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Registered number: 08603972









Continental Textiles (Group) Limited









Annual report and Consolidated Financial Statements

For the year ended 31 December 2023

 
Continental Textiles (Group) Limited
 
 
Company Information


Directors
Mr A D Crewe 
Mr J A Crewe 
Mr J P Crewe 
Mrs L Ellis 
Mr P F Crewe 




Registered number
08603972



Registered office
3 Avocado Court
Commerce Way

Trafford Park

Manchester

M17 1HW




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Exchange Square

Railway Road

Stockport

Cheshire

SK1 3GG





 
Continental Textiles (Group) Limited
 

Contents



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Consolidated Statement of Comprehensive Income
 
9
Consolidated Balance Sheet
 
10
Company Balance Sheet
 
11
Consolidated Statement of Changes in Equity
 
12
Company Statement of Changes in Equity
 
13
Consolidated Statement of Cash Flows
 
14
Consolidated Analysis of Net Debt
 
15
Notes to the Financial Statements
 
16 - 32


 
Continental Textiles (Group) Limited
 
 
Group strategic report
For the year ended 31 December 2023

Introduction
 
This strategic report provides an overview of the Group's performance and key developments during the year ended 31 December 2023. The report focuses on financial performance, market trends, and the Group's overall strategy. Additionally, it outlines the Group's goals for the future and highlights areas for improvement.

Business review
 
The principal activity of the business is importing garments, accessories and footwear under company and customer’s brands.
The company's turnover for the year decreased to £10,883,473 from £13,133,589 in the previous year. 
The Gross Profit decreased to £3,174,989 from £4,454,622 in the previous year. The Gross Profit Margin reduced to 29.17% from 33.92% in the previous year.
The figures are in line with expectation, they reflect the challenging business environment and strategic shift in business model. 
Principal risks and uncertainties
Economic uncertainty continued to affect consumer spending patterns, resulting in reduced sales across key outlets and stock levels remaining high. 
The shift towards B2C marketplace online selling reflects broader changes in consumer preferences, technological adoption, and market dynamics.
The company are managing a transition strategy from a B2B to a hybrid B2C business model to achieve sustainable long-term growth. This shift will enable the company to diversify revenue streams, tap into larger markets and increase brand recognition.
A short-term reduction in margins during the transition to a B2C model is an expected outcome. It reflects necessary investments and increases in operational costs. 
The B2C model involves increased stock holdings in multiple locations selling on multiple platforms, increasing operational complexities.
Technological advancements including integrations with customers and 3PL present opportunity for growth and efficiency but also require the company to adapt to new software and processes in the short team. 
The company initiated a significant upgrade of its ERP software to enhance efficiency and accuracy whilst also enabling future integrations with both customer and 3PL software. 
Focussed on key areas, this is a strategic necessity and a crucial investment in our future growth.

Page 1

 
Continental Textiles (Group) Limited
 

Group strategic report (continued)
For the year ended 31 December 2023

Overall strategy
 
Customer: The company seeks to nurture and retain its customer base while pursuing a global growth strategy across B2C and B2B environments.
Product: The utilisation of strong brand identities whilst raising awareness of all brands through an elevated marketing strategy.
Digital Efficiencies: The focus continues to be on leveraging technology to streamline processes and enhance overall performance.

Financial key performance indicators
 
The Group's key financial performance indicators during the year were as follows:
 

2023
2022

£
£
Turnover
10,883,473
13,133,589
Gross profit
3,174,989
4,454,622
Gross profit margin %
29.2%
33.9%
Operating profit
802,879
2,138,478
Operating profit margin %
7.4%
16.3%


Other key performance indicators
 
Management continue to monitor both financial and non-financial KPIs. 
Non-financial KPIs include:

Sales analysis including returns and sell through rates
Shipping analysis including carrier performance metrics 
Logistics including dispatch and return processing 
Marketing including social media engagement




This report was approved by the board and signed on its behalf.



Mr J A Crewe
Director

Date: 12 September 2024

Page 2

 
Continental Textiles (Group) Limited
 
 
 
Directors' report
For the year ended 31 December 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
 
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £536,741 (2022 -£1,587,849).

