The directors present their strategic report for the period ended 1 December 2023.
Introduction
During 2023 the group continued its recovery from the COVID-19 pandemic which severely impacted the 2020 financial performance of the company.
The group's turnover remained strong and consistent, being £18.4 million in 2023 and £17.3 million in 2022.
As with all UK businesses, the group saw increases in costs throughout 2023 driven by increased inflation in the UK economy but was able to mitigate those increases and saw an increase in Gross Profit of £1.4 million and GPM increasing from 33.1% in 2022 to 38.7% in 2023.
The group's continued mix of customers and sectors within the removals and storage industry also supported the strong financial performance in 2023.
The group continues to look to grow and on 31st December 2022 acquired 100% of the issue share capital of Advanced Removals & Storage Limited, a removals and storage business based in Gloucester.
The group also restructured its finances during the period and on 1st December 2023 repaid the loan due to Connection Capital of £2.3 million. On the same date, Connection Capital LLP exercised the warrant and option agreement requiring Doree Bonner Holdings Limited to purchase the issued Class C Ordinary warrant shares for total consideration of £0.75m. On 1st December the group also took out a new loan with Close Invoice Finance Limited for £1.25 million repayable over 3 years. This restructuring resulted in some exceptional costs in 2023.
To give a true reflection of the trading performance of the group, the Profit and Loss for the period was as follows:
The directors are pleased to report that the group generated an operating profit of £688,812 (2022: £1,095,812) which helped the company generate cash inflows from operations of £3,210,763 (2022: £2,295,644).
Cash and cash equivalents decreased during 2023 ending the period at £1,053,206 compared to £1,195,149 at the beginning of the period.
Given the nature of the business, the company’s directors are of the opinion that analysis using KPI’s, other than those which emerge from the financial statements and discussed in the business review above are not necessary for an understanding of the development.
Future Developments
The group continues its strategy to grow the business by developing existing revenue streams and existing customers. The group also continues to review opportunities to grow the business through acquisitions as well as expanding the customer base.
In addition, the group continues its annual fleet investment to ensure operational efficiency and compliance with regulation.
Principal risks and uncertainties
Its primary commercial risk is in generating and continuing to generate turnover which it does through maintaining its reputation in the market place for good and comprehensive removal and storage services. It also has an extremely diverse customer base in terms of the markets it operates in and the geographic spread of its branches assists this process.
Financial risk operations
The board of the group is responsible for managing the liquidity, interest and foreign currency risks associated with the group's activities.
In addition to cash and borrowings held with the group's bankers the group has other financial assets and liabilities such as trade debtors and trade creditors arising directly from operations.
Liquidity risk
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The group limits its exposure to interest rate risk on its fixed rate borrowings by ensuring that they are taken out at the most competitive rates available and by keeping borrowings to the minimum conducive to the profitable growth of the business.
Foreign currency risk
The group's principal foreign currency exposure arises from trading with overseas companies. This is limited by the regular settlement of balances with overseas trading partners.
On behalf of the board
The directors present their annual report and financial statements for the period ended 1 December 2023.
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Likely future developments in the business of the group are included in the strategic report.
The auditor, Beavis Morgan Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Doree Bonner Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 1 December 2023 which comprise 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 a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 period 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.
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, company law, tax and pensions legislation.
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include environmental regulations and health and safety legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
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 period was £1,837,451 (2022 - £167,110 loss).
Doree Bonner Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is c.o A2E Industries Limited, No. 1 Marsden Street, Manchester, M2 1HW.
The group consists of Doree Bonner Holdings Limited and all of its subsidiaries.
The accounting period for 2023 has been extended by 1 day to include the completion of the refinancing in progress at 30 November 2023. All future financial statements will be made up to 30 November 2023.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. 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 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Doree Bonner Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 1 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The group is financed through a combination of external debt and shareholder loans and enjoys the continued support of its shareholders. A portion of the external debt was repaid on 1 December 2023. The directors have considered all the above matters and believe it is appropriate to adopt the going concern basis of preparation of the financial statements.
Turnover represents amounts receivable for removal services net of VAT. Turnover is recognised when a job is fully wrapped, packed and collected for dispatch. Should the collection of the job straddle the period end, the relevant proportion of the revenue relating to the services is accrued. All freight and shipping costs, including insurance costs, relating to the job are recognised on the same basis.
