement of Comprehensive Income |
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Balance Sheet |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
Seasalt Limited
Company Information
Directors |
L G Chadwick D A Chadwick N M Chadwick P L Hayes |
Company secretary |
L G Chadwick Michelmores Secretaries Limited |
Registered office |
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Solicitors |
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Bankers |
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Auditors |
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Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
The directors present their strategic report for the 52 week period from 29 January 2023 to 27 January 2024.
The strategic report highlights the past year's performance and how it has been achieved alongside our future vision and strategy. The strategic report provides a picture of where the business is and where it is going.
Principal activity
The principal activity of the company is the design and sale of clothing and footwear.
Chief Executive's review
Seasalt has had an excellent year, with revenues up 12% year on year. Despite facing ongoing external challenges and economic uncertainty, we have performed beyond expectation, identifying and maximising opportunity in the market to arrive at an impressive set of results for the period ended January 2024. Some of our report highlights include the following;
We had a record-breaking year in our stores, achieving a 10% increase across our portfolio. This performance belies the pressures that have been experienced more broadly in the Retail sector and the business landscape recently.
We continued to open new Seasalt stores in the UK and Ireland throughout 2023, including Meadowhall, Aberdeen, Trentham, Malvern, a trial store in Plymouth and our third Irish store in Kenmare. This takes our total number to 73, with no loss-making stores in the Group. Our full-price stores are a strong brand awareness driver and this growth in awareness further supports our online business too.
We made impressive progress in growing relationships with strategic partners Marks & Spencer, Next and Zalando, amongst others, including a combination of online only and physical stores. Our partner activities account for approximately 13% of Group revenues, an increase of 4% on the prior year.
Through our wholesale business we have made significant progress in opening and expanding new international markets like the Republic of Ireland, Germany, Switzerland, Czech Republic and New Zealand.
We have invested heavily in technology over the year, undertaking a process to implement a new ERP solution, along with a major transformation of our data platform. These improvements will deliver efficiencies and increased productivity across the business.
The company is pleased to report net profit of £5.3m, representing a 305% increase (£3.5m) on the previous year.
We have a clear focus on our vision for the future and what we need to prioritise to deliver growth in line with our three-year business plan and beyond. Building on the strength of our brand and product offering, we will continue to look at ways to innovate and exceed our customers’ expectations so that we remain relevant and aspirational within the marketplace, both in the UK and internationally.
Our performance is reflective of the commitment and dedication of the entire team across the business and paves the way for success in the year ahead. I would like to thank everybody for their individual and continued contribution.
Paul Hayes
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Statement from Seasalt Group Chairman
As we report strong trading results for the period ended January 2024, we are embarking on an exciting next phase of growth at Seasalt, with our sights firmly set on realising our international expansion plans.
The year ahead marks a milestone for the business when the Seasalt group will open its first Seasalt stores in North America, seeing a longstanding ambition become reality. Our intention is to open up to twenty stores in the US over the next three years, with a focus on growing our brand significantly in the US market. We have already established a good foundation through our existing partnerships as a springboard to accelerate our expansion, and having a physical presence, through our store opening programme, is very important to us. The group's US ambitions will help grow the company's international brand and further support the company's own international growth.
In 2023, we opened our first Seasalt franchise store in Auckland, with our partner Ballantynes, the start of a journey that will see us open a number of franchise stores with partners across international markets. We also continue to develop our strategic partner business internationally, demonstrating that our brand resonates with an international customer through global online reach, both with marketplace partnerships and selected department stores that share our values.
I look forward to the roll out of our international growth plan and making the coming trading year 2024 another successful year for Seasalt.
Mike Harrison
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Strategic Management
Seasalt is a contemporary clothing brand that takes inspiration from the landscape and artistic heritage of our coastal home in Cornwall, England. Each of our carefully curated collections is built on our brand values of creativity, responsibility, inclusivity and a customer-first mindset.
Established in Cornwall by the Chadwick family in 1981, consistent growth through the last four decades has seen Seasalt become the thriving £130m+ business that it is today. Our vision is to maintain our position as one of the UK's most popular clothing brands and to build and accelerate our global growth, with a growing community of loyal customers across the globe.
Hailed by industry title Drapers as 'one of the biggest success stories of British retail in recent years,' we now have a successful online presence, 73 Seasalt shops across the UK and Ireland, strategic partner channels such as Marks & Spencer, Next and Zalando, and we ship to an ever-expanding global customer base.
Seasalt is committed to operating in an honest and responsible way. We were pioneers of organic cotton in the fashion industry, helping to develop the Global Organic Cotton Standard (GOTS) in 2005 and becoming the first fashion brand to be awarded Soil Association certification for its organic products.
Our design team is continually working on new and innovative fabrics, always striving to find more environmentally conscious options, and only working with suppliers that meet strict ethical standards. Our ambitious sustainability targets include increasing the use of certified sustainable materials in our products year on year and transitioning to become a Carbon Net Zero business by 2040. Seasalt is a full member of the Ethical Trading Initiative (ETI), is GOTS organic certified and has validated Science Based Targets.
Much thought and consideration go into tailoring our proposition to provide our customers with solutions to their style needs. We pride ourselves on our deep customer understanding, which is both data and intuition driven, and we remain closely aligned to the values and causes that our customers believe in.
Celebrating individuality and bringing creative, confident dressing to people of all ages, through responsible choices, drives our desire to grow and innovate; delighting our existing loyal community and reaching new audiences around the world.
Never content to stand still, we have developed a channel strategy and international roadmap for continued future growth. The success of that strategy is apparent from the results set out in the business review.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Seasalt has a different brand model:
Distinctive brand ethos
A clear and recognisable brand ethos, inspired by its Cornish coastal heritage. High quality products with a distinctive, artist influenced aesthetic.