Dividends of £600,000 (2022: £1,097,500) were paid during the year.
The directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

Mr A D Crewe 
Mr J A Crewe 
Mr J P Crewe 
Mrs L Ellis 
Mr P F Crewe 

Page 3

 
Continental Textiles (Group) Limited
 
 
 
Directors' report (continued)
For the year ended 31 December 2023

Future developments

In 2023 the company launched a direct to consumer website for its leading brand South Beach. This will be followed by the launch of a further direct to consumer website for the Loungeable brand in 2024. Both channels offer a variety of benefits and opportunities including building brand awareness and presence both in the UK and internationally whilst retaining control of the product and price.
The company’s brands are proceeding to launch on new 3rd party marketplace platforms and territories in 2024, expanding the product offering in the UK and European markets.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





Mr J A Crewe
Director

Date: 12 September 2024

Page 4

 
Continental Textiles (Group) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Group) Limited
 

Opinion


We have audited the financial statements of Continental Textiles (Group) Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Group Statement of comprehensive income, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' report thereon.  The directors are responsible for the other information contained within the Annual Report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.  If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.  If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 5

 
Continental Textiles (Group) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Group) Limited (continued)


Opinion 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 Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Auditors' 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and
then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
 
Page 6

 
Continental Textiles (Group) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Group) Limited (continued)


Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non compliance with laws and regulations, we considered the following:
 
The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
The outcome of enquiries of management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. 
Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.

Audit response to risks identified
Our procedures to respond to the risks identified included the following:
 
Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
Enquiring of management about any actual and potential litigation and claims.
Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.

We have also considered the risk of fraud through management override of controls by:
 
Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Page 7

 
Continental Textiles (Group) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Group) Limited (continued)



A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Tim Potter (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
3 Exchange Square
Railway Road
Stockport
Cheshire
SK1 3GG

12 September 2024
Page 8

 
Continental Textiles (Group) Limited
 
 
Consolidated statement of comprehensive income
For the year ended 31 December 2023

2023
2022
Note
£
£

  

Turnover
 4 
10,883,473
13,133,589

Cost of sales
  
(7,708,484)
(8,678,967)

Gross profit
  
3,174,989
4,454,622

Administrative expenses
  
(2,372,110)
(2,316,144)

Operating profit
  
802,879
2,138,478

Interest receivable and similar income
 8 
47,554
-

Interest payable and similar expenses
 9 
(46,094)
(51,500)

Profit before tax
  
804,339
2,086,978

Tax on profit
 10 
(267,598)
(499,129)

Profit for the financial year
  
536,741
1,587,849

Profit for the year attributable to:
  

Owners of the parent company
  
536,741
1,587,849

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 16 to 32 form part of these financial statements.

Page 9

 
Continental Textiles (Group) Limited
Registered number: 08603972

Consolidated balance sheet
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
-
271,631

Tangible assets
 13 
1,166,022
1,200,322

  
1,166,022
1,471,953

Current assets
  

Stocks
 15 
859,084
730,797

Debtors: amounts falling due within one year
 16 
2,880,427
3,738,596

Cash at bank and in hand
 17 
1,572,284
976,846

  
5,311,795
5,446,239

Creditors: amounts falling due within one year
 18 
(1,193,950)
(1,496,480)

Net current assets
  
 
 
4,117,845
 
 
3,949,759

Total assets less current liabilities
  
5,283,867
5,421,712

Creditors: amounts falling due after more than one year
 19 
(467,492)
(549,277)

Provisions for liabilities
  

Deferred tax
 21 
(25,735)
(18,536)

Net assets
  
4,790,640
4,853,899


Capital and reserves
  

Called up share capital 
 22 
2,590,970
2,590,970

Profit and loss account
 23 
2,199,670
2,262,929

  
4,790,640
4,853,899


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Mr J A Crewe
Director

Date: 12 September 2024

The notes on pages 16 to 32 form part of these financial statements.

