Company registration number 09437639 (England and Wales)
FLAVOUR WAREHOUSE HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
FLAVOUR WAREHOUSE HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Mr P Boyle
Ms S Barker
(Appointed 6 March 2024)
Company number
09437639
Registered office
Global Way
Darwen
Lancashire
BB3 0RW
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
Global Way
Darwen
Lancashire
BB3 0RW
FLAVOUR WAREHOUSE HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12 - 13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the financial statements
18 - 39
FLAVOUR WAREHOUSE HOLDINGS 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 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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Principal risks and uncertainties

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.

Key performance indicators

The group and company monitor their performance by reference to financial key indicators including

 

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.

 

FLAVOUR WAREHOUSE HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
Section 172(1) Statement

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

Mr P Boyle
Director
28 August 2024
FLAVOUR WAREHOUSE HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -

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

Principal activities

The principal activity of the group continued to be that of the manufacture and sale of e-cigarette fluids and the sale of associated devices and accessories.

 

The principal activity of the company is that of a holding company.

Results and dividends

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.

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 Boyle
Ms S Barker
(Appointed 6 March 2024)
Research and development

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.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

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.

Future developments

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.

Energy and carbon report

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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -
2023
Energy consumption
kWh
Aggregate of energy consumption in the year
1,932,930
2023
Emissions of CO2 equivalent
metric tonnes
Scope 1 - direct emissions
- Gas combustion
176.18
- Fuel consumed for owned transport
-
176.18
Scope 2 - indirect emissions
- Electricity purchased
200.37
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
24.13
Total gross emissions
400.68
Intensity ratio
Tonnes CO2e per £1m turnover
2.44
Quantification and reporting methodology
Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m turnover, the recommended ratio for the sector.

Measures taken to improve energy efficiency

The group has installed LED lighting at its premises along with motion-activated sensor lights to reduce electricity usage.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 6 -
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 group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and 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 auditor of the company 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 auditor of the company is aware of that information.

Health and safety

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

On behalf of the board
Mr P Boyle
Director
28 August 2024
FLAVOUR WAREHOUSE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FLAVOUR WAREHOUSE HOLDINGS LIMITED
- 7 -
Opinion

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).

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 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:

FLAVOUR WAREHOUSE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FLAVOUR WAREHOUSE HOLDINGS LIMITED
- 8 -
Matters on which we are required to report by exception

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:

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 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.

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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FLAVOUR WAREHOUSE HOLDINGS LIMITED
- 9 -

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
FLAVOUR WAREHOUSE HOLDINGS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
169,881,051
140,104,646
Cost of sales
(126,175,485)
(93,377,252)
Gross profit
43,705,566
46,727,394
Administrative expenses
(19,891,159)
(18,635,066)
Other operating income
133,645
36,039
Operating profit
5
23,948,052
28,128,367
Interest receivable and similar income
7
1,066,527
140,334
Interest payable and similar expenses
9
(2,913)
(9,792)
Amounts written off investments
11
3,155
(21,557)
Profit before taxation
25,014,821
28,237,352
Tax on profit
10
(6,816,055)
(6,080,833)
Profit for the financial year
18,198,766
22,156,519
Profit for the financial year is attributable to:
- Owners of the parent company
18,044,737
21,835,635
- Non-controlling interests
154,029
320,884
18,198,766
22,156,519

