Company registration number SC268674 (Scotland)
HOULIHAN PHARMACY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HOULIHAN PHARMACY LIMITED
COMPANY INFORMATION
Directors
Mr D Houlihan
Mrs P Houlihan
Secretary
Mrs P Houlihan
Company number
SC268674
Registered office
15 Lorne Road
Hillington
Glasgow
United Kingdom
G52 4HG
Auditor
Azets Audit Services
Titanium 1
Kings Inch Place
Renfrew
United Kingdom
PA4 8WF
HOULIHAN PHARMACY LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Income statement
7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
HOULIHAN PHARMACY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The end of the Brexit transition period has also impacted the flow of imported goods and added significant additional red tape and costs to all imported goods.
Notwithstanding these difficult trading conditions, the results for the year show an operating profit of £794k (2022 - £862k) on turnover of £14.0m (2022 - £11.2m). The company has a net balance sheet value of £2.8m at 31 December 2023 (2022 - £2.7m).
Principal risks and uncertainties
We believe that the company can meet key business risks of competition, both local and national, and also of employee retention.
Development and performance
The company will continue to operate from its existing outlets and appraise any opportunities to add further outlets as they become available.
Key performance indicators
The directors monitor turnover, prescription numbers, gross margin and operating profit at individual pharmacy level and for the company as a whole.
Mr D Houlihan
Director
10 September 2024
HOULIHAN PHARMACY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the operation of pharmacy retail outlets.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £375,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr D Houlihan
Mrs P Houlihan
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies 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 company 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The directors have chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management and exposure to risks and uncertainties.
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 (as defined by Section 418 of the Companies Act 2006) of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
HOULIHAN PHARMACY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
Mr D Houlihan
Director
10 September 2024
HOULIHAN PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HOULIHAN PHARMACY LIMITED
- 4 -
Opinion
We have audited the financial statements of Houlihan Pharmacy Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HOULIHAN PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HOULIHAN PHARMACY LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
HOULIHAN PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HOULIHAN PHARMACY LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Greig McKnight
Senior Statutory Auditor
For and on behalf of Azets Audit Services
11 September 2024
Chartered Accountants
Statutory Auditor
Titanium 1
Kings Inch Place
Renfrew
United Kingdom
PA4 8WF
HOULIHAN PHARMACY LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
14,097,131
11,205,908
Cost of sales
(8,973,796)
(6,998,307)
Gross profit
5,123,335
4,207,601
Administrative expenses
(4,329,575)
(3,363,113)
Other operating income
17,080
Operating profit
4
793,760
861,568
Interest payable and similar expenses
7
(168,708)
(26,432)
Profit before taxation
625,052
835,136
Tax on profit
8
(230,256)
(181,401)
Profit for the financial year
394,796
653,735
HOULIHAN PHARMACY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit for the year
394,796
653,735
Other comprehensive income
-
-
Total comprehensive income for the year
394,796
653,735
HOULIHAN PHARMACY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
3,197,010
847,258
Tangible assets
11
712,847
521,279
3,909,857
1,368,537
Current assets
Stocks
12
722,830
717,990
Debtors
13
3,093,232
2,763,237
Cash at bank and in hand
1,560,280
1,287,990
5,376,342
4,769,217
Creditors: amounts falling due within one year
14
(3,133,394)
(2,580,778)
Net current assets
2,242,948
2,188,439
Total assets less current liabilities
6,152,805
3,556,976
Creditors: amounts falling due after more than one year
Loans and overdrafts
15
3,298,118
743,612
(3,298,118)
(743,612)
Provisions for liabilities
Deferred tax liability
17
95,347
73,820
(95,347)
(73,820)
Net assets
2,759,340
2,739,544
Capital and reserves
Called up share capital
19
3
3
Profit and loss reserves
2,759,337
2,739,541
Total equity
2,759,340
2,739,544
The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
Mr D Houlihan
Director
Company Registration No. SC268674
HOULIHAN PHARMACY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
3
2,675,806
2,675,809
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
653,735
653,735
Dividends
9
-
(590,000)
(590,000)
Balance at 31 December 2022
3
2,739,541
2,739,544
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
394,796
394,796
Dividends
9
-
(375,000)
(375,000)
Balance at 31 December 2023
3
2,759,337
2,759,340
HOULIHAN PHARMACY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
1,538,626
555,254
Interest paid
(168,708)
(26,432)
Income taxes paid
(190,739)
(189,983)
Net cash inflow from operating activities
1,179,179
338,839
Investing activities
Purchase of intangible assets
(2,649,294)
Purchase of tangible fixed assets
(499,260)
(211,881)
Proceeds on disposal of tangible fixed assets
11,510
Amounts repaid/(drawn) by directors
(37,127)
573,034