Storage revenue is recognised in the period in which the service is provided.
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.
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The group has applied the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 'Other Financial Instruments Issues' to 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 at bank and in hand, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets 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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal 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, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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, bank loans, invoice discounting, finance leases, loans from group members and preference shares classed as debt are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities. Trade creditors are recognised at transaction price.
Derivatives are non-basic financial instruments. Non-basic financial instruments are initially recognised at fair value on the date the contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of non-basic financial instruments are recognised in profit or loss in finance costs or finance income as appropriate.
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 period. 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 periods and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense.
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 profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Doree Bonner Holdings Limited has 1,025,000 preference shares in issue. These preference shares have been classified as a liability in the financial statements as they have redemption conditions which are outside of the company's control. The preference shares carry no interest and have therefore been discounted. The preference shares have been discounted at an implicit rate of 15% over the estimated redemption period of 10 years. The carrying value of the preference shares is sensitive to changes in the estimated redemption period. See note 14 for carrying amounts.
Estimation is required in determining the useful lives of such assets and their residual values. The amortisation and depreciation charge is sensitive to changes in the estimated useful economic lives of such assets. The carrying value of intangible assets and tangible assets is disclosed in notes 10 and 11 respectively.
Estimation is required in determining the fair value of assets, liabilities and contingent liabilities acquired through business. The fair value of assets, liabilities and contingent liabilities acquired through business combination is disclosed in note 24.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
As of 1st April 2023, the main rate of UK corporation tax increased from 19% to 25%. As the financial periods of the group and its subsidiaries straddle this date, a corporation tax rate of 23.01% has been applied in the reconciliation below. This corporation tax rate is calculated by apportioning the two tax rates on a weighted basis for the proportion of the financial period for which the main tax rate was applicable.
The actual tax charge for the period can be reconciled to the statement of comprehensive income as follows:
Goodwill includes goodwill recognised on the purchase of the subsidiary, Kelerbay Limited. The carrying amount of this goodwill is £1,469,210 (2022: £1,879,222) and has a remaining amortisation period of 3.5 years.
Goodwill additions relate to goodwill recognised on the purchase of the subsidiary, Advanced Removals & Storage Limited. The carrying amount of this goodwill is £236,889 (2022: £nil) and has a remaining amortisation period of 9 years.
The remaining goodwill balance relates to the acquisition of the trade and assets of H.F. Luxford & Sons Ltd. The carrying amount of this goodwill is £247,239 (2022: £290,235) and has a remaining amortisation period of 5.75 years.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The hire purchase liability is secured over the assets to which it belongs.
Details of the company's subsidiaries, all included in the consolidation, at 1 December 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Advanced Removals & Storage Limited (registered number 05362839) is exempt from the requirements of UK Companies Act 2006 relating to the audit of individual financial statements by virtue of section 479A of the Act. The company has provide this subsidiary with a guarantee under section 479C of the Act thereby undertaking to guarantee all outstanding liabilities to which the subsidiary is subject at the end of the financial period.
See note 20 for information regarding the valuation of the irredeemable preference shares classed as debt.
The non-basic financial instrument relates to an option agreement and a share warrant agreement between Connection Capital LLP and Doree Bonner Holdings Limited. Under the terms of the share warrant agreement, Connection Capital LLP were granted warrant shares in Doree Bonner Holdings Limited with a subscription price of £0.01 per share. If exercised, the warrant holder will be entitled to such number of Class C ordinary shares as represents 10% of the enlarged share capital of Doree Bonner Holdings Limited. In addition, the conditions in the option agreement are such that, if exercised by Connection Capital LLP, Doree Bonner Holdings Limited would be required to purchase the exercised warrant shares from Connection Capital LLP for consideration of £750,000. The warrant and option agreement was exercised by Connection Capital LLP during the financial period.
Included within other creditors is £1,000,591 (2022: £1,587,739 - other debtor) of funds owed by the Group that relate to an invoice discount facility held with Close Brothers Limited. Fixed and floating charges over all property and undertakings of the company and the group are held by Close Brothers Limited.
The subsidiary's bank has a charge on cash deposits up to a limit of £56,000 (2022: £56,000).
