Registered number:
For the Year Ended
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LDL Group Holdings Limited
Company Information
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LDL Group Holdings Limited
Contents
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LDL Group Holdings Limited
Group Strategic Report
For the Year Ended 31 December 2023
The directors present their strategic report for the year ended 31 December 2023.
Principal activity The principal activity of the company during the year was of that of a holding company and the provision of management services. The principal activity of the group was the distribution of components and furniture for use in the fitted furniture industry. Business model The group operates an ex-stock warehouse facility and assembly service, offering over 8,000 SKUs and bespoke width drawers on a next day service. The group’s aim is to provide its customers with tailored, easy solutions to complex products allied to an industry leading service and product range.
The year to December 2023 represents the first full year of trading following the completion in August 2022 of a management buy-out of the principal trading subsidiary, LDL Components Limited, led by Simon Noble and Robert Darroch, the Operations and Finance Director respectively. The outgoing managing director, Simon Ogden, retains a minority ownership stake in the group but withdrew from day-to-day involvement. The new management team share LDL’s established ethos and culture of an innovative, service-led business and have therefore pursued a programme of continual improvement, rather than significant change since the change in ownership.
The new management team were supported in the transaction by HSBC. Funding was structured to ensure that all commitments can continue to be met whilst allowing the business to continue to invest as required to meet ambitious growth targets. The company retains a robust working capital position with access to cash resources if required. The Group delivered resilient performance in 2023 in what was, as anticipated, a significantly more challenging market than that which benefited from the surge in demand post-covid. Macro-economic factors, notably the shock of rapid interest rate rises, high inflation and political uncertainty combined to undermine consumer confidence. The resulting stagnation in the housing and home improvement markets reduced demand for ‘big ticket’ purchases, such as kitchens, bathroom and bedrooms. The reduction in demand naturally increased competition in an already competitive market, predominantly focussed on price. Whilst customer retention did therefore necessitate an element of price matching, LDL’s continued investment in service, quality and product innovation creates an offer that is extremely difficult for competitors to match. In the context of the market, turnover at £13.6m, 2.4% down on pro rata turnover from the last 4 months of 2022, at a gross margin of 25.31% (2023: 26.06%), is considered robust performance that underscores the continued value of the investment made in product and service. Notably, considerable investment has been made into stock to ensure exceptional fulfilment levels, which are critical for a distribution operation in a competitive marketplace. Stock value has therefore increased from £1.1m to £1.3m year on year. The business will continue to develop its product portfolio over the next 12 months to reflect market demands. Investment will be focussed on its digital marketing strategy, sales force and the drive to maintain and improve exceptional service levels.
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LDL Group Holdings Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2023
The group’s activities expose it to a number of risks and uncertainties, notably it’s connection to the housing market and the impact of macro-economic factors such as interest rates and exchange rates on price and demand.
Market risk Prevailing economic factors for 2024 are likely to present a challenge throughout the year. Continuing high interest rates, inflation and political uncertainty are likely to impede growth in the housing and home improvement markets and therefore further reduce demand for the company’s products and services. The company is positioned in the quality sector of the market, the demographic of which is impacted less by these factors than the lower quality, price focussed segment. As such, the expectation is that demand will remain relatively consistent. Inflation risk Whilst reducing, core inflation remains above the Bank of England’s target of 2% and with geopolitical uncertainty producing further inflationary pressures, the cost base of the business may increase. In a competitive market, the company’s ability to raise selling prices is limited, therefore persistent inflation will erode profitability. The business leverages its excellent, longstanding relationships with brand partners to control the cost of sales and operates a robust tendering process for significant overheads to mitigate this risk. Customer retention The kitchen, bedroom and bathroom market is highly competitive with numerous suppliers offering comparable products, giving the customer the opportunity to source elsewhere. LDL has always been service, rather than price led, and has invested in the technical knowledge, range of solutions and infrastructure to differentiate from the competition. This service level is difficult to emulate and ensures strong levels of retention. Supplier retention There are a relatively small number of suppliers to the KBB market that are of the requisite quality for LDL to work with. Losing access to supply would represent a risk to customer retention and incur costs in sourcing a replacement. Fundamentally, sales volumes dictate the long-term viability of a relationship. In addition to delivering volume, LDL has always maintained excellent working relationships with a small number of carefully selected brand partners, fostering trust and ensuring they feel the benefit of our commitment to product innovation and high service levels. Exchange rate risk The company sources product from premium European suppliers and as such is exposed to fluctuations in both EUR and CHF, whilst sales are denominated only in GBP. Whilst those currencies are relatively stable, the company utilises forward contracts to mitigate the risk of movements in between opportunities to rebase the selling price, to ensure sales remain profitable.
