The directors present the strategic report for the year ended 30 November 2023.
The group’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 group operates internationally through a number of distribution channels as well as across the UK through retail vape shops, distributors, supermarkets, convenience stores and through its own branded retail network and several dedicated e-commerce platforms that service consumers directly.
Through a series of strategic acquisitions made, the group has been able to expand its channel breadth and expand its product portfolio. Having fully integrated these acquisitions and delivering revenue synergy opportunities, the current year has shown exceptional growth in financial performance. This is underpinned by the group's high brand recognition and strong long-term relationships which have yielded new opportunities across its core markets, coupled with the continued growth of single use vape products.
Flavour Warehouse 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’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. The last financial year benefited from our investment in robotics enabling further improvements across warehousing and fulfilment to expand the customer proposition, improved picking accuracy and further capacity for growth. Additionally, our continued focus and investment in people, knowledge and skills has seen a continued strengthening of our leadership team that delivers the required level of skill and diligence to ensure the company has a good balance between corporate governance and entrepreneurial flair when executing its growth plan. The team has many years of experience in successfully delivering excellence in a fast growth sector, many of whom have been developed and nurtured within Flavour Warehouse Group. As a result, the company is well positioned and confident in its growth prospects and trajectory and has continued to make significant investment in both physical infrastructure, fulfilment, operating technologies and in people, knowledge and skills.
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.
Governance and control remain at the heart of the group's management and the group has monthly meetings attended by the directors 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 group and company are 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.
The group and company monitor their performance by reference to financial key indicators including
turnover,
gross profit, and
net profit.
Turnover increased by 21.3% during the year to £169.9m. The gross profit margin was 25.7% (2022 – 33.4%) while the net profit margin decreased from 20.2% to 14.7% as the company invested in its workforce and infrastructure.
Flavour Warehouse actively encourages the involvement of all employees through staff meetings and forums. Communications 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 358, up from 281 in 2022, with marked improvements in both retention and length of service.
The directors provide the following statement pursuant to the Companies Act 2006 (as amended by Companies
(Miscellaneous Reporting) Regulations 2018) (the “Act”) to describe how they have acted in accordance with
his duty under s.172 of the Act to promote the success of the Company for the benefit of its member(s) as a
whole, and in so doing, how they have had regard to those factors set out in 172 (1) (a) to (f) of the Act during the
financial year.
Furthermore, in compliance with the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018), the directors
provide the statement which follows to describe how they have engaged with employees, and how they have had
regard to employee interests and the need to foster the company’s business relationships with suppliers, customers and others, an in each case the effect of that regard, including on the principal decisions taken by the company and the group during the financial year.
Section 172 requires the directors to have regard to the following matters, among others, when discharging their duty:
• the likely consequences of any decision in the long term;
• the interests of the company’s and group's employees;
• the need to foster the company’s business relationships with suppliers, customers and others; the impact
of the company’s and group's operations on the community and the environment;
• the desirability of the company and group maintaining a reputation for high standards of business conduct; and
• the need to act fairly with members of the company and group.
The directors are responsible for managing the affairs of the Company and Group to achieve its long-term prosperity by making important decisions, monitoring the underlying performance of the Company and Group, as well as being a means for establishing ethical standards. Understanding the interests of key stakeholders is an important part of the Company’s and Group's strategy and helps inform the directors' decision making throughout the year
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 November 2023.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £3,000,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group invests in research and development in order to remain at the forefront of the industry both in terms of flavours offered to the consumer and the design, testing and manufacturing process.
The group provides regular updates along with a quarterly newsletter to ensure all colleagues are provided with information about the group. The group also operates a forum in which colleagues are encouraged to present their suggestions and view of the group's performance.
The director plans to develop the activities of the group taking into account the general economic conditions that are likely to exist in the coming year recognising that safety, quality, customer experience and service are key to competitiveness.
The greenhouse gas emissions and energy data for the year have been prepared in line with the UK Government's Environmental Reporting Guidelines and in accordance with the greenhouse gas conversion factors for 2023 issued by HM Government.
The group's energy consumption includes premises consumption of gas and electricity along with fuel consumed by company employees on business.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m turnover, the recommended ratio for the sector.
The group has installed LED lighting at its premises along with motion-activated sensor lights to reduce electricity usage.