Comprehensive range
Offering a versatile, comprehensive casual wardrobe solution. Regular product launches with a focus on proven products and designs.
Sustainability and inclusivity credentials
Inclusive range of sizes and fits. Clear values on sustainability that are recognised and valued by the customer.
Premium price integrity
Affordable quality for customers seeking to broaden their spend beyond high street brands, with high levels of price integrity.
Digital first model
D2C focused multi-channel brand. A growing online platform with a complementary store network and strategic brand partnerships.
Creativity
Seasalt brand handwriting, inspired by our Cornish heritage, is brought to life by our talented team of in-house designers, making our aesthetic instantly recognisable. Hand-drawn prints, distinctive colour palettes and our artistic heritage are all things we are famous for.
Responsibility
'Life Worn Well' is our brand philosophy, enabling our vibrant community of Seasalt customers to be confident in their style choices while looking out for people and the environment. A long-standing commitment to keeping sustainability at the heart of everything we do means that every Seasalt collection is made to love and last, in quality fabrics that wash and wear beautifully.
Sharing stories of Cornwall and the people and places that inspire us brings our customers together while setting our brand apart. The result is a strong and passionate community of people who are connected beyond buying our products through shared values around sustainability, inclusion and cause-related initiatives.
Inclusivity
We reflect the diversity of our audience across our range, demonstrating inclusivity on fit and size. As a business, we maintain a full-price strategy while still making our products accessible to our customers, believing that our prices are a fair reflection of the quality and workmanship that goes into every piece.
Dedication
We take an above and beyond approach to customer service, whether that is in-store, online or in our communications. We are dedicated to providing our customers with exceptional experiences through every touchpoint, with beautiful store environments which convey our brand ethos and values.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Business Review
The directors monitor the company's performance by reference to the comparison of actual results to forecasts and a number of key performance indicators including online sales, store sales, third-party sales, conversion and traffic measures, gross profit margins, earnings before interest and tax and cash flows.
Financial KPIs |
Unit |
2024 |
2023 |
Increase / (decrease) in turnover |
£'000 |
13,648 |
22,523 |
Gross profit margin |
% |
54.8 |
51.1 |
Current ratio |
1.4 |
1.3 |
|
Profit before interest and tax |
£'000 |
8,066 |
2,553 |
Overall, the year ended January 2024 was an excellent year with revenues of £133m, up 12% on the prior year. From a trading perspective the highlights were as follows:
• Stores continued the growth trajectory established over the last few years with all store types forging ahead of prior year levels again on a like-for-like basis and ended the year 10% up on prior year. This was significantly ahead of expectations given they had grown on a like-for-like basis the year before. The stores did not show any real signs of the economic pressures that were evident more broadly in the Retail sector and wider business landscape. We did experience a slight fall in the frequency of customer visits but this was more than offset by a significant increase in the spend per customer per visit. The stores have never performed better and they continue to make a significant contribution to the profitability of the group as whole;
• Our full-price stores play an important dual role in terms of direct revenue but also the positive brand awareness driven by the stores that assists our online business. We therefore maintained a modest store expansion programme with five new UK store openings in the year. These were Meadowhall, Aberdeen, Trentham, Malvern and a trial store in Plymouth. We also opened our third Irish store - in Kenmare. There are no loss-making stores in the Group, as has been the case for years, and there are no plans to close any stores in the short-term;
• The online business suffered from the High Street bounce but despite this managed to deliver modest growth in revenues over prior year. The store and online channels represent 79% of Group revenue with stores representing 49% and online 51% of that split. We understand that most retailers, as we did, found it much harder, and increasingly expensive, to maintain online growth during the year. We continue to believe that it is best to have core strengths in both channels and to provide customers with a seamless experience wherever they prefer to browse and shop. We remain confident in our ability to grow our online business, both in the UK and internationally, and continue to invest significantly in the technology and people supporting this. Online growth forms a significant building block in our business plan;
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
• We continued to make excellent progress in growing our relationships with key strategic partners like Marks & Spencer, Next and Zalando and overall our partner activities represented about 13% of group revenues (up by 4% year on year). The majority of these relationships are online only but some also include physical stores. Our partner in New Zealand, Ballantynes, opened the first Seasalt franchise store during the year, in Auckland. We intend to continue to open a small number of franchise stores with Ballantynes and similar partners in other markets. We continue to develop our key strategic partner business, to grow our revenue internationally and ship to a continuously expanding customer base; and
• The remainder of revenue was delivered by our wholesale channel, comprising a combination of large partners that trade on wholesale terms and also multiple small accounts maintained by our network of independent wholesale agents in the UK and in several key international markets like the Republic of Ireland, Germany, Switzerland, Czech Republic and New Zealand. This business is very stable and continues to play a part in our distribution strategy.
• One of the financial highlights from the year was our success in delivering improved product margins. This was the combined result of improvements in sourcing but also a fall in inbound freight costs back to more normal levels. As a result of these improvements gross profit margin increased from 51.1% to 56.2%.
• We continued to invest significantly in technology during the year. We are in the process of implementing Mircosoft D365 as our future ERP solution, replacing Microsoft Dynamics AX, which we have been using since 2015. This is being accompanied by a major data transformation programme to modernise the data platform that we use, shifting to make full use of Microsoft Azure and Power BI for all key business reporting and data analysis. This programme is a major multi-year project and will lead to significant increases in Intangible Asset balances from 2022 through to 2025. We reached an important milestone in this project in March 2024 with the implementation of the D365 point-of-sale software across our store estate and D365 order management to improve our ability to route online orders to stores and for stores to pick, pack and despatch those orders. We have had these capabilities for some years but the D365 versions are already delivering improved functionality and significantly faster processing times. The project is now focussed on delivering the core elements of D365 responsible for finance, stock and warehouse management, which are currently expected to go live in early 2026.