Financial key performance indicators are as follows:
2023 2022 2022 Pro Rata Turnover £13,615,485 £4,653,243 £13,959,729 Gross profit % 25.3% 26.1% 26.1% Stock turnover 7.9 9.8 9.8 Turnover per head £378,207 £377,290 £377,290
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LDL Group Holdings Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2023
This report was approved by the board and signed on its behalf.
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LDL Group Holdings Limited
Directors' Report
For the Year Ended 31 December 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £357,185 (Period ended 31 December 2022 -£268,045).
The Directors do not recommend payment of a final dividend.
The directors who served during the year were:
The future developments of the Group are disclosed in the Strategic Report.
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LDL Group Holdings Limited
Directors' Report (continued)
For the Year Ended 31 December 2023
There have been no significant events affecting the Group since the year end.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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LDL Group Holdings Limited
Independent Auditors' Report to the Members of LDL Group Holdings Limited
We have audited the financial statements of LDL Group Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 or the 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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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LDL Group Holdings Limited
Independent Auditors' Report to the Members of LDL Group Holdings Limited (continued)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group 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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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LDL Group Holdings Limited
Independent Auditors' Report to the Members of LDL Group Holdings Limited (continued)
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 Auditors' 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the Group operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Group's policies and procedures for:
−Identifying, evaluating, and complying with laws and regulations; and
−Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Group operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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LDL Group Holdings Limited
Independent Auditors' Report to the Members of LDL Group Holdings Limited (continued)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
SK1 3GG
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LDL Group Holdings Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Registered number: 14067555
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 38 form part of these financial statements.
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LDL Group Holdings Limited
Registered number: 14067555
Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 38 form part of these financial statements.
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LDL Group Holdings Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Consolidated Analysis of Net Debt
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
LDL Group Holdings Limited is a private company limited by members capital and incorporated in England and Wales. The address of its registered office and principal place of business is Unit 12 Graphite Way, Rossington Park, Derbyshire, SK13 1QH.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The Company was incorporated on 25 April 2022 and the nature of the Company's operation and principal activity is that of a Holding company.
The Company acquired 100% of the share capital of LDL Holdings Limited on 30 August 2022. The principal activity of the Group is disclosed in the Strategic report. The Consolidated Financial Statements of the Company as at and for the period ended 31 December 2023 comprise the Company and its subsidiaries (together referred to as the "Group").
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
The directors have prepared financial forecasts which indicate that the Group and Company will maintain sufficient financial headroom to enable it to continue meeting its liabilities as they fall due in the normal course of business for at least the next 12 months, following approval of these financial statements. The forecast assessment considers various factors, including historical and projected financial performance, available cash resources, existing and potential sources of financing, and any relevant external factors affecting the business environment.
The net current liabilities position of the Group is attributable to a technical breach of a loan covenant at the year-end, necessitating the disclosure of the loan balance as due within one year. The funding relates to the management buy-out of 2022 rather than operational funding and the company retains the support of lenders and suppliers. The directors therefore have a reasonable expectation that the Group has adequate financial and other resources to continue in operational existence for the foreseeable future. Accordingly, they continue to prepare the financial statements on a going concern basis.
Functional and presentation currency
Transactions and balances
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Investments in non-derivative instruments that are equity to the issuer are measured:
∙at fair value with changes recognised in the Consolidated Statement of Comprehensive Income if the shares are publicly traded or their fair value can otherwise be measured reliably;
∙at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
accounting for interest rate and foreign exchange derivatives.
affect the reported amounts of assets, liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based or as a result of new information or more experience. Significant accounting policies, estimates and assumptions, and judgements are provided below: Recoverable value of trade debtors The recoverable values of trade and other debtors are reviewed regularly in light of available economic information specific to each debtor and specific provisions are recognised for balances considered to be at risk or irrecoverable. At 31 December 2023, the carrying amount of trade debtors totalled £930,236 (2022: £887,591).
Analysis of turnover by country of destination:
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
.Creditors: Amounts falling due within one year (continued)
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Terms of the bank loans can be seen in note 18.
Loans from directors Other creditors relates to deferred consideration due to a director, which is secured by way of a debenture containing fixed and floating charges. Interest is being charged at a rate of 7.40% above Bank of England base rate and it is due for repayment on 30 August 2025. Details of shares shown as liabilities At 30 August 2022, the Company issued 868,350 £1 non-redeemable Preference Shares, these are included within the Other loans above. The Preference Shares carry a fixed cumulative, but not compounding Preferential Dividend at the relevant rate of their nominal value per share. The relevant rate shall be the annual rate of 0.001% while the controlling interest in the Company is held by a person or persons falling within the permitted control group, and at all other times, it shall be 15% per annum. Further details regarding the Preference Shares can be seen in note 22.
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
22.Share capital (continued)
Profit and loss account
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LDL Group Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £35,607 (2022: £13,910). Contributions totalling £8,407 (2022: £5,024) were payable to the fund at the balance sheet date and are included in other creditors.
There is no overall controlling party of LDL Group Holdings Limited.
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