Net cash (used in)/generated from investing activities
(3,174,171)
361,153
Financing activities
Proceeds of new bank loans
3,516,811
Repayment of bank loans
(874,529)
(74,667)
Payment of finance leases obligations
(17,131)
Dividends paid
(375,000)
(590,000)
Net cash generated from/(used in) financing activities
2,267,282
(681,798)
Net increase in cash and cash equivalents
272,290
18,194
Cash and cash equivalents at beginning of year
1,287,990
1,269,796
Cash and cash equivalents at end of year
1,560,280
1,287,990
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Houlihan Pharmacy Limited is a private company limited by shares incorporated in Scotland. The company's registered number and registered office address can be found on the Company Information page.
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.
1.2
Going concern
The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have considered the company's ability to meet its liabilities as they fall due.true
The Directors have made appropriate enquiries and carried out a review of the company’s projections and available banking facilities, taking account of possible changes in trading performance and considering business risk.
The current and future financial position of the company, its cash flows and liquidity position have been reviewed by the directors. The company has a strong cash position as at 31 December 2023 and subsequent to the reporting date has agreed new banking facilities, ensuring the company has access to capital on an ongoing basis. Following this review, the directors have a reasonable expectation that the company has adequate resources to continue in operational existences for the foreseeable future. This includes ensuring the company has sufficient headroom from existing funding facilities to meet any additional cash requirements that would be contingent on a downturn in activity.
As such, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the acquisition of various businesses, is amortised evenly over its estimated useful life. Where goodwill arose prior to the FRS 102 transition date, the estimated useful life is considered up to a maximum of twenty years.
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a financial lease, over the lease term, whichever is the shorter.
Fixtures and fittings
15% on cost
Motor vehicles
25% on cost
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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 initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly into equity.
Current or deferred taxation assets and liabilities are not discounted.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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 income statement, 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 when the company has 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.
1.12
Employee benefits
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.
1.13
Retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the profit or loss in the period to which they relate.
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.14
Leases
Assets held under hire purchase or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease terms, whichever is the shorter.
The interest element of these obligation is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
NHS income
13,643,268
10,809,920
Counter sales
453,863
395,661
Wholesale income
-
327
14,097,131
11,205,908
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
23,500
19,500
Depreciation of owned tangible fixed assets
272,833
168,056
Depreciation of tangible fixed assets held under finance leases
16,417
25,697
Loss on disposal of tangible fixed assets
6,932
-
Amortisation of intangible assets
299,542
145,000
Operating lease charges
137,280
166,617
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management and administration
24
18
Pharmacy shop staff
86
75
Total
110
93
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,662,172
2,084,521
Social security costs
187,505
160,030
Pension costs
42,442
27,206
2,892,119
2,271,757
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
19,932
20,589
Company pension contributions to defined contribution schemes
113
113
20,045
20,702
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
167,235
21,603
Other finance costs:
Interest on finance leases and hire purchase contracts
1,473
4,829
168,708
26,432
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
208,729
190,818
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
2023
2022
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
21,527
(9,417)
Total tax charge
230,256
181,401
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
625,052
835,136
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
147,012
158,676
Tax effect of expenses that are not deductible in determining taxable profit
9,260
3,905
Amortisation on assets not qualifying for tax allowances
72,706
21,079
Remeasurement of deferred tax for changes in tax rates
1,278
(2,259)
Taxation charge for the year
230,256
181,401
9
Dividends
2023
2022
£
£
Interim paid
375,000
590,000
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023
5,169,394
Additions
2,649,294
At 31 December 2023
7,818,688
Amortisation and impairment
At 1 January 2023
4,322,136
Amortisation charged for the year
299,542
At 31 December 2023
4,621,678
Carrying amount
At 31 December 2023
3,197,010
At 31 December 2022
847,258
On 1 June 2023 the company acquired the trade and assets of two pharmacies for a combined cost of £2.68m.
