Company Registration No. 04980265 (England and Wales)
THE GREENHOUSE PEOPLE LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
THE GREENHOUSE PEOPLE LTD
COMPANY INFORMATION
Directors
Mr R Baggaley
Mr G Killeen
Mr B Machin
Mr J Durose
Mrs NC Baggaley
Secretary
Mrs A Breeze
Company number
04980265
Registered office
Unit 19
Blythe Park
Cresswell
Stoke-on-Trent
Staffordshire
ST11 9RD
Auditor
Geens Limited
Graphic House
124 City Road
Stoke on Trent
ST4 2PH
Bankers
Barclays Bank plc
36 Town Road
Hanley
Stoke-on-Trent
ST1 2JQ
Solicitors
Knights Solicitors PLC
The Brampton
Newcastle under Lyme
Staffordshire
ST5 0QW
THE GREENHOUSE PEOPLE LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
THE GREENHOUSE PEOPLE LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The company has a strong presence in the domestic hobby greenhouse market, and by manufacturing in its Staffordshire factory five of the top greenhouse brands in the UK, the company has developed a prominent position in the market. Since 2019, the company has also diversified into the wooden garden buildings market with a range of cedar summerhouses made in house and a further range of summerhouses, home offices and studios from other manufacturers.
The company sells directly to the public through website and mail order, as well as through a network of over 50 resellers in the UK. In addition, the business has a further 35 of its own operated showsites at some of the top garden centres in the UK. Alongside stable exports in Holland, Germany, Belgium and Finland the company is well placed to maximise its opportunities. This level of vertical integration from manufacturing to point of sale means that the company is in control of both quality and price and gives it a strong position in the market.
Principal risks and uncertainties
The company assess risks and opportunities to the business as a matter of course. These include adapting to new regulations for exports, currency fluctuations and market trends such as energy and potential recession.
We reported here last year that by the end of 2022, the level of inventory had risen considerably (from £6.8m to £11.4m) and that a plan was in place to reduce this over the course of 2023. We are therefore delighted to report that the inventory has been successfully reduced to £8.4m.
This is just one measure of the post covid boom changes that the company has managed.
Key performance indicators
The key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover and gross margins:
The turnover for year 2023 showed a slight reduction in turnover from £31.5m to £26.2m, however, margin increased from 58.2% to 61%. Profits eased back from £5.4m to £4.054m which is 15.4% of turnover. The company had seen a significant level of growth and profitability over the last two years. This was recognised in April 2023 when the company was named as the 86th fastest growing company in the UK in the ORESA growth report 2023.
The company is successfully navigating the tricky task of reducing size after gearing up for the covid boom and both staffing numbers and overhead continue to fall. We therefore can reasonably expect a return to growth in profits in 2024.
Mr R Baggaley
Director
18 September 2024
THE GREENHOUSE PEOPLE LTD
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 manufacture and sale of greenhouses and garden buildings.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends £3.2m were paid during the year. The directors do not recommend the 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 R Baggaley
Mr G Killeen
Mr B Machin
Mr J Durose
Mrs NC Baggaley
Auditor
The auditor, Geens Limited, 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the 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.
THE GREENHOUSE PEOPLE LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr R Baggaley
Director
18 September 2024
THE GREENHOUSE PEOPLE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THE GREENHOUSE PEOPLE LTD
- 4 -
Opinion
We have audited the financial statements of The Greenhouse People Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, 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.
THE GREENHOUSE PEOPLE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THE GREENHOUSE PEOPLE LTD (CONTINUED)
- 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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management and from our knowledge and experience of the client and businesses in similar sectors;
we assessed the extent of compliance with the laws and regulations identified through making enquiries of management and inspecting any available legal correspondence; and
the audit team were in regular communication in relation to laws and regulations and potential instances of non-compliance throughout the audit
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
THE GREENHOUSE PEOPLE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THE GREENHOUSE PEOPLE LTD (CONTINUED)
- 6 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias: and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigations and claims;
reviewing legal and professional expenses for ongoing litigation work: and
reviewing correspondence with HMRC.