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

FLAVOUR WAREHOUSE HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
2023
2022
£
£
Profit for the year
18,198,766
22,156,519
Other comprehensive income
Profit on sale of freehold property
3,055,231
-
0
Total comprehensive income for the year
21,253,997
22,156,519
Total comprehensive income for the year is attributable to:
- Owners of the parent company
21,099,968
21,835,635
- Non-controlling interests
154,029
320,884
21,253,997
22,156,519
FLAVOUR WAREHOUSE HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
13
16,490,929
19,894,638
Negative goodwill
13
(90,820)
(103,347)
Net goodwill
16,400,109
19,791,291
Other intangible assets
13
193,661
217,636
Total intangible assets
16,593,770
20,008,927
Tangible assets
14
4,128,645
9,797,499
Investments
15
2,500
2,500
20,724,915
29,808,926
Current assets
Stocks
18
24,871,620
25,254,202
Debtors
19
29,245,344
25,445,079
Cash at bank and in hand
31,438,918
30,324,763
85,555,882
81,024,044
Creditors: amounts falling due within one year
20
(15,810,256)
(29,842,221)
Net current assets
69,745,626
51,181,823
Total assets less current liabilities
90,470,541
80,990,749
Provisions for liabilities
Deferred tax liability
22
800,181
689,245
(800,181)
(689,245)
Net assets
89,670,360
80,301,504
Capital and reserves
Called up share capital
24
68,868
6,811,527
Capital redemption reserve
3,189,680
3,189,500
Other reserves
912,709
-
0
Profit and loss reserves
84,283,482
69,238,885
Equity attributable to owners of the parent company
88,454,739
79,239,912
Non-controlling interests
1,215,621
1,061,592
89,670,360
80,301,504
FLAVOUR WAREHOUSE HOLDINGS LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
30 NOVEMBER 2023
30 November 2023
- 13 -
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:
28 August 2024
Mr P Boyle
Director
Company registration number 09437639 (England and Wales)
FLAVOUR WAREHOUSE HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 14 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
13
162,395
165,828
Tangible assets
14
-
0
5,898,812
Investments
15
10,000,002
10,000,002
10,162,397
16,064,642
Current assets
Debtors
19
8,175,793
18,876,596
Cash at bank and in hand
24,016,654
10,709,111
32,192,447
29,585,707
Creditors: amounts falling due within one year
20
(72,571)
(3,083,534)
Net current assets
32,119,876
26,502,173
Net assets
42,282,273
42,566,815
Capital and reserves
Called up share capital
24
68,868
6,811,527
Capital redemption reserve
3,189,680
3,189,500
Other reserves
912,709
-
0
Profit and loss reserves
38,111,016
32,565,788
Total equity
42,282,273
42,566,815

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).

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:
28 August 2024
Mr P Boyle
Director
Company registration number 09437639 (England and Wales)
FLAVOUR WAREHOUSE HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 15 -
Share capital
Capital redemption reserve
Non-distributable reserves
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
Balance at 1 December 2021
6,811,527
3,189,500
-
50,403,250
60,404,277
740,708
61,144,985
Year ended 30 November 2022:
Profit and total comprehensive income
-
-
-
21,835,635
21,835,635
320,884
22,156,519
Dividends
12
-
-
-
(3,000,000)
(3,000,000)
-
(3,000,000)
Balance at 30 November 2022
6,811,527
3,189,500
-
69,238,885
79,239,912
1,061,592
80,301,504
Year ended 30 November 2023:
Profit for the year
-
-
-
18,044,737
18,044,737
154,029
18,198,766
Other comprehensive income:
Profit on sale of freehold property
-
-
3,055,231
-
3,055,231
-
3,055,231
Total comprehensive income
-
-
3,055,231
18,044,737
21,099,968
154,029
21,253,997
Dividends
12
-
-
-
(3,000,000)
(3,000,000)
-
(3,000,000)
Own shares acquired
-
-
-
(140)
(140)
-
(140)
Reduction of shares
24
(180)
180
-
-
-
-
-
Other movements
(6,742,479)
-
(2,142,522)
-
(8,885,001)
-
(8,885,001)
Balance at 30 November 2023
68,868
3,189,680
912,709
84,283,482
88,454,739
1,215,621
89,670,360
FLAVOUR WAREHOUSE HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
Share capital
Capital redemption reserve
Non-distributable reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 December 2021
6,811,527
3,189,500
-
34,758,068
44,759,095
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
-
-
807,720
807,720
Dividends
12
-
-
-
(3,000,000)
(3,000,000)
Balance at 30 November 2022
6,811,527
3,189,500
-
32,565,788
42,566,815
Year ended 30 November 2023:
Profit for the year
-
-
-
8,545,368
8,545,368
Other comprehensive income:
Profit on sale of freehold property
-
-
3,055,231
-
3,055,231
Total comprehensive income
-
-
3,055,231
8,545,368
11,600,599
Dividends
12
-
-
-
(3,000,000)
(3,000,000)
Own shares acquired
-
-
-
(140)
(140)
Redemption of shares
24
-
-
-
-
180
Reduction of shares
24
(180)
180
-
-
(180)
Other movements
(6,742,479)
-
(2,142,522)
-
(8,885,001)
Balance at 30 November 2023
68,868
3,189,680
912,709
38,111,016
42,282,273
FLAVOUR WAREHOUSE HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
14,878,118
28,194,097
Interest paid
(2,913)
(9,792)
Income taxes paid
(9,733,978)
(7,676,617)
Net cash inflow from operating activities
5,141,227
20,507,688
Investing activities
Purchase of business
-
(10,275,841)
Purchase of intangible assets
(37,897)
(33,103)
Purchase of tangible fixed assets
(1,195,617)
(1,354,807)
Proceeds from disposal of tangible fixed assets
20,209
349,608
Proceeds from disposal of investments
3,155
-
Interest received
1,066,527
140,279
Net cash used in investing activities
(143,623)
(11,173,864)
Financing activities
Purchase of own shares
(140)
-
0
Payment of finance leases obligations
(13,309)
(166,603)
Dividends paid to equity shareholders
(3,870,000)
(2,130,000)
Net cash used in financing activities
(3,883,449)
(2,296,603)
Net increase in cash and cash equivalents
1,114,155
7,037,221
Cash and cash equivalents at beginning of year
30,324,763
23,287,542
Cash and cash equivalents at end of year
31,438,918
30,324,763
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
1
Accounting policies
Company information

