Company registration number 07898106 (England and Wales)
VAPOURIZ LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
VAPOURIZ LIMITED
COMPANY INFORMATION
Directors
Mr P E Boyle
Ms S Barker
(Appointed 3 August 2023)
Company number
07898106
Registered office
Global Way
Darwen
Lancashire
BB3 0RW
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
7A Henley Business Park
Normandy
Guildford
Surrey
GU3 2DX
VAPOURIZ LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
VAPOURIZ LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the year ended 30 November 2023.

Review of the business

The company’s activities continue to be the design, manufacture and distribution of e-liquids, hardware and related reduced-harm products for adult smokers looking to quit or reduce smoking. The company operates through a number of distribution channels as well as across the UK through retail vape shops, supermarkets, convenience stores and through its own branded retail network and dedicated e-commerce platforms that service consumers directly.

Vapouriz is part of the Flavour Warehouse group, which remains one of the largest independent businesses in the E-Liquid industry and Its flagship brand, Vampire Vape, continues to deliver strong performance and remains one of the top selling brands in the UK. Flavour Warehouse Limited’s long-term strategic objective is to be “the World’s most trusted vaping brand”.

Management has continued to invest in its operations to improve and streamline processes across the organisation, as well as continued investment in both physical infrastructure, fulfilment, operating technologies and in people, knowledge and skills. As a result, the company is well positioned and confident in its growth prospects and trajectory.

Over the last year, the influence of bodies such as Public Health England, who recognise vaping as a safer alternative to smoking and as a means to stop smoking, has remained positive. However the government carried out a consultation at the end of 2023 with a view to restricting youth access to these products and to minimise the environmental impact of single use products. In January 2024 the government announced its intention to ban the use of single use vapes and plans for further consultation on the regulation of vape flavours, packaging and point of sale. Flavour Warehouse has always been a strong advocate for responsible vaping and is dedicated to preventing underage access to vape products. Having already implemented strict age verification process across its B2C operations, we remain focused on ensuring the highest standards of quality and responsibility in our products and services to ensure that adult smokers continue to have access to the right products as part of the smoking cessation journey.

Principal risks and uncertainties

Governance and control remain at the heart of the company's management and the company has monthly meetings attended by the Director of the company and the senior leadership team. At these meetings risks, uncertainties and opportunities are all discussed with plans implemented to mitigate and manage areas of risk and opportunity. .

 

Whilst competitive and customer risk is always present, the market has seen further consolidation. We continue to invest in our account management teams and our brand Vampire Vape is recognised as one of the leading brands in the product range, which plays significantly to our strengths.

 

The company is exposed to the risk of exchange rate movements and occasionally uses hedging products to reduce some of this risk.

 

Legislative risks – E-cigarettes are regulated under the UK Tobacco and Related Products Regulations 2016 (TRPR). E-Cigarettes and e-liquids are subject to a notification scheme for which the Medicines and Healthcare products Regulatory Agency (MHRA) is the competent authority in the UK. Management take all necessary steps to ensure that all requirements under these regulations are met and that appropriate processes and controls exist within the business. We have continued to make investments in this area, proactively engaging in positive steps to support positive regulation.

 

The recent government announcement on the ban of single use vape products and proposed regulation marks a significant shift in our industry. The details and timelines of these new regulations are not fully defined, but we expect implementation towards the end of 2024 or early 2025. Our focus remains on providing high-quality vaping products for adult smokers looking for safer alternatives and are confident in being able to navigate these changes and continue to support our customers through a range of responsible vaping products.

VAPOURIZ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Key performance indicators

The company monitors its performance by reference to financial key indicators including:

Turnover,

Gross profit, and

Net profit.

Turnover increased by 57% during the year to £37.1m. The gross profit margin was 26% (2022 – 28.9%) while the net profit margin decreased from 18% to 14.6% as the company invested in its workforce and infrastructure.

Flavour Warehouse actively encourages the involvement of all employees through staff meetings and forums. Communication on all matters of importance to employees are made through a dedicated staff portal, newsletters and by encouraging engagement through collaborative events throughout the year. Staff numbers rose in the year to 113, up from 109 in 2022, with marked improvements in both retention and length of service.

 

On behalf of the board

.............................................
Mr P E Boyle
Director
Date: .............................................
VAPOURIZ LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 30 November 2023.

Principal activities

The principal activity of the company continued to be that of the manufacture and distribution of e-liquids.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £4,000,000. The directors do not recommend payment of a final dividend.

Directors

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

Mr P E Boyle
Ms S Barker
(Appointed 3 August 2023)
Energy and carbon report

As the company is a wholly-owned subsidiary of Flavour Warehouse Holdings Ltd it is not required to report on its emissions, energy consumption or energy efficiency activities. These are included in the disclosures contained within the group director's report of the parent company.