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. The 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Karen Staley FCA BSc (Hons)
Senior Statutory Auditor
For and on behalf of Geens Limited
18 September 2024
Chartered Accountants
Statutory Auditor
Graphic House
124 City Road
Stoke on Trent
ST4 2PH
THE GREENHOUSE PEOPLE LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
26,209,950
31,558,641
Cost of sales
(10,220,841)
(13,186,995)
Gross profit
15,989,109
18,371,646
Administrative expenses
(12,299,600)
(13,476,795)
Other operating income
93,837
103,956
Operating profit
4
3,783,346
4,998,807
Interest receivable and similar income
7
273,191
419,600
Interest payable and similar expenses
8
(1,588)
(691)
Profit before taxation
4,054,949
5,417,716
Tax on profit
9
(866,945)
(926,785)
Profit for the financial year
3,188,004
4,490,931
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE GREENHOUSE PEOPLE LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
3,000
Tangible assets
12
1,616,159
1,681,478
Investments
13
52,174
52,174
1,668,333
1,736,652
Current assets
Stocks
15
8,241,379
11,451,777
Debtors
16
554,020
588,742
Cash at bank and in hand
2,928,183
1,148,860
11,723,582
13,189,379
Creditors: amounts falling due within one year
17
(3,081,594)
(4,623,332)
Net current assets
8,641,988
8,566,047
Total assets less current liabilities
10,310,321
10,302,699
Creditors: amounts falling due after more than one year
18
(3,737)
(18,545)
Provisions for liabilities
Deferred tax liability
19
385,185
350,759
(385,185)
(350,759)
Net assets
9,921,399
9,933,395
Capital and reserves
Called up share capital
21
2
2
Profit and loss reserves
9,921,397
9,933,393
Total equity
9,921,399
9,933,395
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 19 September 2024 and are signed on its behalf by:
Mr R Baggaley
Mrs NC Baggaley
Director
Director
Company registration number 04980265 (England and Wales)
THE GREENHOUSE PEOPLE LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
2
6,442,462
6,442,464
Year ended 31 December 2022:
Profit and total comprehensive income
-
4,490,931
4,490,931
Dividends
10
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
2
9,933,393
9,933,395
Year ended 31 December 2023:
Profit and total comprehensive income
-
3,188,004
3,188,004
Dividends
10
-
(3,200,000)
(3,200,000)
Balance at 31 December 2023
2
9,921,397
9,921,399
THE GREENHOUSE PEOPLE LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
5,988,189
2,110,956
Interest paid
(1,588)
(691)
Income taxes paid
(643,676)
(1,010,890)
Net cash inflow from operating activities
5,342,925
1,099,375
Investing activities
Purchase of tangible fixed assets
(810,111)
(1,060,746)
Proceeds from disposal of tangible fixed assets
194,976
44,160
Repayment of loans
770,000
Interest received
9,191
Dividends received
264,000
419,600
Net cash (used in)/generated from investing activities
(341,944)
173,014
Financing activities
Payment of finance leases obligations
(21,658)
42,660
Dividends paid
(3,200,000)
(1,000,000)
Net cash used in financing activities
(3,221,658)
(957,340)
Net increase in cash and cash equivalents
1,779,323
315,049
Cash and cash equivalents at beginning of year
1,148,860
833,811
Cash and cash equivalents at end of year
2,928,183
1,148,860
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
The Greenhouse People Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 19, Blythe Park, Cresswell, Stoke-on-Trent, Staffordshire, ST11 9RD.
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.
This 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:
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’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of TGP Holdings Limited. These consolidated financial statements are available from The Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for the sale of goods and services net of VAT and trade discounts. It also represents commission earnt from the sale of greenhouses as an agent.
Revenue from the sale of goods is recognised when the goods have been dispatched and the risk and rewards have passed to the customer.
