The directors present their strategic report for the year ended 31 December 2023.
The principal activity of ITAB Holdings UK Ltd is that of a holding company.
It owns 100% of the shares of the following group companies:-
- ITAB UK Ltd
- ITAB Interiors Ltd
ITAB Prolight UK Limited and Maxted Holdings Limited were dissolved in the year.
Furthermore it provides management services and advice to the company’s Swedish parent company and its other subsidiaries, including ITAB Shop Products UK Ltd.
The trading company within the above is ITAB UK Ltd, the remaining companies are dormant or non-trading and remaining assets are still in the process of being realised. ITAB UK Ltd provide a complete shopfitting solution for major retailers. This offer includes standard and bespoke retail display equipment, innovative solutions for the checkout arena, professional lighting systems and interior fit-outs. This wide product and service offering enable the company, in conjunction with its sister companies, to provide innovative solutions to customer needs. These companies are part of a much larger group which offer shopfitting solutions worldwide.
The profit after taxation, is £519,108 (2022: £17,295). A dividend of £1,000,000 (2022: £nil) was paid during the year.
As a holding company the company's key financial indicator during the year is the performance of its trading subsidiary. The results were as follows:
Profit before tax 2023 2022 Movement
£'000 £'000 £'000
ITAB UK Ltd 1,263 2,656 (1,393)
The trading company, ITAB UK Ltd, works primarily in the retail sector. Its sales are typically subject to annual tenders by its customers and the loss of a major contract would impact sales. Furthermore, sales are affected by its customer's capital expenditure programmes and changes in these would impact sales. The trading company, ITAB UK Ltd, looks to minimise these risks by continually reviewing and updating its product and service offer, and seeking to reach a wider customer base.
Exposure to credit, liquidity and price risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Company policies are aimed at minimising such losses, and require that deferred terms are only granted to customers who have reliable payment history and satisfy credit checks. The trading company, ITAB UK Ltd, supplies mainly blue chip retailers and accordingly this risk is minimised as much as possible. Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations as they fall due. The company mitigates liquidity risk by managing cash generation by its operations and has considerable financial resources available through its larger group. Price risk arises on material and labour prices but this is managed by close price monitoring, tendering and contractual terms.
Exposure to currency risks
The trading company, ITAB UK Ltd, purchase products from overseas and as such are subject to some currency risk primarily around the Euro and US dollar. This is reviewed each year and if cash flows are considered sufficiently certain then hedging will be considered.
In preparing these financial statements, the directors have assessed the ability of the company to continue to operate for the period of at least twelve months from the date of signing the financial statements.
The directors undertook a risk assessment and forecasting exercise to assess the company's liquidity position. The assessments include performing cashflow sensitivity analysis focusing on income and cost levels. In addition, reverse stress testing is performed to assess the levels of performance where cash availability would breach. The results of this analysis continues to demonstrate that there is sufficient cash availability.
Based on current trading performance, and the sensitivity and reverse stress testing performed, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for a period of at least twelve months from the date of signing these financial statements and accordingly they continue to adopt the going concern basis in preparing these financial statements.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
Dividends
The total distribution of dividends for the year ended 31 December 2023 was £1,000,000 (2022: £nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company and its subsidiaries (the group) finance their activities with a combination of cash, bank loans, intercompany loans and operating leases. Overdrafts are used to satisfy short term cash flow requirements. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the company's operating activities.
Financial instruments give rise to foreign currency, credit price and liquidity risk. In accordance with S414C (11) of the Companies Act 2006, the directors have presented information on financial risk management objectives and policies in the strategic report.
Future developments
The company's subsidiary ITAB UK Ltd continues to market ITAB's wide product and service offer to the retail community. The directors expect it to make satisfactory profits in 2024.
Indemnity provision for directors
The group to which the company belongs has provided qualifying indemnity provisions in respect of the directors which were in force during the year.
Basis for opinion
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as the cost of living crisis and the impact of the war in Ukraine, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.
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.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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.
Matters on which we are required to report under the Companies Act 2006
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.
As explained more fully in the directors' responsibilities statement set out on page 4, 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.