• As a result of the combined effect of the above and without non-recurring costs incurred last year (Note 5), the company is able to report net profit before interest and taxation of £8.0m, an increase of £5.5m (145.5%) over prior year.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Principal risks and uncertainties
Trading Risk:
The retail sector continues to face uncertainties in its trading environment. Consumer sentiment remains negatively impacted by the cost-of-living crisis and inflationary pressures. As at the date of this report, the company has had a good trading year so far, with stores in particular having their best year ever overall, up a further 10% on the same period last year on a like-for-like basis. The online channel has done well, and is also up on prior year, but continues to prove more sensitive to consumer sentiment and the discounting activities of some competitors. The ebb and flow of demand between channels over the last few years demonstrates the benefit of having a good balance between the store and online channels. To capitalise on the strength of our stores, we opened a further five stores in 2023 and plan to open six more stores during the 2024 year.
The company also continues to increase new online partners and marketplaces in the UK and elsewhere to further grow sales and raise brand awareness. We have also been working with our long-term New Zealand partner, Ballantynes, to open Seasalt's first overseas franchise store in Auckland, which opened its doors on 1 September 2023. More stores are planned for New Zealand next year. Following increased investment in our team, we expect significant growth in international partner activity, including further franchise stores, during 2024 and beyond.
The directors believe that the strength of the company's brand and product and the actions already taken, and ongoing, to grow online, reduce costs and manage cashflow will safeguard the company’s viability for the foreseeable future.
Liability Risk:
The company maintains the usual commercial insurance policies for a business of this type. The Board has a policy of ongoing identification and review of key business risks, which may impact on the ability of the company to carry on its operations, taking appropriate steps to manage these risks.
Supply Risk:
The company is heavily dependent on overseas manufacture of the products it designs and manages the risk of disruption to its supply chain by sourcing from carefully selected suppliers in various countries. The company encourages local small manufacturers through various initiatives. Important steps have been taken during the last 12 months to build a more diverse supply base and reduce the proportion of product sourced from China in favour of alternatives like Bangladesh and Sri Lanka. This has been combined with achieving improvements in quality and margin, along with meeting our material sustainability goals.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Financial Risk Management
The company has exposure to a variety of financial risks, which are managed with the purpose of minimising any potential adverse effect on the company's performance. The directors have policies for managing each of these risks and they are summarised as follows:
Exchange Risk:
The company is significantly reliant on production overseas with substantial creditors denominated in US Dollars. To manage the risk the company arranges currency forward contracts at the start of the ordering process for each season.
Financial Risk:
The company works closely with its shareholders and bank to secure finance appropriate to the nature of the business. The company maintains tight controls over cashflow and prepares detailed cashflow forecasts to ensure liquidity is maintained into the medium-term and to manage its performance to comply with the conditions of its external financing arrangements.
Environmental, Social, Employee and Community Matters
Ethical Trading
Seasalt has developed an ethical trading policy and does its best to ensure that all of its products are made in modern and safe environments. It is the aim of the Company to share its commitment to its working standards with all suppliers, each of whom is asked to comply with the Group Purchasing Policy.
After two years as foundation members, Seasalt graduated to full membership of the Ethical Trading Initiative (ETI), an alliance of companies, trade unions and NGOs that promotes respect for workers' rights around the world.
The Company's graduation to full ETI membership reflects Seasalt's commitment to ensuring the highest standards of ethics throughout its supply chain. More details of these policies can be found on our website: seasaltcornwall.co.uk/sustainability/reports-policies
The Environment
The company is committed to maintaining and improving its environmental performance and has developed an Environmental Policy (also found via the aforementioned link). Seasalt was among the first fashion brands to sign up to the British Retail Consortium's Climate Roadmap, which pledges to support the retail industry in achieving carbon net zero by 2040 at the latest. Through its own initiatives, Seasalt plans to achieve net zero well before 2040.
The company recognises that its global operations have an environmental impact and is committed to monitoring and reducing emissions year-on-year. The company is also aware of its reporting obligations under The Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. We continue to report all material greenhouse gas (“GHG”) emissions across our global operations.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Carbon reporting
Seasalt Limited is reporting against the Streamlined Energy and Carbon Reporting (SECR) framework for the reporting period of 01 February 2023 to 31 January 2024. Seasalt Limited is reporting as a 'large' unquoted company and all the minimum requirements have been addressed and are presented here alongside the energy usage and emissions Seasalt Limited has voluntarily chosen to report for our international activities in Ireland.
Seasalt Holdings Limited is the parent company of Seasalt Limited, a large unquoted company with an obligation to report under the regulations. The Carbon Trust has reviewed Seasalt Limited’s carbon emissions and reports as follows.
The methodology used to calculate emissions is the WBCSD/WRI Greenhouse Gas Protocol: a corporate accounting standard: revised edition in conjunction with UK Government environmental reporting guidelines including SECR guidance, March 2019. Emissions have been calculated using UK Government GHG emissions conversion factors for company reporting 2023. An operational control approach has been taken.
Scope 2 emissions from purchased electricity are reported using a location-based approach. However, Scope 2 emissions using a market-based approach were also calculated. Using a location-based approach, total GHG emissions are 508.39 tonnes CO2e. Using a market-based approach the total GHG emissions are 137.63 tonnesCO2e.
Seasalt Limited total energy consumption for 2023-24 is 2,417,271 kWh. This includes the company’s electricity and natural gas usage, and transport fuels for business travel in employee-owned cars and hire cars. For comparison, the energy consumption reported for the previous SECR period 2022-23 was 2,525,606 kWh. It is important to note that the previous energy consumption for 2022-23 did not include energy use associated with transport.
For 2023-24, the total carbon emissions associated with our reported energy use are 508.39 tonnesCO2e. For comparison, the total carbon emissions reported for the previous SECR period 2022- 23 were 572.24 tonnesCO2e. The breakdown by emission scope is shown below.