Page 10

 
Continental Textiles (Group) Limited
Registered number: 08603972

Company balance sheet
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 14 
4,420,000
4,420,000

Current assets
  

Debtors: amounts falling due within one year
 16 
355,609
355,609

Total assets less current liabilities
  
 
 
4,775,609
 
 
4,775,609

  

  

Net assets
  
4,775,609
4,775,609


Capital and reserves
  

Called up share capital 
 22 
2,590,970
2,590,970

Profit and loss account brought forward
  
2,184,639
2,184,639

Profit for the year
  
600,000
1,097,500

Dividends paid

 11 

(600,000)
(1,097,500)

Profit and loss account carried forward
  
2,184,639
2,184,639

  
4,775,609
4,775,609


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


Mr J A Crewe
Director

Date: 12 September 2024

The notes on pages 16 to 32 form part of these financial statements.

Page 11

 
Continental Textiles (Group) Limited
 

Consolidated statement of changes in equity
For the year ended 31 December 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
2,590,970
1,772,580
4,363,550


Comprehensive income for the year

Profit for the year
-
1,587,849
1,587,849


Contributions by and distributions to owners

Dividends: Equity capital
-
(1,097,500)
(1,097,500)



At 1 January 2023
2,590,970
2,262,929
4,853,899


Comprehensive income for the year

Profit for the year
-
536,741
536,741


Contributions by and distributions to owners

Dividends: Equity capital
-
(600,000)
(600,000)


At 31 December 2023
2,590,970
2,199,670
4,790,640


The notes on pages 16 to 32 form part of these financial statements.

Page 12

 
Continental Textiles (Group) Limited
 

Company statement of changes in equity
For the year ended 31 December 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
2,590,970
2,184,639
4,775,609


Comprehensive income for the year

Profit for the year
-
1,097,500
1,097,500


Contributions by and distributions to owners

Dividends: Equity capital
-
(1,097,500)
(1,097,500)



At 1 January 2023
2,590,970
2,184,639
4,775,609


Comprehensive income for the year

Profit for the year
-
600,000
600,000


Contributions by and distributions to owners

Dividends: Equity capital
-
(600,000)
(600,000)


At 31 December 2023
2,590,970
2,184,639
4,775,609


The notes on pages 16 to 32 form part of these financial statements.

Page 13

 
Continental Textiles (Group) Limited
 

Consolidated statement of cash flows
For the year ended 31 December 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
536,741
1,587,849

Adjustments for:

Amortisation of intangible assets
271,631
465,654

Depreciation of tangible assets
64,724
68,758

Loss on disposal of tangible assets
(9,800)
-

Interest paid
46,094
51,500

Interest received
(47,554)
-

Taxation charge
267,598
499,129

Increase in stocks
(128,287)
(71,464)

Decrease in debtors
858,169
1,012,181

Increase/(decrease) in creditors
22,035
(930,735)

Corporation tax
(587,497)
(455,808)

Net cash generated from operating activities

1,293,854
2,227,064


Cash flows from investing activities

Purchase of intangible fixed assets
-
(22,014)

Purchase of tangible fixed assets
(30,424)
-

Sale of tangible fixed assets
9,800
-

Interest received
47,554
-

Net cash from/(used) investing activities

26,930
(22,014)

Cash flows from financing activities

Repayment of loans
(79,252)
(55,218)

Movements on invoice discounting
-
(794,596)

Dividends paid
(600,000)
(1,097,500)

Interest paid
(46,094)
(51,500)

Net cash used in financing activities
(725,346)
(1,998,814)

Net increase in cash and cash equivalents
595,438
206,236

Cash and cash equivalents at beginning of year
976,846
770,610

Cash and cash equivalents at the end of year
1,572,284
976,846


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,572,284
976,846


The notes on pages 16 to 32 form part of these financial statements.

Page 14

 
Continental Textiles (Group) Limited
 

Consolidated Analysis of Net Debt
For the year ended 31 December 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

976,846

595,438

1,572,284

Debt due after 1 year

(549,277)

81,785

(467,492)

Debt due within 1 year

(182,149)

100,359

(81,790)


245,420
777,582
1,023,002

The notes on pages 16 to 32 form part of these financial statements.

Page 15

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

1.


General information

Continental Textiles (Group) Limited is a private company limited by share capital and incorporated in England. The company registration number is 08603972. The address of the registered office and principal place of business is 3 Avocado Court, Commerce Way, Trafford Park, Manchester, M17 1HW.
The nature of the group's operations and its principal activity is the wholesale of clothing and footwear.
The Group consists of Continental Textiles (Group) Limited and all its subsidiaries.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 16

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Page 17

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.5

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to profit or loss 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.