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.

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.

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:

 

1.2
Basis of consolidation

In the parent company 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. Investments in subsidiaries are accounted for at cost less impairment.

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.

1.3
Going concern

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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.4
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.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

1.6
Intangible fixed assets other than goodwill

Trademarks and software costs are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Software
25% straight line
Trademarks
10% straight line
1.7
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:

Freehold land and buildings
2% straight line on buildings (land is not depreciated)
Leasehold land and buildings
10% straight line
Plant and equipment
15% reducing balance & 25% straight line
Fixtures and fittings
25% reducing balance & 50%, 25%, 10% straight line
Computers
33.33% straight line
Motor vehicles
25% reducing balance & 25% straight line

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.

1.8
Fixed asset investments

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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.9
Impairment of fixed assets

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.

1.10
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 costs that have been incurred in bringing the stocks to their present location and condition.

1.11
Cash at bank and in hand

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.

1.12
Financial instruments

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

Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs.

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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

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 group after deducting all of its liabilities.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 21 -

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

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.

1.14
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 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

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.

1.15
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.

 

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.

1.16
Retirement benefits

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

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.17
Leases

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.

1.18
Government grants

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.

1.19
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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 23 -
2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Goodwill

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.

Impairment of investments

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.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Principal activity
169,881,051
140,104,646
2023
2022
£
£
Turnover analysed by geographical market
UK
157,489,841
122,160,844
EU
12,126,447
17,418,763
Rest of world
264,763
525,039
169,881,051
140,104,646
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
3
Turnover and other revenue
(Continued)
- 24 -
2023
2022
£
£
Other revenue
Interest income
1,066,527
140,334
Grants received
5,428
8,608
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
9,000
8,000
Audit of the financial statements of the company's subsidiaries
54,180
47,700
63,180
55,700
For other services
All other non-audit services
42,808
14,139
5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
78,813
(46,477)
Government grants
(5,428)
(8,608)
Depreciation of owned tangible fixed assets
1,010,390
925,408
Depreciation of tangible fixed assets held under finance leases
-
9,025
Loss/(profit) on disposal of tangible fixed assets
4,090
(739)
Amortisation of intangible assets
3,310,955
3,206,357
Impairment of intangible assets
-
0
1,357,662
Operating lease charges
937,835
630,050
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
200,851
137,723
Company pension contributions to defined contribution schemes
60,000
40,000
260,851
177,723