Carbon Emissions (mandatory) |
2023-2024 |
2022-2023 |
||
Scope 1 emissions (tonnesCO2e) |
14.6 |
20.9 |
||
Scope 2 (location-based) emissions (tonnesCO2e) |
426.9 |
466.3 |
||
Scope 3 emissions - business travel where responsible for fuel (tonnesCO2e) |
66.9 |
85.1 |
||
Total emissions |
508.4 |
572.2 |
||
Total emissions per £m revenue |
3.8 |
4.8 |
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Carbon Emissions (mandatory + voluntary) |
2023-2024 |
2022-2023 |
||
Scope 1 emissions (tonnesCO2e) |
22.4 |
39.6 |
||
Scope 2 (location-based) emissions (tonnesCO2e) |
451.9 |
477.7 |
||
Scope 3 emissions - business travel where responsible for fuel (tonnesCO2e) |
66.9 |
85.1 |
||
Total emissions |
541.2 |
602.4 |
||
Total emissions per £m revenue |
4.1 |
5.1 |
Seasalt Limited is reporting the following energy efficiency actions this year:
• LED upgrades across retail properties (underway in a continuous programme)
• Replacement of gas boilers (in progress)
• Caps over thermostat controls in Head Office (open plan areas)
• Signage and communications to raise awareness in staff areas - turn lights off, turn kettles/microwaves off between use etc.
Social and Community
We are committed to making meaningful contributions to charities and communities close to us.
As one of Cornwall's biggest employers, we have the passion and resources to strengthen community resilience both in Cornwall and further afield. We recognise that our activities have a direct impact on the wellbeing of employees, customers, suppliers and the wider communities in the places where Seasalt has a presence. That's why we set ourselves the target of donating £1 million to charity and achieving 20,000 hours of volunteering, by the end of 2025.
We recognise that it has been a challenging time for many people due to cost-of-living pressures and other socio-economic factors in recent years. Through our partnership with mental health charity Mind, now in its fourth year, we continue to raise funds for the vital services they provide and communicate to Seasalt employees and customers that no one should have to face a mental health problem alone. Closer to home, our work includes a joint project with Cornwall Wildlife Trust to restore carbon-capturing seagrass meadows.
We also support community initiatives in Cornwall, these include sponsoring a Creative Writing Award in partnership with charity Young & Talented Cornwall and primary school days at the North Cornwall Book Fair, among many others.
Meanwhile, our Seasalt Volunteering programme offers everybody across our business the opportunity to take paid time out every year to support the good causes they believe in.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Employees
The company employs 1,344 people (as at January 2024) with a diverse range of talent and is committed to valuing this diversity in the effective employment of people in the best interests of the company and of the staff.
The company is an equal opportunities employer providing employment and development opportunities to suitably skilled people regardless of age, race, colour, religion, gender, sexual orientation, ethnic origin, nationality, marital status or disability. We ensure that the working environment is inclusive and progressive so that employees can reach their potential and fulfil their ambitions.
To further support inclusivity as a business priority, Seasalt's Inclusion strategy covers three pillars;
• Opening Doors (social mobility)
• Empowering Women (supporting women into leadership & providing support/raising awareness of women's health issues)
• Valuing perspectives (giving employees a voice and raising awareness/celebrating role models in under-represented groups)
The company recognises that our people are responsible for the success of the Seasalt brand. We're committed to recognising and rewarding our people for their dedication. We have a focused Employee Engagement team, along with a 33 strong People team to ensure teams feel supported and reassured that the business prioritises their wellbeing and engagement.
The company regularly communicates news and updates, including strategic objectives and performance, via content on our intranet, newsletters, events and training, to ensure a consistent flow of information across the business.
The company recognises differing employee needs and tries to accommodate wherever possible. This has included hybrid and remote working and an enhanced rewards and benefits package, tailored to our employees' requests.
Pension Reform
The company introduced a workplace pension scheme in April 2014.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Business Environment
Though the external business environment remained challenging in 2023, and remains so to date in 2024, the company expects to see a further growth in its own online and store channels and with strategic partners. Headline inflation continues to fall but wage inflation remains quite high and the directors believe this will help drive further improvements in consumer sentiment during the year. The directors are particularly focused on international growth and are in the process of establishing distribution with partners in a number of important international markets. They will continue to focus investment on the company’s digital transformation strategy to ensure the business makes optimum use of best-in-class technology. This will deliver a seamless unified retail experience to customers and identifies and delivers on opportunities to streamline processes and drive efficiencies. The directors believe a resilient retail business plan involves a balanced approach between a strong UK store estate and high levels of online and international growth.
Research and Development
Product innovation and design is carried out in-house in Cornwall by a talented team of fashion and textile designers, buyers and garment technicians who are responsible for creating the distinctive Seasalt aesthetic and product range. Seasalt is well known for newness and innovation, and our teams are constantly striving to push boundaries, in response to customer insight, market research and trends. Seasalt introduces ten launches per year, recognised by our customers for sustainability, style and quality, with each launch supported by product and marketing campaigns.
Going Concern
The group’s business activities, together with the factors likely to affect its future development, financial position, exposures to different types of risk and financial risk management policies are described in the strategic report.
For the reasons set out in more detail in note 3.2 the directors believe that it is appropriate to prepare the accounts on a going concern basis.
Future Developments
The directors believe prospects for the company continue to be very strong with further potential leverage in its investment in people, systems and infrastructure to raise its national profile through increased online sales, store sales via existing stores and planned new stores, and expanded relationships with strategic third-party marketplaces. The company will also focus more resources on growing internationally through the same channels.