 
2.8

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 18

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.10

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis, over 10 years,  to the Consolidated statement of comprehensive income over its useful economic life.

Page 19

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
4%
straight line
Leasehold improvements
-
straight line over the term of the lease
Plant and machinery
-
15%
straight line
Motor vehicles
-
20%
straight line
Fixtures and fittings
-
15%
straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.14

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 20

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.15

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.16

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.17

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of comprehensive income.

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.

 
2.18

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make judgements and estimates that affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the reporting period. Actual outcomes may differ from these judgements, estimates and assumptions. 
The directors believe that judgements, estimate and assumptions do not have a significant risk of causing a material difference to the carrying amount of the assets and liabilities within the next financial year. 

Page 21

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

4.


Turnover

The whole of the turnover is attributable to the principal activity of the group, as described in note 1.

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
7,102,555
9,488,874

Rest of Europe
1,750,062
1,711,851

Rest of the world
2,030,856
1,932,864

10,883,473
13,133,589



5.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
14,900
13,545

All other services
3,300
3,515

Page 22

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

6.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
2023
2022
£
£


Wages and salaries
1,016,401
1,075,918

Social security costs
98,655
104,895

Cost of defined contribution scheme
43,183
41,337

1,158,239
1,222,150


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Management
5
5



Administration & Shipping
14
14



Buying & Technology
10
10



Design & Marketing
5
5

34
34

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL).

7.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
245,402
233,181

Group contributions to defined contribution pension schemes
27,600
31,854

273,002
265,035


During the year retirement benefits were accruing to 3 directors (2022 -3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £63,463 (2022 -£83,800).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 -£310).

Page 23

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

8.


Interest receivable

2023
2022
£
£


Other interest receivable
47,554
-


9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
18,661
44,476

Other interest payable
27,433
7,024

46,094
51,500

Page 24

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
260,399
487,497

Deferred tax


Origination and reversal of timing differences
7,199
11,632


Taxation on profit on ordinary activities
267,598
499,129

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 -higher than) the standard rate of corporation tax in the UK of 23.52% (2022 -19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
804,339
2,086,978


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
189,181
396,526

Effects of:


Non-tax deductible amortisation of goodwill
63,888
88,474

Expenses not deductible for tax purposes
1,295
812

Depreciation on ineligible assets
12,802
10,342

Change in tax rates
432
4,449

Super deduction
-
(1,474)

Total tax charge for the year
267,598
499,129


Factors that may affect future tax charges

There are currently no factors that will affect future tax charges


11.


Dividends

2023
2022
£
£


Dividends paid
600,000
1,097,500

Page 25

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

12.


Intangible assets

Group and Company





Goodwill

£



Cost


At 1 January 2023
4,656,540



At 31 December 2023

4,656,540



Amortisation


At 1 January 2023
4,384,909


Charge for the year
271,631



At 31 December 2023

4,656,540



Net book value



At 31 December 2023
-



At 31 December 2022
271,631

Amortisation of intangible assets is included in administrative expenses.



Page 26

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

13.


Tangible fixed assets

Group






Freehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
1,155,500
-
58,984
216,602
1,431,086


Additions
-
30,424
-
-
30,424


Disposals
-
-
(30,994)
-
(30,994)



At 31 December 2023

1,155,500
30,424
27,990
216,602
1,430,516



Depreciation


At 1 January 2023
138,660
-
58,984
33,120
230,764


Charge for the year
46,220
1,944
-
16,560
64,724


Disposals
-
-
(30,994)
-
(30,994)



At 31 December 2023

184,880
1,944
27,990
49,680
264,494



Net book value



At 31 December 2023
970,620
28,480
-
166,922
1,166,022



At 31 December 2022
1,016,840
-
-
183,482
1,200,322

The Company has no tangible fixed assets.