Statement of directors' responsibilities

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

 

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

 

 

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

Statement of disclosure to auditor

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

Medium-sized companies exemption

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

VAPOURIZ LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -
On behalf of the board
Mr P E Boyle
Director
28 August 2024
VAPOURIZ LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VAPOURIZ LIMITED
- 5 -
Opinion

We have audited the financial statements of Vapouriz Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

VAPOURIZ LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VAPOURIZ LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

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

In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:

We are also required to perform specific procedures to respond to the risk of management override.

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

VAPOURIZ LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VAPOURIZ LIMITED
- 7 -

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.

James King (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
28 August 2024
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
VAPOURIZ LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
2
37,167,226
23,552,726
Cost of sales
(27,507,553)
(16,746,106)
Gross profit
9,659,673
6,806,620
Administrative expenses
(4,239,024)
(4,500,593)
Other operating expenses
-
0
(20,000)
Operating profit
3
5,420,649
2,286,027
Interest receivable and similar income
5
20,657
2,586,494
Interest payable and similar expenses
6
(229)
(3,521)
Amounts written off investments
7
-
(633,993)
Profit before taxation
5,441,077
4,235,007
Tax on profit
8
(1,293,478)
(510,469)
Profit for the financial year
4,147,599
3,724,538

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

VAPOURIZ LIMITED
BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
31,177
49,760
Tangible assets
11
880,809
815,630
Investments
12
2,001
2,001
913,987
867,391
Current assets
Stocks
14
3,137,136
3,353,499
Debtors
15
3,549,364
1,828,819
Cash at bank and in hand
2,561,462
6,961,396
9,247,962
12,143,714
Creditors: amounts falling due within one year
16
(7,244,517)
(10,293,408)
Net current assets
2,003,445
1,850,306
Total assets less current liabilities
2,917,432
2,717,697
Provisions for liabilities
Deferred tax liability
18
110,599
58,463
(110,599)
(58,463)
Net assets
2,806,833
2,659,234
Capital and reserves
Called up share capital
20
1,072
1,072
Share premium account
47,056
47,056
Profit and loss reserves
2,758,705
2,611,106
Total equity
2,806,833
2,659,234

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

The financial statements were approved by the board of directors and authorised for issue on 28 August 2024 and are signed on its behalf by:
Mr P E Boyle
Director
Company registration number 07898106 (England and Wales)
VAPOURIZ LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
1,072
47,056
886,568
934,696
Year ended 30 November 2022:
Profit and total comprehensive income
-
-
3,724,538
3,724,538
Dividends
9
-
-
(2,000,000)
(2,000,000)
Balance at 30 November 2022
1,072
47,056
2,611,106
2,659,234
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
4,147,599
4,147,599
Dividends
9
-
-
(4,000,000)
(4,000,000)
Balance at 30 November 2023
1,072
47,056
2,758,705
2,806,833
VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
1
Accounting policies
Company information

Vapouriz Limited is a private company limited by shares incorporated in England and Wales. The registered office is Global Way, Darwen, Lancashire, BB3 0RW.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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

 

 

The financial statements of the company are consolidated in the financial statements of Flavour Warehouse Holdings Limited, the company's ultimate parent company. These consolidated financial statements are available from its registered office.

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

1.2
Going concern

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

1.3
Turnover

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

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

1.4
Intangible fixed assets other than goodwill

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

 

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

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 12 -

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

Software
25% straight line
1.5
Tangible fixed assets

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

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

Leasehold land and buildings
10% straight line
Plant and equipment
25% straight line
Fixtures and fittings
50%, 25% or 10% straight line
Computers
33% straight line
Motor vehicles
25% straight line

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

1.6
Fixed asset investments

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

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

1.7
Impairment of fixed assets

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

1.8
Stocks

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

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

1.9
Cash and cash equivalents

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

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.10
Financial instruments

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

 

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

 

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

Derecognition of financial assets

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

Classification of financial liabilities

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

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities

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

 

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

 

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

Other financial liabilities

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

 

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

1.11
Equity instruments

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

1.12
Taxation

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

Current tax

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

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.13
Employee benefits

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

 

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

1.14
Retirement benefits

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

1.15
Leases

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 leases asset are consumed.

1.16
Foreign exchange

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

2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Principal activity
37,167,226
23,552,726
2023
2022
£
£
Turnover analysed by geographical market
UK
37,063,150
23,456,296
Europe
104,076
88,676
Rest of world
-
7,754
37,167,226
23,552,726
2023
2022
£
£
Other revenue
Interest income
20,657
1,870
Dividends received
-
2,584,624
VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
15,680
13,150
Depreciation of owned tangible fixed assets
273,813
213,556
Depreciation of tangible fixed assets held under finance leases
-
9,025
Loss/(profit) on disposal of tangible fixed assets
2,280
(13,901)
Amortisation of intangible assets
26,172
40,247
Operating lease charges
621,443
540,213
4
Employees

