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Registered number: 00518615









Continental Textiles (Manchester) Limited









Annual Report and Financial Statements

For the year ended 31 December 2023

 
Continental Textiles (Manchester) Limited
 
 
Company Information


Directors
A D Crewe 
J A Crewe 
L Ellis 
P Barlow 
R Poole 




Company secretary
P Barlow



Registered number
00518615



Registered office
3 Avocado Court
Commerce Way

Trafford Park

Manchester

M17 1HW




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Stockport Exchange

Railway Road

Stockport

Cheshire

SK1 3GG





 
Continental Textiles (Manchester) Limited
 

Contents



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10
Statement of Changes in Equity
 
11
Notes to the Financial Statements
 
12 - 25


 
Continental Textiles (Manchester) Limited
 
 
Strategic report
For the year ended 31 December 2023

Introduction
 
This strategic report provides an overview of the company's performance and key developments during the year ended 31 December 2023. The report focuses on financial performance, market trends, and the company's overall strategy. Additionally, it outlines the company'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 (Manchester) Limited
 

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 company'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
1,074,510
2,604,132
Operating profit margin %
9.9%
19.8%


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.



J A Crewe
Director

Date: 12 September 2024

Page 2

 
Continental Textiles (Manchester) 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 Strategic report, the Directors' 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 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 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 for the Company'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 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 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 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 £808,372 (2022 - £2,053,503).

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:

A D Crewe 
J A Crewe 
L Ellis 
P Barlow 
R Poole 

Page 3

 
Continental Textiles (Manchester) 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'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's auditors are aware of that information.

Post balance sheet events and going concern

There have been no significant events affecting the Company 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.
 





J A Crewe
Director

Date: 12 September 2024

Page 4

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

Opinion


We have audited the financial statements of Continental Textiles (Manchester) Limited (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 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 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.


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 Company 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 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 ReportOur 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 (Manchester) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Manchester) 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 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 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 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 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.


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 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 (Manchester) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Manchester) 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 (Manchester) Limited
 
 
 
Independent Auditors' Report to the Members of Continental Textiles (Manchester) 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 Stockport Exchange
Railway Road
Stockport
Cheshire
SK1 3GG

12 September 2024
Page 8

 
Continental Textiles (Manchester) Limited
 
 
Statement of comprehensive income
For the year ended 31 December 2023

2023
2022
Note
£
£

  

Turnover
 3 
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
  
(2,100,479)
(1,850,490)

Operating profit
  
1,074,510
2,604,132

Interest receivable and similar income
  
47,554
-

Interest payable and similar expenses
 8 
(46,094)
(51,500)

Profit before tax
  
1,075,970
2,552,632

Tax on profit
 9 
(266,303)
(499,129)

Profit for the financial year
  
809,667
2,053,503

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

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

The notes on pages 12 to 25 form part of these financial statements.

Page 9

 
Continental Textiles (Manchester) Limited
Registered number: 00518615

Balance sheet
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 11 
1,166,022
1,200,322

Current assets
  

Stocks
 12 
859,084
730,797

Debtors: amounts falling due within one year
 13 
4,172,796
5,030,965

Cash at bank and in hand
 14 
1,572,284
976,846

  
6,604,164
6,738,608

Creditors: amounts falling due within one year
 15 
(1,191,937)
(1,495,762)

Net current assets
  
 
 
5,412,227
 
 
5,242,846

Total assets less current liabilities
  
6,578,249
6,443,168

Creditors: amounts falling due after more than one year
 16 
(467,492)
(549,277)

Provisions for liabilities
  

Deferred tax
 18 
(25,735)
(18,536)

Net assets
  
6,085,022
5,875,355


Capital and reserves
  

Called up share capital 
 19 
500
500

Profit and loss account
 20 
6,084,522
5,874,855

  
6,085,022
5,875,355


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


J A Crewe
Director

Date: 12 September 2024

The notes on pages 12 to 25 form part of these financial statements.

Page 10

 
Continental Textiles (Manchester) Limited
 

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
500
4,918,852
4,919,352


Comprehensive income for the year

Profit for the year
-
2,053,503
2,053,503


Contributions by and distributions to owners

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



At 1 January 2023
500
5,874,855
5,875,355


Comprehensive income for the year

Profit for the year
-
809,667
809,667


Contributions by and distributions to owners

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


At 31 December 2023
500
6,084,522
6,085,022


The notes on pages 12 to 25 form part of these financial statements.

Page 11

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

1.


General information

Continental Textiles (Manchester) Limited is a private company limited by share capital. The company is incorporated in England, number 00518615. The address of the registered office and principal place of business is 3 Avocado Court, Commerce Way, Trafford Park, Manchester, M17 1HW.
The principal activity is the wholesale of clothing and footwear.