Page 27

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
4,420,000



At 31 December 2023
4,420,000





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Continental Textiles (Holdings) Limited
3 Avocado Court, Commerce Way, Trafford Park, Manchester, M17 1HW.
Ordinary
100%
Sprint Group Limited
3 Avocado Court, Commerce Way, Trafford Park, Manchester, M17 1HW.
Ordinary
100%
Continental Textiles (Manchester) Limited
3 Avocado Court, Commerce Way, Trafford Park, Manchester, M17 1HW.
Ordinary
100%


15.


Stocks

Group
Group
2023
2022
£
£

Finished goods and goods for resale
859,084
730,797


Page 28

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

16.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
2,391,478
2,562,308
-
-

Amounts owed by group undertakings
-
-
354,609
354,609

Other debtors
456,403
1,135,253
-
-

Called up share capital not paid
2,000
2,000
1,000
1,000

Prepayments and accrued income
30,546
39,035
-
-

2,880,427
3,738,596
355,609
355,609


A charge of £87,491 (2022: £31,415) was made to the Statement of comprehensive income during the year in respect of doubtful debts.


17.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
1,572,284
976,846
-
-



18.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans
81,785
79,252
-
-

Trade creditors
251,808
253,154
-
-

Corporation tax
167,432
494,530
-
-

Other taxation and social security
147,373
70,627
-
-

Other creditors
34,198
133,430
-
-

Accruals and deferred income
511,354
465,487
-
-

1,193,950
1,496,480
-
-


Advances from invoice discounting are secured against stocks and trade debtors of the company.
Bank overdrafts are secured by means of fixed and floating charges over the assets of the company.
On 14th February 2020 a bank loan totalling £840,000 was taken out and is secured by means of charges over the Group's freehold property. The related interest rate is 3.15% until February 2025. The loan is repaid on a monthly basis.

Page 29

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

19.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans
467,492
549,277
-
-


On 14th February 2020 a bank loan totalling £840,000 was taken out and is secured by means of charges over the Group's freehold property. The related interest rate is 3.15% until February 2025. The loan is repaid on a monthly basis.


20.


Loans

Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Amounts falling due within one year

Bank loans
81,785
79,252
-
-

Amounts falling due 1-2 years

Bank loans
77,858
81,785
-
-

Amounts falling due 2-5 years

Bank loans
267,619
467,492
-
-

Amounts falling due after more than 5 years

Bank loans
122,015
-
-
-

549,277
628,529
-
-


Page 30

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

21.


Deferred taxation


Group



2023
2022


£

£






At beginning of year
(18,536)
(6,904)


Charged to profit or loss
(7,199)
(11,632)



At end of year
(25,735)
(18,536)

The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£
£

Accelerated capital allowances
(26,650)
(18,536)

Other timing differences
915
-

(25,735)
(18,536)


22.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



500 (2022 -500) Ordinary A shares of £1.00 each
500
500
50 (2022 -50) Ordinary B shares of £1.00 each
50
50
150 (2022 -150) Ordinary C shares of £1.00 each
150
150
150 (2022 -150) Ordinary D shares of £1.00 each
150
150
150 (2022 -150) Ordinary E shares of £1.00 each
150
150
2,589,970 (2022 -2,589,970) Ordinary F shares of £1.00 each
2,589,970
2,589,970

2,590,970

2,590,970

Ordinary, A, B, C, D and E shares rank parri passu in all respects and carry the right to one vote per share.
Ordinary F shares do not carry any voting rights.



23.


Reserves

Profit and loss account

Profit and loss account includes all current and prior period profits and losses.

Page 31

 
Continental Textiles (Group) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023

24.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £43,183 (2022: £41,337). £3,660 (2022: Nil) was payable to the fund at the balance sheet date and is included in creditors.


25.Guarantees

All companies in the group headed by Continental Textiles (Group) Limited have entered into a guarantee with the bankers of the subsidiary company, which secures the debts of the company over all the assets of the group.
As at 31 December 2023, such debts amounted to £549,277 (2
022: £587,747).


26.


Related party transactions

The company has made use of the provisions available under FRS 102 to not disclose transactions with entities that it wholly owns.
At 31 December 2023 the group owed the directors £5
 (2022: £102,897) in respect of directors loan accounts. No interest has been charged on this balance, which is repayable on demand and included within other creditors.


27.


Controlling party

The company is under the ultimate control of the directors by virtue of their shareholding in the company.

 
Page 32