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments
On 11 November 2020, the company issued 1,025,000 preference shares at par in redemption of £1.025m of variable rate loan notes. The preference shares are redeemable on conditions outside the company's control and are therefore classified as debt measured at fair value. There is no premium payable on redemption or right to fixed income. The preference share debt has been discounted to fair value based on an implicit interest rate of 15% over the expected period to redemption. The issue of these preference shares created a reserve, calculated as the excess of consideration received over the fair value of the shares issued. Existing preference shares have been classified as a liability. The difference between the carrying amount of the preference shares and the amount the company will be required to pay at the expected redemption date is £779,754 (2022: £841,743).
Included within other loans is a balance of £1,250,000 (2022: £nil) owed by the subsidiary, Kelerbay Limited, to Close Invoice Finance Limited in relation to a cash flow loan agreement. The loan amount is £1,250,000, interest of 7% per annum over base rate is due on the loan and the loan matures in December 2026.
A fixed and floating charge over all property and undertakings of the subsidiary is held by A2E Industries Limited, a related party, for the provision of a loan facility. At the balance sheet date, the company owed £250,000 (2022: £nil) in relation to the loan facility. Interest of 10% per annum is due on the loan and the loan matures on 1st December 2028.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Deferred taxation is provided in full, without discounting, on all tax deferred resulting from reversing timing differences at the rate of corporation tax anticipated to apply at the time of the future reversal of the timing difference. Deferred tax liabilities are expected to reverse within the next 12 months. The future rate of corporation tax applied to timing differences is 25% (2022: 25%).
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.
At the balance sheet date the group owed £31,406 (2022: £27,289) to the scheme.
Share capital includes 5,000 Ordinary A shares issued but not paid.
A and B ordinary shares rank equally in voting and dividend rights. Preference shares carry no voting or dividend rights and rank ahead of ordinary shares for any distributions made in the event of a winding up.
During the financial period, the company issued 11,111 Class C Ordinary shares with a nominal value of £0.01 each. Consideration of £111 was received for the shares issued. Class C ordinary shares rank equally to A and B ordinary shares in voting and dividend rights. As part of the option and warrant agreement with Connection Capital LLP, these shares were re-purchased by the company for consideration of £750,000 and were subsequently cancelled.
On 31 December 2022 the group acquired 100% of the issued capital of Advanced Removals & Storage Limited.
Some rental agreements the group is party to include provisions to repair and redecorate the property before expiry of the lease. The amount of the future obligation cannot be reliably estimated due to uncertainties surrounding the cost and extent of any future repairs.
The subsidiary, Advanced Removals & Storage Limited, as disclosed in note 13, has taken advantage of the exemption from audit available under Section 479A of the Companies Act 2006. For this subsidiary, the Company has guarenteed all outstanding liabilities as at the period end, until they are setlled in full.
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:
At the balance sheet date, the group owed £47 (2022: £29) to directors of the company. This balance is interest free and repayable on demand.
At the balance sheet date, the company had outstanding loan notes of £324,520 (2022: £562,000) due to directors of the company. Interest accrued on these loan notes at the balance sheet date was £nil (2022: £nil). The loan notes are issued at a market rate of interest, although the directors agreed to forsake any interest earned on the loan notes in the period. The loan notes rank equally among themselves and as a secured obligation of the company.
During the period, the group was charged £300,000 (2022: £120,000) in respect of management charges, recharged expenses, and bonuses by an entity which is a related party by virtue of having a shareholding in the group. In addition to this, the company entered into a secured loan agreement with the related party. The loan amount is £250,000, interest of 10% per annum is charged on the loan and the loan matures on 1st December 2028. At the balance sheet date the company owed £261,404 (2022: £11,404) to the entity. The group together owed £381,404 (2022: £59,404) to the entity.
During the period the group purchased advertising and marketing services totalling £52,686 (2022: £45,718) from an entity which is a related party by virtue of a shareholder's close family member having control over the entity. At the balance sheet date, the group owed £12,602 (2022: £nil) to the entity.
During the period, the group purchased supplies of sea containers totalling £20,525 (2022: £nil) from an entity which is a related party by virtue of common control. At the balance sheet date the group owed £5,790 (2022: £nil) to the entity.