The assessment of the appropriateness of the collective competence and capabilities of the engagement team including consideration of the engagement team’s:
understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation;
knowledge of the industry in which the client operates; and
understanding of the legal and regulatory requirements specific to the entity including, the provisions of the applicable legislation and the applicable statutory provision.
We communicated relevant laws and regulations and potential fraud risks to all engagement team members. We remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The financial statements of ITAB Holdings UK Ltd (the "company") for the year ended 31 December 2023 were authorised for issue by the board of directors on 14 May 2024 and the balance sheet was signed on the board's behalf by R T French. ITAB UK Ltd is registered and domiciled in England and Wales.
The principal accounting policies adopted by the Company are specified below.
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 £.
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; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of ITAB Shop Concept AB. These consolidated financial statements are available from its registered office, Box 9054, 550 09 Jönköping.
Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of judgements, estimations and assumptions means that actual outcomes could differ.
Critical accounting judgements in applying the company's accounting policies
Management do not consider there to be any areas of critical judgement.
Sources of estimation uncertainty:
Bad debt provisions are based on the likely recovery of debtor balances.
Investments in subsidiary undertakings are recognised at cost less any provision for impairment.
In preparing these financial statements, the directors have assessed the ability of the company to continue to operate for the period of at least twelve months from the date of signing the financial statements.
The directors have undertaken a risk assessment and forecasting exercise to assess the company's liquidity position in response to the impact of rising inflation and reduced customer activity. The assessment included performing cash flow sensitivity analysis focusing on sales levels. In addition, reverse stress testing is performed to assess the levels of performance where cash availability would breach. The results of this analysis demonstrated that there is sufficient cash availability.
Based on current trading performance of the group companies, and the sensitivity and reverse stress testing performed, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for a period of at least twelve months from the date of signing these financial statements and accordingly they continue to adopt the going concern basis in preparing these financial statements.
Impairment of non-financial assets
At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired. If there is such an indication the recoverable amount of the asset is compared to the carrying amount of the asset.
The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the assets continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk free rate and the risks inherent in the asset.
If the recoverable amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the statement of comprehensive income, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised within profit or loss.
If an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the statement of comprehensive income.
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, and loans to and from related companies.
Debt instruments (other than those wholly receivable or payable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade creditors and debtors, are measured initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in the case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive income.
For financial assets recognised at amortised cost, the impairment loss is measured at the difference between the asset's carrying amount and the present value of estimated cashflows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective rate determined under the contract.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
The company operates a defined contribution pension scheme and the pension charge represents amounts payable by the company to the fund. The assets of the scheme are held separately from those of the company in an independently administered fund.
Interest payable and similar expenses
Interest payable and similar expenses are charged to the statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
The average monthly number of persons (including directors) employed by the company during the year was:
The directors of the company are also directors of other undertakings within the ITAB group of which ITAB Holdings UK Ltd is a subsidiary. The directors' remuneration for the year was paid by other undertakings and the directors have concluded that none of this remuneration relates to their incidental services to the company in the current year (2022: £Nil).
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:
Details of the company's subsidiaries at 31 December 2023 are as follows:
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
Amounts owed to group companies are unsecured, interest free and repayable on demand.
A debenture incorporating a fixed and floating charge as security over the assets and undertakings of the company is in existence in favour of the bank.
Minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company has one class of ordinary shares which carry no right to fixed income.
Share Premium
Where shares were issued at a value higher than their nominal value, the difference is transferred to the share premium account.
Capital Redemption Reserve
A non-distributable reserve created upon the buy-back by the company of its own shares.
Capital Contribution
This represents amounts forwarded to the company by its owner as part of an ongoing obligation to fund the entity.
ITAB Shop Concept AB (incorporated in Sweden) is regarded by the directors as being the company's ultimate parent company.
The largest and smallest group in which the results of the company are consolidated is that headed by ITAB Shop Concept AB.
Copies of ITAB Shop Concept AB financial statements can be obtained from the company secretary at Box 9054, SE-550. 09 Jönköping, Sweden.
The company has taken advantage of exemptions under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.