The Group is committed to strengthening the culture of anticipation and prevention so it can better manage risks in order to protect its colleagues, partners, suppliers, customers and all communities its activities impact on. The internal Quality Health and Safety department has seen further investment to support its broad remit across the Group. The team work closely with the Group Board in identifying and implementing appropriate strategies to mitigate and manage risk, as well as considering implications in all operational decision making
We have audited the financial statements of Flavour Warehouse Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and 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).
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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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:
The nature of the industry and the group and company’s control environment.
Results of our enquiries of management.
The group and company’s procedures and controls on compliance with laws and regulations and the risks of fraud.
Discussions among the audit engagement team concerning potential indicators of fraud.
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.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £8,545,368 (2022 - £807,720 profit).
Flavour Warehouse Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Global Way, Darwen, Lancashire, BB3 0RW.
The group consists of Flavour Warehouse Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The consolidated financial statements incorporate those of Flavour Warehouse Holdings Limited and all of its subsidiaries except Operation Vape GmbH (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). The results for Operation Vape GmbH are immaterial to consolidate into the group.
All financial statements are made up to 30 November 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group 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).
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors and loans from fellow group companies are recognised at transaction price.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The directors have determined that the expected useful life of the goodwill is 10 years and, as a result, the cost of goodwill is being amortised over this period.
Investment in subsidiary undertakings is initially measured at cost and subsequently at cost less any impairment losses. As such, management are required to perform an impairment review on their investment portfolio to ascertain whether any impairment losses have occurred. If any impairment exists, quantifying such an impairment may require judgements to be made.
An analysis of the group's turnover is as follows:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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).
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
During the year the company disposed of its properties to a subsidiary company at fair value in exchange for shares in the subsidiary company issued at a premium. The subsidiary concerned was subsequently demerged from the group via a capital reduction demerger.
Details of the company's subsidiaries at 30 November 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The following subsidiary is exempt from audit under section 479A of the Companies Act 2006 as the parent company has given a guarantee in respect of all outstanding liabilities at the subsidiary's financial year end:
Premier Retail Holdings Limited Company number 12737220
Details of joint ventures at 30 November 2023 are as follows:
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Ordinary AF shares carry the following rights:
a) each share held carries one vote.
b) the right to participate equally in respect of distributions and in respect of dividends.
c) as respects capital (including on a winding up) each share bares the right to participate equally.
d) the shares are non-redeemable.
Ordinary AF3 shares carry the following rights:
a) the shares are non-voting.
b) no entitlement to distributions or dividends.
c) as respects capital (including on a winding up), each share bears the right to return £1.00 to the holder and to participate equally above the hurdle.
d) the shares are non-redeemable.
Ordinary BF1 shares carry the following rights:
a) the shares are non-voting.
b) the right to participate equally in respect of distributions and in respect of dividends.
c) as respects capital (including on a winding up) each share bares the right to participate equally.
d) the shares are non-redeemable.
Ordinary BF2 shares carry the following rights:
a) each share held carries one vote.
b) no entitlement to distributions or dividends.
c) as respects capital (including on a winding up) each share bares the right to return £0.50 to the holder.
d) the shares are non-redeemable.
Ordinary BF3 shares carry the following rights:
a) the shares are non-voting.
b) no entitlement to distributions or dividends.
c) as respects capital (including on a winding up), each share bears the right to return £0.50 to the holder and to participate equally above the hurdle.
d) the shares are non-redeemable.
Ordinary BF4 shares carry the following rights:
a) the shares are non-voting.
b) no entitlement to distributions or dividends.
c) as respects capital (including on a winding up) each share bares the right to return £0.50 to the holder.
d) the shares are non-redeemable.
Ordinary CF shares carry the following rights:
a) the shares are non-voting.
b) no entitlement to dividends or distributions
c) as respects capital (including on a winding up), each share bears the right to return £0.50 to the holder and to participate equally above the hurdle.
d) the shares are non-redeemable.
During the year, the company made a number of changes within its share capital, as set out below;
1) On 12 January 2023, the company re-purchased 4,000 £0.01 Ordinary 'C' shares and then subsequently cancelled them.
2) On 13 April 2023, the company re-purchased a further 10,000 £0.01 Ordinary 'C' shares and then subsequently cancelled them.