Seasalt Limited
Strategic Report for the 52 Week Period ended 27 January 2024
Section 172(1) statement
The company’s key strategic decisions taken during the period were to support the growth and long-term success of the business. The directors recognise their obligations to key stakeholders - customers, employees, communities, landlords, suppliers and shareholders - to operate a responsible business whilst promoting the long-term success of the company for the benefit of its members as a whole. As set out above at the start of this report, business dealings and interactions by the company and its representatives are grounded in long-held core values.
Details of how the directors have had regard to the matters set out in section 172(1) are given below:
• To support its strategic growth, the company considers a number of factors including commercial viability, environment and sustainability, and local demographics and geography;
• The company seeks to be a retailer of choice for consumers by continually looking for new and innovative ways to improve the customer experience in order to improve customer engagement with the brand;
• The company seeks to be an employer of choice for its employees, offering those employees opportunities for development and advancement and creating new roles in stores, distribution centres and head office locations;
• The company has a cross-functional team dedicated to improving the sustainability of the company’s operations and reduce the environmental impact across the business;
• The company continues to expand its programme of charitable giving and staff volunteering to ensure it is making a positive contribution to the communities in which it operates; and
• The company holds itself to high ethical standards, and also expects the same ethical standards from the people and organisations with which the company does business.
Approved and authorised by the
......................................... |
Seasalt Limited
Directors' Report for the 52 Week Period ended 27 January 2024
The directors present their report and the financial statements for the period from 29 January 2023 to 27 January 2024.
Directors of the company
The directors who held office during the period were as follows:
Information included in the Strategic Report
A fair review of the business, likely future developments, details of research and development activities and employment policies are set out in the strategic report, which further includes details of the principal and financial risks facing the group and the policies to address these risks.
Directors' liabilities
The company has taken out qualifying third party indemnity insurance in respect of the directors and officers of the company.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Independent Auditor
Under section 487(2) of the Companies Act 2006, PKF Francis Clark will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the financial statements with the registrar, whichever is earlier.
Approved and authorised by the
......................................... |
Seasalt Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
• |
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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Seasalt Limited
Independent Auditor's Report to the Members of Seasalt Limited
Opinion
We have audited the financial statements of Seasalt Limited (the 'company') for the period from 29 January 2023 to 27 January 2024, which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, 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 27 January 2024 and of its profit for the period 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 directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors 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.
Seasalt Limited
Independent Auditor's Report to the Members of Seasalt Limited
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 Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' 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 Directors' 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 directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 16, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor 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.
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 as follows:
Seasalt Limited
Independent Auditor's Report to the Members of Seasalt Limited
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company and management.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company at the planning stage of the audit. Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related company legislation) and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the Company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the company’s licence to operate. In making this assessment we determined that the most significant elements of legislation include, employment laws and regulations, and health and safety legislation.
We discussed with management how compliance with these laws and regulations is monitored and discussed the policies and procedures in place. As part of our planning procedures, we assessed the risk of any non-compliance with laws and regulations on the company’s ability to continue trading and the risk of material misstatement to the accounts.
We also evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements. The key incentive identified is to meet the expectations of the group and we determined that the principal risks were related to the overstatement of profit and the intention to show steady growth in the entity.
Based on this understanding, we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved the following: |
|
• |
Enquiries of management regarding their knowledge of any non-compliance with laws and regulations that could affect the financial statements. As part of these enquiries we also discussed with management whether there have been any known instances of fraud; |
• |
Reviewed legal and professional costs to identify any legal costs in respect of non-compliance with laws and regulations; |
• |
Considered the filings made at Companies House, and any omissions thereon; |
• |
Reviewed estimates and judgements made in the accounts for any indications of bias and challenged assumptions used by management in making the estimates; |
• |
Audited the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; and |
• |
Audited income with a multifaceted approach to assess whether income was complete, accurate and recognised in the correct period. We also assessed whether there was any evidence of fraud in revenue recognition. |
Seasalt Limited
Independent Auditor's Report to the Members of Seasalt Limited
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. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Finanical Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
......................................
Melville Building East
Unit 18
23 Royal William Yard
Devon
PL1 3GW
Seasalt Limited
Statement of Comprehensive Income
52 Week Period ended 27 January 2024
Note |
2024 |
2023 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit before non recurring expenses |
7,601,817 |
5,528,614 |
|
Non recurring administrative expenses |
- |
(1,614,505) |
|
Operating profit |
7,601,817 |
3,914,109 |
|
Gain/(loss) on financial assets at fair value through profit and loss |
|
( |
|
Other interest receivable and similar income |
|
- |
|
Interest payable and similar expenses |
( |
( |
|
Profit before tax |
|
|
|
Tax on profit |
( |
( |
|
Profit for the financial period |
|
|
The above results were derived from continuing operations.
Seasalt Limited
Balance Sheet
27 January 2024
Note |
2024 |
2023 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
|
|
|
Shareholder's funds |
|
|
Approved and authorised by the
......................................... |
Company Registration Number: 02259954
Seasalt Limited
Statement of Changes in Equity
52 Week Period ended 27 January 2024
For the 52 week period ended 27 January 2024
Share capital |
Profit and loss account |
Total |
|
At 29 January 2023 |
|
|
|
Profit for the period |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
Share based payment transactions |
- |
100,941 |
100,941 |
At 27 January 2024 |
|
|
|
For the 52 week period ended 28 January 2023
Share capital |
Profit and loss account |
Total |
|
At 30 January 2022 |
|
|
|
Profit for the period |
- |
|
|
Total comprehensive income |
- |
|
|
Share based payment transactions |
- |
(61,058) |
(61,058) |
At 28 January 2023 |
|
|
|
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
General information |
Seasalt Limited undertakes the design and sale of clothing, footwear and accessories via its own retail stores, a website and wholesale stockists.
The company is a private company limited by share capital, incorporated and domiciled in England and Wales.