11
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 January 2023
2,410,760
309,785
2,720,545
Additions
328,260
171,000
499,260
Disposals
(48,195)
(48,195)
At 31 December 2023
2,739,020
432,590
3,171,610
Depreciation and impairment
At 1 January 2023
2,013,700
185,566
2,199,266
Depreciation charged in the year
177,865
111,385
289,250
Eliminated in respect of disposals
(29,753)
(29,753)
At 31 December 2023
2,191,565
267,198
2,458,763
Carrying amount
At 31 December 2023
547,455
165,392
712,847
At 31 December 2022
397,060
124,219
521,279
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 20 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Fixtures and fittings
16,417
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
722,830
717,990
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,380,885
1,024,385
Corporation tax recoverable
204,368
191,970
Other debtors
1,460,277
1,464,563
Prepayments and accrued income
47,702
82,319
3,093,232
2,763,237
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
162,443
74,667
Obligations under finance leases
16
310
310
Trade creditors
2,045,344
1,790,648
Corporation tax
221,206
190,818
Other taxation and social security
77,943
141,682
Other creditors
292,968
54,218
Accruals and deferred income
333,180
328,435
3,133,394
2,580,778
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Loans and overdrafts
2023
2022
£
£
Bank loans
3,460,561
818,279
Payable within one year
162,443
74,667
Payable after one year
3,298,118
743,612
The loan in the prior year was repaid in May 2023 with a new loan being drawn down. The new term loan is repayable over five years in quarterly instalments. The first twelve months of the loan are an interest repayment only period with no capital repayments being made.
The loan at the reporting date was secured by a floating charge over the assets of the company.
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
310
310
Hire purchase creditors are secured on the asset that they were used to purchase.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
96,099
74,090
Short term timing differences
(752)
(270)
95,347
73,820
2023
Movements in the year:
£
Liability at 1 January 2023
73,820
Charge to profit or loss
21,527
Liability at 31 December 2023
95,347
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
42,442
27,206
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
3
A Ordinary share of £1 each
1
1
1
-
3
3
3
3
The company has two classes of ordinary shares. The company may declare different rates of dividend in respect of each class of share. Ordinary shares have full rights in the company with respect to distributions and voting. A Ordinary shares are only entitled to their nominal value plus 10% on distributions. These shares do not carry voting rights.
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
141,950
140,207
Between two and five years
487,256
425,148
In over five years
492,365
379,205
1,121,571
944,560
21
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
550,969
-
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
22
Related party transactions
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
512,853
511,136
Other information
At 31 December 2023 the company was owed £15,000 (2022: £15,000) by family members of the directors.
There were no other related party transactions during the year or balances at the year end.
23
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
Dividends totalling £375,000 (2022 - £590,000) were paid in the year in respect of shares held by the company's directors.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Loan
-
331,425
412,127
(375,000)
368,552
331,425
412,127
(375,000)
368,552
24
Ultimate controlling party
The company was under control of the directors throughout the year.
HOULIHAN PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
394,796
653,735
Adjustments for:
Taxation charged
230,256
181,401
Finance costs
168,708
26,432
Loss on disposal of tangible fixed assets
6,932
-
Amortisation and impairment of intangible assets
299,542
145,000
Depreciation and impairment of tangible fixed assets
289,250
193,753
Movements in working capital:
Increase in stocks
(4,840)
(222,405)
Increase in debtors
(280,470)
(842,342)
Increase in creditors
434,452
419,680
Cash generated from operations
1,538,626
555,254
26
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,287,990
272,290
1,560,280
Borrowings excluding overdrafts
(818,279)
(2,642,282)
(3,460,561)
Obligations under finance leases
(310)
-
(310)
469,401
(2,369,992)
(1,900,591)
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