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

2023
2022
Number
Number
113
109

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,909,678
2,964,335
Social security costs
273,188
264,449
Pension costs
194,967
158,419
3,377,833
3,387,203
5
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
1,870
Other interest income
20,657
-
0
Total interest revenue
20,657
1,870
Income from fixed asset investments
Income from shares in group undertakings
-
0
2,584,624
Total income
20,657
2,586,494
VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 17 -
6
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
229
3,521
7
Amounts written off investments
2023
2022
£
£
Amounts written back to/(written off) current loans
-
(633,993)
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,231,790
403,315
Adjustments in respect of prior periods
9,552
49,717
Total current tax
1,241,342
453,032
Deferred tax
Origination and reversal of timing differences
52,136
57,437
Total tax charge
1,293,478
510,469

In 2021, an increase in the corporation tax rate to 25% with effect from 1 April 2023 was substantively enacted. The 23.01% rate used below reflects 8 months at this new rate and 4 months of the previous rate of 19%. The 25% rate is used to measure UK deferred taxes in 2023 (and in 2022 to the extent the related timing differences were expected to reverse after 1 April 2023).

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
8
Taxation
(Continued)
- 18 -

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

2023
2022
£
£
Profit before taxation
5,441,077
4,235,007
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
1,252,044
804,651
Tax effect of expenses that are not deductible in determining taxable profit
20,489
146,926
Permanent capital allowances in excess of depreciation
11,393
-
0
Other permanent differences
-
0
254
Under/(over) provided in prior years
9,552
49,717
Dividend income
-
0
(491,079)
Taxation charge for the year
1,293,478
510,469
9
Dividends
2023
2022
£
£
Interim paid
4,000,000
2,000,000
10
Intangible fixed assets
Software
£
Cost
At 1 December 2022
133,040
Additions
7,589
Disposals
(46,534)
At 30 November 2023
94,095
Amortisation and impairment
At 1 December 2022
83,280
Amortisation charged for the year
26,172
Disposals
(46,534)
At 30 November 2023
62,918
Carrying amount
At 30 November 2023
31,177
At 30 November 2022
49,760
VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 December 2022
717,504
34,359
608,696
52,747
15,104
1,428,410
Additions
-
0
1,495
310,164
32,473
14,995
359,127
Disposals
(126)
-
0
(108,267)
(30,968)
(7,083)
(146,444)
At 30 November 2023
717,378
35,854
810,593
54,252
23,016
1,641,093
Depreciation and impairment
At 1 December 2022
313,034
9,149
244,538
35,824
10,235
612,780
Depreciation charged in the year
83,485
8,807
163,100
17,518
903
273,813
Eliminated in respect of disposals
(126)
-
0
(92,411)
(30,968)
(2,804)
(126,309)
At 30 November 2023
396,393
17,956
315,227
22,374
8,334
760,284
Carrying amount
At 30 November 2023
320,985
17,898
495,366
31,878
14,682
880,809
At 30 November 2022
404,470
25,210
364,158
16,923
4,869
815,630

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Plant and equipment
-
0
27,074
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
2,001
2,001

 

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
13
Subsidiaries

Details of the company's subsidiaries at 30 November 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Vapouriz Labs Limited
1
Ordinary
100.00
Vapestore Retail Limited
1
Ordinary
100.00
Vapestars Limited
1
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
Global Way, Darwen, Lancashire, BB3 0RW
14
Stocks
2023
2022
£
£
Work in progress
-
207,728
Finished goods and goods for resale
3,137,136
3,145,771
3,137,136
3,353,499
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,533,295
1,231,496
Corporation tax recoverable
563,779
358,803
Other debtors
27,000
27,001
Prepayments and accrued income
425,290
211,519
3,549,364
1,828,819
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
-
0
13,309
Trade creditors
264,000
149,098
Amounts owed to group undertakings
6,329,345
9,730,609
Taxation and social security
501,645
258,970
Other creditors
-
0
10,000
Accruals and deferred income
149,527
131,422
7,244,517
10,293,408
VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
-
0
13,309
18
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
112,701
69,552
Retirement benefit obligations
(2,102)
-
Provisions
-
(11,089)
110,599
58,463
2023
Movements in the year:
£
Liability at 1 December 2022
58,463
Charge to profit or loss
52,136
Liability at 30 November 2023
110,599

The deferred tax liability set out above is expected to reverse within 3 years and relates to accelerated capital allowances that are expected to mature within the same period.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
194,967
158,419

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

VAPOURIZ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,072
1,072
1,072
1,072
21
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
611,164
573,771
Between two and five years
1,454,260
1,759,908
In over five years
-
0
18,003
2,065,424
2,351,682
22
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
193,498
-
23
Related party transactions

The company has taken advantage of the exemption from the requirement to disclose related party transactions between 100% group companies.

24
Ultimate controlling party

The ultimate controlling party is Mr P Boyle by virtue of his majority shareholding in the ultimate parent company, Flavour Warehouse Holdings Limited.

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