Commission is recognised at the point of sale when a deposit is taken.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected useful life which has been considered by the directors to be 20 years.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Intellectual property
over 4 years
The intellectual property is fully amortised and the net book value as at 31 December 2023 is £nil.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Cost includes the original purchase price, and costs directly attributable to bringing the asset to its working condition for its intended use.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% reducing balance and 25% straight line
Fixtures, fittings & equipment
25% reducing balance and 33.33% reducing balance
Sites & leasehold improvements
33.33% straight line
Motor vehicles
25% reducing balance
Integral features
25% reducing balance
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 credited or charged to profit or loss.
Repairs, maintenance and minor inspection costs are expensed as incurred.
1.7
Fixed asset investments
Interests in a jointly controlled entity are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investment in the joint venture are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
The company does not hold interest in any subsidiary or associate companies.
1.8
Impairment of fixed assets
At each reporting end date, an assessment is made for impairment. Any excess of the carrying amount of tangible fixed assets over its estimated recoverable amount is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Cost is based on the cost of the purchase on a first in, first out basis.
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.
1.10
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 balance sheet 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 trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs 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.
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.
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. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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 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.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
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 though 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.
1.11
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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. Such liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to 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 leases asset are consumed.
1.16
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.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
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.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of the property plant and equipment, and note 1.6 for the useful economic lives of each asset.
Stock provisioning
The company supplies greenhouses and ancillary products. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock , as well as applying assumptions around anticipated saleability of finished goods. See note 15 for the net carrying amount of the stock and associated provision.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the ageing profile of debtors and historical experience. See note 16 for the net carrying amount of the debtors and associated impairment provision.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
25,253,548
30,390,341
Europe
956,402
1,168,300
26,209,950
31,558,641
2023
2022
£
£
Other revenue
Interest income
9,191
-
Dividends received
264,000
419,600
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
236
116,741
Fees payable to the company's auditor for the audit of the company's financial statements
21,500
20,500
Depreciation of owned tangible fixed assets
618,948
607,140
Depreciation of tangible fixed assets held under finance leases
49,546
42,108
Loss on disposal of tangible fixed assets
11,960
3,889
Amortisation of intangible assets
3,000
3,000
Operating lease charges
1,665,111
1,607,203
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
69
91
Sales, accounts & administration
108
110
Directors
5
5
Total
182
206
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,912,968
6,322,393
Social security costs
592,581
666,965
Pension costs
243,546
354,081
6,749,095
7,343,439
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
423,335
564,322
Company pension contributions to defined contribution schemes
113,771
187,832
537,106
752,154
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2022 - 5).
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
144,413
196,260
Company pension contributions to defined contribution schemes
13,378
1,987
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
5,515
Other interest income
3,676
Total interest revenue
9,191
Income from fixed asset investments
Income from shares in group undertakings
264,000
419,600
Total income
273,191
419,600
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
1,588
691
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
891,000
783,537
Adjustments in respect of prior periods
(58,481)
(33,150)
Total current tax
832,519
750,387
Deferred tax
Origination and reversal of timing differences
34,426
176,398
Total tax charge
866,945
926,785
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 19 -
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
4,054,949
5,417,716
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