3) On 16 August 2023, the company:
redesignated 4,500,000 £1.00 Ordinary 'A' shares as 4,500,000 £0.99 Ordinary 'AP' shares and 4,500,000 £0.01 Ordinary 'AF' shares
redesignated 500,000 £1.00 Ordinary 'A3' shares as 500,000 £0.99 Ordinary 'AP3' shares and 500,000 £0.01 Ordinary 'AF3' shares
redesignated 1,837,800 £0.50 Ordinary 'B1' shares as 1,837,800 £0.495 Ordinary 'BP1' shares and 1,837,800 £0.005 Ordinary 'BF1' shares
redesignated 1,421,100 £0.50 Ordinary 'B2' shares as 1,421,100 £0.495 Ordinary 'BP2' shares and 1,421,100 £0.005 Ordinary 'BF2' shares
redesignated 204,200 £0.50 Ordinary 'B3' shares as 204,200 £0.495 Ordinary 'BP3' shares and 204,200 £0.005 Ordinary 'BF3' shares
redesignated 157,900 £0.50 Ordinary 'B4' shares as 157,900 £0.495 Ordinary 'BP4' shares and 157,900 £0.005 Ordinary 'BF4' shares
redesignated 84,736 £0.01 Ordinary 'C' shares as 84,736 £0.0.001 Ordinary 'CP' shares and 84,736 £0.009 Ordinary 'CF' shares
4) On 17 August 2023, the company issued bonus shares on the 'P' designated ordinary shares. The following shares were issued out of 'other reserves':
1,429,941 £0.99 Ordinary 'AP' shares
158,882 £0.99 Ordinary 'AP3' shares
583,988 £0.495 Ordinary 'BP1' shares
451,575 £0.495 Ordinary 'BP2' shares
64,888 £0.495 Ordinary 'BP3' shares
50,175 £0.495 Ordinary 'BP4' shares
26,926 £0.001 Ordinary 'CP' shares
5) On 22 August 2023, the company entered into a capital reduction of all of its 'P' designated shares in their entirety.
During a prior year, the group acquired the entire share capital of Premier Retail Holdings Limited. As part of the transaction structure, the company paid an initial consideration in cash with deferred consideration becoming payable by the group during the 2024 financial reporting period.
The deferred consideration is based upon the future financial performance of the business acquired. A liability of £4.9m has been recognised at the balance sheet date, being the final amount of deferred consideration which will become payable during the next financial period.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
On 6 December 2023, the company:
redesignated 4,500,000 £0.01 Ordinary 'AF' shares to 4,500,000 Ordinary 'A' shares
redesignated 500,000 £0.01 Ordinary 'AF3' shares to 500,000 Ordinary 'A3' shares
redesignated 1,837,800 £0.005 Ordinary 'BF1' shares to 1,837,800 £0.005 Ordinary 'B1' shares
redesignated 1,421,100 £0.005 Ordinary 'BF2' shares to 1,421,100 £0.005 Ordinary 'B2' shares
redesignated 204,200 £0.005 Ordinary 'BF3' shares to 204,200 £0.005 Ordinary 'B3' shares
redesignated 157,900 £0.005 Ordinary 'BF4' shares to 157,900 £0.005 Ordinary 'B4' shares
redesignated 84,736 £0.009 Ordinary 'C' shares to 84,736 £0.005 Ordinary 'C' shares
issued 100,000 fully paid up £0.001 Ordinary 'D' shares through the capitalisation of retained profits
issued 100,000 fully paid up £0.001 Ordinary 'E' shares through the capitalisation of retained profits
The company has taken advantage of the exemption from the requirement to disclose related party transactions between 100% group companies.
During the year, the company transferred its freehold property at its fair value of £8,885,000 to a subsidiary company in exchange for shares in the subsidiary company issued at a premium . The profit on disposal was, as a result, recognised through other comprehensive income as unrealised profits. The company elected to utilise some of these unrealised profits to issue the bonus shares issued in August 2023.
The gains held within 'other reserves' as at the balance sheet date are not distributable.
On 13 July 2023, PN Property Investments Limited was incorporated with 100% of the issued share capital being held by the group.
The company subsequently disposed of its properties to PN Property Investments Limited at fair value in exchange for additional shares being issued in the subsidiary at a premium.
Subsequently, on 15 August 2023, PN Property Investments Limited was demerged from the group via a capital reduction demerger.