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
6
Directors' remuneration
(Continued)
- 25 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
200,851
137,723
Company pension contributions to defined contribution schemes
60,000
40,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
851,278
140,334
Other interest income
215,249
-
Total income
1,066,527
140,334
8
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
2
1
2
1
Managerial staff
6
6
-
-
Other employees
350
274
-
-
Total
358
281
2
1

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
10,616,877
9,080,007
200,851
137,723
Social security costs
898,481
799,270
26,831
18,520
Pension costs
366,836
284,848
60,000
40,000
11,882,194
10,164,125
287,682
196,243
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 26 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
79
1,110
Interest on finance leases and hire purchase contracts
2,834
4,736
Other interest
-
3,946
Total finance costs
2,913
9,792
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
6,538,997
6,067,074
Adjustments in respect of prior periods
166,122
(95,171)
Total current tax
6,705,119
5,971,903
Deferred tax
Origination and reversal of timing differences
110,936
108,930
Total tax charge
6,816,055
6,080,833

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).

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
10
Taxation
(Continued)
- 27 -

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
25,014,821
28,237,352
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
5,756,150
5,365,097
Tax effect of expenses that are not deductible in determining taxable profit
878,536
245,063
Tax effect of income not taxable in determining taxable profit
(1,249)
-
0
Unutilised tax losses carried forward
-
0
390
Adjustments in respect of prior years
-
0
144,888
Permanent capital allowances in excess of depreciation
11,287
(36,338)
Amortisation on assets not qualifying for tax allowances
-
0
609,208
Other permanent differences
(2,155)
254
Under/(over) provided in prior years
166,122
(240,059)
Other timing differences
7,364
(7,670)
Taxation charge
6,816,055
6,080,833
11
Amounts written off investments
2023
2022
£
£
Amounts written back to/(written off) financial assets held at cost
3,155
(21,557)
12
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
3,000,000
3,000,000
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 28 -
13
Intangible fixed assets
Group
Goodwill
Negative goodwill
Software
Trademarks
Total
£
£
£
£
£
Cost
At 1 December 2022
31,470,877
(125,269)
133,040
246,614
31,725,262
Additions
-
0
-
0
7,589
30,308
37,897
Disposals
-
0
-
0
(46,534)
-
0
(46,534)
Other movements
(142,099)
-
0
-
0
-
0
(142,099)
At 30 November 2023
31,328,778
(125,269)
94,095
276,922
31,574,526
Amortisation and impairment
At 1 December 2022
11,576,239
(21,922)
83,280
78,738
11,716,335
Amortisation charged for the year
3,261,610
(12,527)
26,172
35,700
3,310,955
Disposals
-
0
-
0
(46,534)
-
0
(46,534)
At 30 November 2023
14,837,849
(34,449)
62,918
114,438
14,980,756
Carrying amount
At 30 November 2023
16,490,929
(90,820)
31,177
162,484
16,593,770
At 30 November 2022
19,894,638
(103,347)
49,760
167,876
20,008,927
Company
Trademarks
£
Cost
At 1 December 2022
244,566
Additions
23,360
At 30 November 2023
267,926
Amortisation and impairment
At 1 December 2022
78,738
Amortisation charged for the year
26,793
At 30 November 2023
105,531
Carrying amount
At 30 November 2023
162,395
At 30 November 2022
165,828
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 29 -
14
Tangible fixed assets
Group
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 December 2022
6,528,023
717,504
3,641,800
2,076,812
154,024
55,639
13,173,802
Additions
-
0
-
0
406,077
672,895
101,640
14,995
1,195,607
Disposals
(6,528,023)
(126)
(7,022)
(108,267)
(32,650)
(7,083)
(6,683,171)
At 30 November 2023
-
0
717,378
4,040,855
2,641,440
223,014
63,551
7,686,238
Depreciation and impairment
At 1 December 2022
629,211
313,034
1,509,619
802,417
94,169
27,853
3,376,303
Depreciation charged in the year
69,040
83,485
359,122
434,761
57,350
6,632
1,010,390
Eliminated in respect of disposals
(698,251)
(126)
(3,528)
(92,411)
(31,980)
(2,804)
(829,100)
At 30 November 2023
-
0
396,393
1,865,213
1,144,767
119,539
31,681
3,557,593
Carrying amount
At 30 November 2023
-
0
320,985
2,175,642
1,496,673
103,475
31,870
4,128,645
At 30 November 2022
5,898,812
404,470
2,132,181
1,274,395
59,855
27,786
9,797,499
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 30 -
Company
Freehold land and buildings
£
Cost
At 1 December 2022
6,528,023
Disposals
(6,528,023)
At 30 November 2023
-
0
Depreciation and impairment
At 1 December 2022
629,211
Depreciation charged in the year
69,040
Eliminated in respect of disposals
(698,251)
At 30 November 2023
-
0
Carrying amount
At 30 November 2023
-
0
At 30 November 2022
5,898,812