953,724
1,029,366
Tax effect of expenses that are not deductible in determining taxable profit
8,444
6,606
Effect of change in corporation tax rate
2,130
Permanent capital allowances in excess of depreciation
(2,793)
(55,815)
Depreciation on assets not qualifying for tax allowances
26,014
21,017
Research and development tax credit
(50,296)
Under/(over) provided in prior years
(58,481)
(33,150)
Deferred tax adjustments in respect of prior years
4,599
Dividend income
(62,093)
(79,724)
Deferred tax at future rate of 25%
84,182
Taxation charge for the year
866,945
926,785
10
Dividends
2023
2022
£
£
Interim paid
3,200,000
1,000,000
11
Intangible fixed assets
Goodwill
Intellectual property
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
65,000
149,000
214,000
Amortisation and impairment
At 1 January 2023
62,000
149,000
211,000
Amortisation charged for the year
3,000
3,000
At 31 December 2023
65,000
149,000
214,000
Carrying amount
At 31 December 2023
At 31 December 2022
3,000
3,000
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Sites & leasehold improvements
Motor vehicles
Integral features
Total
£
£
£
£
£
£
Cost
At 1 January 2023
2,818,112
338,627
333,676
689,222
26,040
4,205,677
Additions
371,478
410,383
28,250
810,111
Disposals
(6,000)
(13,820)
(385,354)
(405,174)
At 31 December 2023
3,183,590
324,807
333,676
714,251
54,290
4,610,614
Depreciation and impairment
At 1 January 2023
1,683,011
225,009
221,230
389,741
5,208
2,524,199
Depreciation charged in the year
382,288
36,495
110,602
126,839
12,270
668,494
Eliminated in respect of disposals
(5,662)
(9,725)
(182,851)
(198,238)
At 31 December 2023
2,059,637
251,779
331,832
333,729
17,478
2,994,455
Carrying amount
At 31 December 2023
1,123,953
73,028
1,844
380,522
36,812
1,616,159
At 31 December 2022
1,135,101
113,618
112,446
299,481
20,832
1,681,478
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
£
£
Motor vehicles
148,642
126,625
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in joint ventures
14
52,174
52,174
14
Joint ventures
Details of the company's joint ventures at 31 December 2023 are as follows:
Name of undertaking
Interest
% Held
held
Direct
JTB P.D.
Netherlands
Ordinary
50.00
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
8,241,379
11,451,777
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
302,878
291,919
Other debtors
24,107
24,107
Prepayments and accrued income
227,035
272,716
554,020
588,742
17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
25,129
31,979
Trade creditors
481,371
880,615
Amounts owed to group undertakings
958,079
2,458,079
Corporation tax
253,527
64,684
Other taxation and social security
414,715
347,260
Other creditors
843,266
732,434
Accruals and deferred income
105,507
108,281
3,081,594
4,623,332
The items included under finance leases are secured by the lessor over the assets to which they relate..
18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
3,737
18,545
The items included under finance leases are secured by the lessor over the leased assets.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
385,185
350,759
2023
Movements in the year:
£
Liability at 1 January 2023
350,759
Charge to profit or loss
34,426
Liability at 31 December 2023
385,185
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
243,546
354,081
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.
As at the year end there was an amount outstanding in respect of pension contributions which amounted to £13,971 (2022: £5,197).
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
22
Guarantee
The company has provided a cross guarantee and debenture for its parent company TGP Holdings Limited. There is no expectation that this will be called upon.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
23
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
884,317
768,978
Between two and five years
1,243,181
1,771,858
2,127,498
2,540,836
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
2023
2022
£
£
Entities over which the entity has control, joint control or significant influence
1,116,052
7,643,343
Provision of services
2023
2022
£
£
Entities over which the entity has control, joint control or significant influence
93,104
92,346
25
Ultimate controlling party
TGP Holdings Limited is regarded as this company's ultimate controlling party by virtue of its 100% shareholding.
The consolidated financial statements of TGP Holdings Limited are available to the public and may be obtained from The Registrar of Companies. Companies House, Crown Way, Cardiff, CF14 3UZ. The registered office address of TGP Holdings Limited is Unit 19, Blythe Park, Cresswell, Stoke-on-Trent, Staffordshire, ST11 9RD.
THE GREENHOUSE PEOPLE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
3,188,004
4,490,931
Adjustments for:
Taxation charged
866,945
926,785
Finance costs
1,588
691
Investment income
(273,191)
(419,600)
Loss on disposal of tangible fixed assets
11,960
3,889
Amortisation and impairment of intangible assets
3,000
3,000
Depreciation and impairment of tangible fixed assets
668,494
649,248
Movements in working capital:
Decrease/(increase) in stocks
3,210,398
(4,569,452)
Decrease in debtors
34,722
937,396
(Decrease)/increase in creditors
(1,723,731)
88,068
Cash generated from operations
5,988,189
2,110,956
27
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,148,860
1,779,323
2,928,183
Obligations under finance leases
(50,524)
21,658
(28,866)
1,098,336
1,800,981
2,899,317
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