The address of its registered office is:
Accounting policies |
Statement of compliance
The financial statements have been prepared in accordance with FRS102 - the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Companies Act 2006.
Basis of preparation
The financial statements have been prepared on the going concern basis, under the historical cost convention.
The preparation of financial statements in compliance with FRS102 requires the use of certain critical accounting estimates, and requires management to exercise judgement in applying the company's accounting policies. Further commentary is provided later in this note.
The functional currency of the company is considered to be pounds sterling because this is the currency of the primary economic environment in which the company operates.
Monetary accounts in these financial statements are rounded to the nearest pound.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Going concern
The financial statements have been prepared on a going concern basis. The directors consider this to be appropriate for the following reasons:
• The company continues to trade well despite the difficult external environment, posting excellent results for the period ended 27 Jan 24 (record EBITDA) and is ahead of plan for the period ended 25 Jan 2025;
• The company maintains a 3 year long-range plan and the latest version of this indicates that, as a result of the various initiatives in place to grow revenue, Seasalt should enjoy continued growth of both top and bottom line performance;
• The company has built up significant cash reserves in recent years and these are expected to be broadly maintained going forward, albeit fluctuating with the normal trade cycles each season;
• The company continues to invest in capital requirements as necessary to delivery the long-range plan; and
• The company has a comprehensive suite of risk registers which are up to date and subject to continuous ongoing review. The group has shown over recent years that it can identify issues early (covid, cost of living crisis, red sea shipping delays) and respond with agility to mitigate risks appropriately. The management team is very experienced at this.
Financial reporting standard 102 - Reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102:
• the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
• the requirements of Section 7 Statement of Cash Flows;
• the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
• the requirements of Section 11 Financial Instruments paragraphs 11.39 to 11.48A;
• the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.29; and
• the requirements of Section 33 Related Party Disclosures paragraph 33.7.
Consolidation
The company is a wholly owned subsidiary of Seasalt Holdings Limited and is included in the consolidated financial statements of Seasalt Holdings Limited, which are publicly available. Consequently, the company has taken advantage of the exemption from preparing consolidated financial statements under the terms of section 400 of the Companies Act 2006.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Turnover
Turnover recognised by the Company is in respect of goods and services supplied during the year, exclusive of Value Added Tax and trade discounts. Turnover is recognised on delivery when the risks and rewards are deemed to have transferred to the customer.
Loyalty card stamps issued by the Company when a customer makes a qualifying purchase of goods, are a separate performance obligation providing a material right to a future benefit. The amount allocated to loyalty card stamps, adjusted for expected redemption rates (breakage), is deferred from the revenue associated with the qualifying purchase as a contract liability within trade and other payables. Completed loyalty cards are exchanged for gift cards and revenue is recognised at the point that these are redeemed by the customer.
Intangible assets
Intangible assets are initially recognised at cost. After initial recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Amortisation is calculated, using the straight-line method, to allocate the amortisable amount of the assets over their estimated useful lives. This is estimated to be between 2 to 8 years. Amortisation is charged to ‘Administrative expenses’ in the Statement of comprehensive Income. Intangible assets are reviewed annually for impairment where things like technological advancement might indicate that the carrying value has changed significantly. The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted prospectively if appropriate.
Tangible assets
Tangible assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method .
The estimated useful lives range as follows:
Asset class |
Depreciation method and rate |
Land and buildings |
Over the life of the lease or useful economic life if shorter |
Motor vehicles |
4 - 5 years |
Furniture, fittings and equipment |
5 - 7 years |
Computer equipment |
3 - 5 years |
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'other operating income' in the statement of Comprehensive Income.
Operating leases
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the period of the lease.
Incentives received or paid to enter into an operating lease are credited or debited to the Statement of Comprehensive Income, to reduce or increase the rental expense, on a straight-line basis over the period of the lease.
Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment and are classified as fixed asset investments.
Inventory
Inventory is measured at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on an average cost basis and includes purchase price, including taxes, duties, transport and handling directly attributable to bring the inventory to its present location and condition. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, inventory is assessed for impairment. If inventory is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income
Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash at bank and in hand
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty
on notice of not more than 24 hours. Bank overdrafts, where applicable, are shown within borrowings in current liabilities.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Financial instruments
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Derivative financial instruments
Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Government grants
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the date of the transactions.
At each period end, foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses, resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the Statement of Comprehensive Income.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within administrative expenses.
Finance costs
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.
Defined contribution pension obligation
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid, the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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 statement of comprehensive income 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.
Interest income
Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Provisions for liabilities
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of 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 Balance Sheet date in the countries where the Company and the Group operates and generates income.
Deferred balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
• Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them, and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.
Deferred tax is recognised on all timing differences at the balance sheet date unless indicated below. Timing differences are differences between taxable profits and the results as stated in the profit and loss account and other comprehensive income. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Research and development
Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised as an expense except that expenditure incurred on development projects will be capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits in excess of the cost.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Share based payment transactions
Share-based payment arrangements in which the Company receives services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions.
The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related non-market performance conditions at the vesting date.
Key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Management have identified the areas below as the key judgements involving estimation uncertainty.
Key Judgements
Inventory
At each balance sheet date, inventory is assessed for impairment. If inventory is impaired, the carrying amount is reduced to its estimated selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income. The provision for impairment is shown within note 16 of these financial statements.
Useful economic lives of intangible and tangible assets
The annual amortisation / depreciation charge for intangible and tangible assets is sensitive to changes in the estimated economic lives of the assets, so these are re-assessed annually and amended when necessary to reflect current estimates. The amortisation charge and depreciation charge and the carrying values of the related assets are shown within note 13 and note 14 of these financial statements.