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 management to exercise judgement in applying the Company's accounting policies.

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Continental Textiles (Group) Limited as at 31 December 2022 and these financial statements may be obtained from Companies House.

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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 Company has transferred the significant risks and rewards of ownership to the buyer;
the Company 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 Company 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 12

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

2.Accounting policies (continued)

 
2.4

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
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.

 
2.5

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to store, complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
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.

 
2.6

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.

 
2.7

Cash

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.

Page 13

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

2.Accounting policies (continued)

 
2.8

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.


Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities


Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.


Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.


Page 14

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

2.Accounting policies (continued)


2.8
Financial instruments (continued)

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

 
2.9

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.

  
2.10

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.
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 the statement of comprehensive income.

 
2.11

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.

 
2.12

Operating leases: the Company as lessee

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

 
2.13

Interest income

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

Page 15

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

2.Accounting policies (continued)

 
2.14

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.

 
2.15

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Company in independently administered funds.

 
2.16

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 operates and generates 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; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

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.

Page 16

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

3.


Turnover

The whole of the turnover is attributable to the principal activity of the company, 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



4.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
12,425
11,295

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 17

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

5.


Employees

2023
2022
£
£

Wages and salaries
1,016,377
1,075,918

Social security costs
98,655
104,895

Cost of defined contribution scheme
43,183
41,337

1,158,215
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
15
14



Buying & Technology
10
10



Design & Marketing
4
5

34
34


6.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
245,378
233,181

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

272,978
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 £63,462 (2022 - £83,800).

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


7.


Interest receivable

2023
2022
£
£


Other interest receivable
47,554
-

Page 18

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

8.


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


9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
259,104
487,497

Deferred tax


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


Taxation on profit on ordinary activities
266,303
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
1,075,970
2,552,632


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
253,068
485,000

Effects of:


Expenses not deductible for tax purposes
-
812

Capital allowances for year in excess of depreciation
12,802
10,342

Change in tax rates
433
4,449

Super deduction
-
(1,474)

Total tax charge for the year
266,303
499,129


Factors that may affect future tax charges

Page 19

 
Continental Textiles (Manchester) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023
 
9.Taxation (continued)

There are currently no factors to consider that will affect future tax charges 

Page 20

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

10.


Dividends

2023
2022
£
£


Ordinary shares
600,000
1,097,500


11.


Tangible fixed assets





Freehold property
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
27,990
247,026
1,430,516



Depreciation


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


Charge for the year
46,220
-
18,504
64,724


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



At 31 December 2023

184,880
27,990
51,624
264,494



Net book value



At 31 December 2023
970,620
-
195,402
1,166,022



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


12.


Stocks

2023
2022
£
£

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


Page 21

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

13.


Debtors

2023
2022
£
£


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

Amounts owed by group undertakings
1,294,369
1,294,369

Other debtors
456,403
1,135,253

Prepayments and accrued income
30,546
39,035

4,172,796
5,030,965


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


14.


Cash

2023
2022
£
£

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



15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
81,785
79,252

Trade creditors
251,808
253,154

Corporation tax
166,137
494,530

Other taxation and social security
147,373
70,627

Other creditors
34,198
133,430

Accruals and deferred income
510,636
464,769

1,191,937
1,495,762


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 company's freehold property. The related interest rate is 3.15% until February 2025. The loan is repaid on a monthly basis.

Page 22

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

16.


Creditors: Amounts falling due after more than one year

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 company's freehold property. The related interest rate is 3.15% until Febraury 2025. The loan is repaid on a monthly basis.
 

17.


Loans


Analysis of the maturity of loans is given below:


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



18.


Deferred taxation




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)

Page 23

 
Continental Textiles (Manchester) Limited
 
 
 
Notes to the financial statements
For the year ended 31 December 2023
 
18.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


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

Other timing differences
915
-

(25,735)
(18,536)


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



500 (2022 - 500) Ordinary shares of £1.00 each
500
500



20.


Reserves

Profit and loss account

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


21.


Guarantees

All companies in the group headed by the ultimate parent 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 (
2022: £587,747).


22.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company 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.


23.


Related party transactions

The company has made use of the provisions available under FRS 102 to not disclose transactions with entities that are wholly owned by its parent.
At 31 December 2023 the company 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.

Page 24

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

24.


Controlling party

The immediate parent company is Sprint Group Limited, a company registered in England and Wales, registered number 02589606.
The ultimate parent company, and the largest and smallest group in which the results of the company are consolidated is deemed to be Continental Textiles (Group) Limited, a company registered in England, registered number 08603972.
The consolidated financial statements of these groups are available to the public and may be obtained from the Registrar of Companies.

 
Page 25