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
-
0
27,074
-
0
-
0
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
10,000,002
10,000,002
Investments in joint ventures
17
2,500
2,500
-
0
-
0
2,500
2,500
10,000,002
10,000,002
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
15
Fixed asset investments
(Continued)
- 31 -
Movements in fixed asset investments
Group
Shares in joint ventures
Shares in subsidiaries
Total
£
£
£
Cost or valuation
At 1 December 2022
2,500
-
2,500
Additions
-
8,885,002
8,885,002
Disposals
-
(8,885,002)
(8,885,002)
At 30 November 2023
2,500
-
2,500
Carrying amount
At 30 November 2023
2,500
-
2,500
At 30 November 2022
2,500
-
2,500
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 December 2022
10,000,002
Additions
8,885,002
Disposals
(8,885,002)
At 30 November 2023
10,000,002
Carrying amount
At 30 November 2023
10,000,002
At 30 November 2022
10,000,002

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.

16
Subsidiaries

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

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
16
Subsidiaries
(Continued)
- 32 -
Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Flavour Warehouse Limited
1
Ordinary
100.00
-
Operation Vape Limited
1
Ordinary
100.00
-
Vape Laboratories Limited
1
Ordinary
100.00
-
Total Vapour Limited
2
Ordinary
-
100.00
Premier Retail Holdings Limited
1
Ordinary
-
100.00
Premier Retail Limited
1
Ordinary
-
100.00
Premier Vaping Limited
1
Ordinary
-
100.00
Vapouriz Limited
1
Ordinary
-
100.00
Vapouriz Labs Ltd
1
Ordinary
-
100.00
Vapestore Retail Ltd
1
Ordinary
-
100.00
Vapestars Ltd
1
Ordinary
-
100.00
Trulo GmbH
3
Ordinary
-
50.00
Vampire Vape Limited
1
Ordinary
-
100.00
Vampire Vape eLiquids Limited
1
Ordinary
-
100.00
Operation Vape GmbH
4
Ordinary
-
50.00

Registered office addresses (all UK unless otherwise indicated):

1
Global Way, Darwen, Lancashire, BB3 0RW
2
Number One, Lanyon Quay, Belfast, Antrim, Northern Ireland, BT1 3LG
3
Ringbahnstraße 7, 41460 Neuss
4
Friedrichstraße 104, 40217 Düsseldorf

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:

17
Joint ventures

Details of joint ventures at 30 November 2023 are as follows:

Name of undertaking
Registered office
Interest
% Held
held
Direct
Indirect
Dot Vape Limited
4 Beacon Road, Trafford Park, Manchester, England, M17 1AF
Ordinary
-
50.00
18
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
3,566,823
4,333,662
-
-
Work in progress
-
207,728
-
-
Finished goods and goods for resale
21,304,797
20,712,812
-
0
-
0
24,871,620
25,254,202
-
-
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 33 -
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
10,140,417
14,493,894
2,953
22,843
Corporation tax recoverable
3,635,868
691,580
74,951
45,597
Amounts owed by group undertakings
-
-
8,028,927
18,777,980
Other debtors
531,843
166,555
-
0
-
0
Prepayments and accrued income
14,937,216
10,093,050
68,962
30,176
29,245,344
25,445,079
8,175,793
18,876,596
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
21
-
0
13,309
-
0
-
0
Trade creditors
3,352,798
5,405,331
28,200
-
0
Corporation tax payable
43,835
128,406
-
0
-
0
Other taxation and social security
2,856,752
4,230,018
19,297
62,536
Dividends payable
-
0
870,000
-
0
870,000
Other creditors
5,669,701
14,736,848
16,075
2,145,000
Accruals and deferred income
3,887,170
4,458,309
8,999
5,998
15,810,256
29,842,221
72,571
3,083,534
21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
-
0
13,309
-
0
-
0

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 34 -
22
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
804,791
700,334
Retirement benefit obligations
(4,610)
-
Provisions
-
(11,089)
800,181
689,245
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 December 2022
689,245
-
Charge to profit or loss
110,936
-
Liability at 30 November 2023
800,181
-

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.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
366,836
284,848

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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 35 -
24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'A' Ordinary shares of £1 each
-
4,500,000
-
4,500,000
'A3' Ordinary shares of £1 each
-
500,000
-
500,000
'B1' Ordinary shares of 50p each
-
1,837,800
-
918,900
'B2' Ordinary shares of 50p each
-
1,421,100
-
710,550
'B3' Ordinary shares of 50p each
-
204,200
-
102,100
'B4' Ordinary shares of 50p each
-
157,900
-
78,950
'C' Ordinary shares of 1p each
-
102,736
-
1,027
'AF' Ordinary shares of 1p each
4,500,000
-
45,000
-
'AF3' Ordinary shares of 1p each
500,000
-
5,000
-
'BF1' Ordinary shares of 0.5p each
1,837,800
-
9,189
-
'BF2' Ordinary shares of 0.5p each
1,421,100
-
7,106
-
'BF3' Ordinary shares of 0.5p each
204,200
-
1,021
-
'BF4' Ordinary shares of 0.5p each
157,900
-
790
-
'CF' Ordinary shares of 0.9p each
84,736
-
763
-
8,705,736
8,723,736
68,869
6,811,527
FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
24
Share capital
(Continued)
- 36 -

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.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
24
Share capital
(Continued)
- 37 -

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:

 

 

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':

 

 

5) On 22 August 2023, the company entered into a capital reduction of all of its 'P' designated shares in their entirety.

25
Financial commitments, guarantees and contingent liabilities

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.  

 

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 38 -
26
Operating lease commitments
Lessee

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:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
1,413,517
1,326,589
-
-
Between two and five years
4,265,264
1,782,221
-
-
In over five years
-
18,003
-
-
5,678,781
3,126,813
-
-
27
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
193,498
-
-
-
28
Events after the reporting date

On 6 December 2023, the company:

 

29
Related party transactions

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

30
Controlling party

The ultimate controlling party is Mr P Boyle, director, by virtue of his majority shareholding in the company.

FLAVOUR WAREHOUSE HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 39 -
31
Other reserves

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.

32
Acquisition and disposal of subsidiary

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.

33
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
18,198,777
22,156,519
Adjustments for:
Taxation charged
6,816,055
6,080,833
Finance costs
2,913
9,792
Investment income
(1,066,527)
(140,334)
Loss/(gain) on disposal of tangible fixed assets
4,090
(739)
Amortisation and impairment of intangible assets
3,310,955
4,564,019
Depreciation and impairment of tangible fixed assets
1,010,390
934,433
Other gains and losses
(3,155)
21,557
Movements in working capital:
Decrease/(increase) in stocks
382,582
(13,461,473)
Increase in debtors
(855,977)
(13,934,276)
(Decrease)/increase in creditors
(12,921,985)
21,963,766
Cash generated from operations
14,878,118
28,194,097
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