Impairment of debtors
The company makes an estimate for the recoverable value of trade and other debtors. When assessing impairment of debtors, management consider factors including the ageing profile of debtors and historical experience. See note 17 for the net carrying value of the debtors and associated impairment provision.
Loyalty card breakage
At each balance sheet date, the total value of all active loyalty card stamps are assessed, the company makes an estimate for expected redemption rates (breakage) and an adjustment is made to reduce the turnover. The breakage percentage is based on historical experience and is updated annually. The carrying value of the unredeemed loyalty cards at the period end is £691,514 (2023 - £576,744) and is shown within creditors in note 19 of these financial statements.
Returns provision
The company makes an estimate for the expected returns on sales. The returns provision is shown within short-term provisions in note 19 of these financial statements.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Turnover |
The analysis of the company's Turnover for the period from continuing operations is as follows:
2024 |
2023 |
|
Sale of goods |
|
|
The analysis of the company's Turnover for the period by market is as follows:
2024 |
2023 |
|
UK |
|
|
Europe |
|
|
Rest of world |
|
|
|
|
Other operating income |
The analysis of the company's other operating income for the period is as follows:
2024 |
2023 |
|
Miscellaneous other operating income |
|
|
Non recurring administrative expenses |
During the prior 52 week period, the company incurred one-off bonus costs and professional fees related to the ownership succession process, which was aborted mid-year. These non-recurring fees totalled £nil (2023 - £1,614,505).
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Operating profit |
Arrived at after charging/(crediting)
2024 |
2023 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange losses/(gains) |
|
( |
Loss on disposal of property, plant and equipment |
- |
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2024 |
2023 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the company during the period including directors, analysed by category was as follows:
2024 |
2023 |
|
Administration and support |
|
|
Sales |
|
|
Distribution |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the period was as follows:
2024 |
2023 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
52,475 |
36,393 |
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Auditor's remuneration |
2024 |
2023 |
|
Audit of the financial statements |
|
|
Other fees to auditors |
||
Taxation compliance services (amounts paid to prior year auditor) |
- |
|
All other assurance services (amounts paid to prior year auditor) |
|
|
All other non-audit services (amounts paid to current year auditor) |
|
- |
|
|
Other interest receivable and similar income |
2024 |
2023 |
|
Interest income on bank deposits |
|
- |
Interest payable and similar expenses |
2024 |
2023 |
|
Interest on bank borrowings |
|
|
Interest on other finance liabilities |
|
|
|
|
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Taxation |
Tax charged/(credited) in the statement of comprehensive income
2024 |
2023 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
|
( |
Double taxation relief |
( |
( |
1,702,144 |
285,650 |
|
Foreign tax |
|
|
Foreign tax adjustment to prior periods |
- |
|
32,350 |
45,166 |
|
Total current income tax |
|
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
( |
Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods |
37,094 |
(283,345) |
Total deferred taxation |
|
( |
Tax expense in the income statement |
|
|
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2024 |
2023 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Deferred tax expense relating to changes in tax rates or laws |
|
- |
Increase/(decrease) in UK and foreign current tax from unrecognised temporary difference from a prior period |
|
( |
Deferred tax expense/(credit) from unrecognised temporary difference from a prior period |
|
( |
Tax increase/(decrease) from effect of capital allowances and depreciation |
|
( |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
( |
( |
Total tax charge |
|
|
On 1 April 2023 there was an increase in the main rate of corporation tax to 25%, with the rate prior to that date being 19%. Consequently there has been an increase in the applicable tax rate to 24.03% (2023 - 19%), being the average rate for the year.
Deferred tax
Deferred tax assets and liabilities
2024 |
Liability |
Accelerated capital allowances |
|
Short term timing differences |
( |
|
2023 |
Liability |
Accelerated capital allowances |
|
Short term timing differences |
( |
|
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Intangible assets |
IT software |
|
Cost or valuation |
|
At 29 January 2023 |
|
Additions acquired separately |
|
At 27 January 2024 |
|
Amortisation |
|
At 29 January 2023 |
|
Amortisation charge |
|
At 27 January 2024 |
|
Carrying amount |
|
At 27 January 2024 |
|
At 28 January 2023 |
|
The software intangible assets include the company's ERP system, which is in the process of being upgraded.
The amortisation charge for these assets is recognised within administrative expenses in the statement of comprehensive income.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Tangible assets |
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Computer equipment |
Total |
|
Cost or valuation |
|||||
At 29 January 2023 |
|
|
|
|
|
Additions |
|
|
- |
|
|
Disposals |
( |
( |
( |
( |
( |
At 27 January 2024 |
|
|
|
|
|
Depreciation |
|||||
At 29 January 2023 |
|
|
|
|
|
Charge for the period |
|
|
|
|
|
Eliminated on disposal |
( |
( |
( |
( |
( |
At 27 January 2024 |
|
|
|
|
|
Carrying amount |
|||||
At 27 January 2024 |
|
|
|
|
|
At 28 January 2023 |
|
|
|
|
|
Included within the net book value of land and buildings above is £10,644,986 (2023 - £10,085,186) in respect of short leasehold land and buildings.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Investments |
2024 |
2023 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 29 January 2023 |
|
At 27 January 2024 |
|
Provision |
|
At 29 January 2023 |
- |
At 27 January 2024 |
- |
Carrying amount |
|
At 27 January 2024 |
|
At 28 January 2023 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2024 |
2023 |
|||
Subsidiary undertakings |
||||
|
Unit 8, Falmouth Business Park, Bickland Water Road, Falmouth, Cornwall, TR11 4SZ. UK |
|
|
|
The principal activity of General Clothing Stores Limited is that of a dormant company. The directors believe that the carrying value of the investment is supported by its underlying net assets.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Stocks |
2024 |
2023 |
|
Finished goods and goods for resale |
|
|
The difference between purchase price and their replacement cost is not material.
Inventories recognised in cost of sales during the period as an expense was £49,791,709 (2023 - £47,064,126). The inventories are stated after provision for impairment of £1,385,795 (2023 - £2,553,402).
Debtors |
Note |
2024 |
2023 |
|
Trade debtors |
|
|
|
Amounts owed by group undertakings |
|
|
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Accrued income |
|
- |
|
Income tax asset |
- |
|
|
|
|
Trade debtors are stated after provisions for impairment of £20,934 (2023: £10,849).
Cash and cash equivalents |
2024 |
2023 |
|
Cash on hand |
|
|
Cash at bank |
|
|
|
|
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Creditors |
Note |
2024 |
2023 |
|
Due within one year |
|||
Loans and borrowings |
|
|
|
Trade creditors |
|
|
|
Amounts due to group undertakings |
|
|
|
Social security and other taxes |
|
|
|
Outstanding defined contribution pension costs |
|
|
|
Other creditors |
|
|
|
Corporation tax |
238,709 |
- |
|
Lease liabilities |
1,810,906 |
1,850,505 |
|
Accruals and deferred income |
|
|
|
Financial instruments |
|
|
|
Short-term elements of provisions |
1,093,316 |
1,344,054 |
|
|
|
||
Due after one year |
|||
Loans and borrowings |
|
|
The short-term provision balance relates to an estimate for returns expected post year end.
2024 |
|
As at 29 January 2023 |
1,344,054 |
Utilised in year |
(1,344,054) |
Created in year |
1,093,316 |
At 27 January 2024 |
1,093,316 |
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Loans and borrowings |
2024 |
2023 |
|
Non-current loans and borrowings |
||
Bank borrowings |
|
- |
Other borrowings |
|
|
|
|
2024 |
2023 |
|
Current loans and borrowings |
||
Bank borrowings |
|
|
Other borrowings |
|
|
|
|
Bank loans and overdrafts are secured by debentures giving a fixed and floating charge of the assets of the Company and of Seasalt Holdings Limited, and by unlimited guarantees from Seasalt Holdings Limited.
Bank loans are repayable by instalments. Interest is charged at SONIA + 2.25%.
Other loans are repayable by instalments with interest charged at 10%. The full amount is repayable by 28 February 2027.
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
2024 |
2023 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the period was £5,069,890 (2023 - £4,649,060).
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Provisions for liabilities |
Deferred tax |
|
At 29 January 2023 |
|
Increase (decrease) in existing provisions |
|
At 27 January 2024 |
|
|
See note 12 for a more detailed breakdown of the deferred tax provision.
Share-based payments |
Seasalt Holdings Limited has issued shares to certain members of the Seasalt Limited senior management team in relation to their employment with the company which are treated as equity-settled share-based payments. 24,200 shares were issued in the year ended January 2024.
The annual charge related to share-based payments takes into account the likely time horizon over which the value for the shares may be realised by the relevant employees. The charge recognised for the year ended January 2024 was £100,941. Due to a change in the expected time horizon during the year ended January 2023, together with repurchase and cancellation of 1,468 shares, a credit of £61,058 was recognised for that year.
Share capital |
Allotted, called up and fully paid shares
2024 |
2023 |
|||
No. |
£ |
No. |
£ |
|
|
|
929,700 |
|
929,700 |
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Dividends |
Interim dividends paid
2024 |
2023 |
|||
Interim dividend of £ |
|
- |
||
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £
Financial instruments |
Categorisation of financial instruments
27 January 2024 |
28 January 2023 |
|
Financial liabilities measured at fair value through profit or loss |
|
|
Financial liabilities measured at fair value through profit or loss comprise foreign exchange forward contracts.
Foreign currency risk
The Company imports most of its stock as finished goods from overseas, some of which are settled in US Dollars or Euros. The company manages the risk of foreign exchange fluctuations in relation to US dollars through foreign exchange contracts.
The total purchases in US Dollars for each season are estimated in advance. The Company enters into forward currency contracts allowing the purchase of that quantity of US Dollars, between a range of dates, at a fixed USD / GBP rate. As payments for stock are made, the currency is drawn down from those contracts to cover the requirement. Although, at the time of entering into the contracts, fixed orders have not been placed for stock, the expected profile can be predicted with a high degree of accuracy.
Any unused currency contracts are valued at each year end in accordance with fair value accounting rules. The unrealised gain or loss is disclosed in the Company's balance sheet as a financial asset or liability and any changes in valuation are reported through the profit and loss account.
Seasalt Limited
Notes to the Financial Statements
52 Week Period ended 27 January 2024
Related party transactions |
The company discloses transactions with related parties which are not wholly owned with the same Group. It does not disclose transactions with members of the same Group that are wholly owned.
Key management personnel
Key management personnel is comprised of the legal directors.
Transactions with directors |
Rents of £353,575 (2023 - £448,649) were paid to the Chadwick SSAS of which Mr L G Chadwick (Director), Mr D A Chadwick (Director) and Mr N M Chadwick (Director) are Trustees and beneficiaries.
Rents of £nil (2023 - £20,000) were paid to Chad & Co. Ltd of which Mr L G Chadwick (Director), Mr D A Chadwick (Director) and Mr N M Chadwick (Director) are directors and shareholders.
Summary of transactions with other related parties
Remuneration of £116,044 (2023 - £115,813) was paid to relatives of the directors and group shareholders for employment services to the company.
Ultimate parent undertaking and controlling party |
The company's immediate and ultimate parent is
The directors, L G Chadwick, D A Chadwick, and N M Chadwick consider themselves to be the ultimate controlling party by virtue of them being trustees of the Trusts which hold the majority of the ultimate parent company's issued share capital, in addition to the share capital of that company which they own directly.
The parent of the largest group in which these financial statements are consolidated is
The address of Seasalt Holdings Limited is: