Company registration number 01877775 (England and Wales)
GEARY'S BAKERIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
GEARY'S BAKERIES LIMITED
COMPANY INFORMATION
Directors
Mr Robert Unsworth
Mr Jason Geary
J Wesson
J Cullen
G Unsworth
J Hollingsworth
(Appointed 30 January 2023)
D Drabble
(Appointed 24 October 2023)
Company number
01877775
Registered office
Unit 25
Hayhill Industrial Estate
Loughborough
Leicestershire
LE12 8LD
Auditor
Azets
6th Floor, Bank House
8 Cherry Street
Birmingham
United Kingdom
B2 5AL
GEARY'S BAKERIES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of income and retained earnings
10
Balance sheet
11
Notes to the financial statements
12 - 25
GEARY'S BAKERIES LIMITED
STRATEGIC REPORT
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 1 -

The directors present the strategic report for the 52 week period ended 29 December 2023.

Review of the business

Our vision is to be the UK's first choice for affordable, high quality, artisan bread. Unbeatable for quality, service, innocation and value for money. We want to raise the standard of bread eaten in the UK.

 

 

We make this quality affordable by combining traditional bakery skills with modern manufacturing methods. We focus on prospering in the space between small-scale quality artisan bakers and high scale plant bakers - by capturing the best of both worlds.

 

We value loyal customers and employees and want to be recognised as both a great supplier and a great place to work.

 

In 2023, our growth has accellerated further with sales increasing by £20.5m (44.2%) to £66.8m for the year.

This has been driven by two main contributors:

 

 

Our gross margin increased considerably by 21.8% compared to 2022, to 27.5%. Throughout 2023 we invested heavily in automation at our Glenfield site. This combined with the additional volume has created significant economies of scale. Furthermore, existing product development has been a key area of focus helping to improve gross margins with recipe innovation, and waste and giveaway improvement.

 

Overall, our operating profit grew by 237% in 2023. This is a result of our increased sales volume and gross margin as noted above, offset by further investment in our overhead (mainly labour) to help keep pace with our growing business. Jason’s Sourdough is now the market leader sourdough brand in the UK with continual increase in market penetration and frequency of purchases by its loyal customer base. It has become an established and trusted brand within the bakery industry.

 

2024 has started in similar fashion, with sales continuing to grow significantly because of the factors identified above. We have also seen stabilisation in our raw material cost base due to market conditions settling over the course of 2023. We have continued to invest strategically in our operations, technology, and brand development to support future growth and enhance competitiveness in the market. To support this, we have secured a lease on a new bakery in Glenfield, on the same site as our current Glenfield operation which will open in the first half of 2025.

 

In terms of financial position, the group continues to operate with low financial leverage. Total external debt as at 29 December 2023 was £1.3m which equates to a 0.13 External Debt: EBITDA ratio.

Principal risks and uncertainties

The principal risks and uncertainties faced by the company have remained broadly consistent from the prior year.

 

Firstly, our ability to pass on cost inflation in a timely matter is more fundamental now than ever, We continue to work hard to ensure we can mitigate this where appropriate and remain true to our core alue which is being unbeatable for quality, service, and value for money.

 

Secondly, our ability to attract and retain the best quality people in a difficuly labour market is pivotal. If we do not achieve this, we will struggle to achieve our ambitious growth plans.

GEARY'S BAKERIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 2 -
Statement by directors regarding their duties under section 172 of the UK Companies Act 2006
The directors believe that they, individually and collectively, have acted, in good faith, in a way they consider to have promoted the long-term success of the group for the benefit of its shareholders, whilst serving the interest of its stakeholders and the environment (in accordance with section 172 of the Companies Act 2006). The directors have performed in line with the group's core purpose, values and code of conduct.
Acting in the long term interest

Each year the directors deliver a detailed plan prepared in accordance with the overarching long-term business strategy. The strategy is focused on delivering high quality, artisan bread products, at scale. We will invest in modern manufacturing methods where appropriate while not detracting from the artisanal nature of the product. We focus on prospering in the space between small-scale quality artisan bakers and high scale plant bakers.

Prioritising employees

The directors have prioritised the groups employee’s by acting in accordance with our core operating values:

 

Facilitating a quarterly “how are we doing?” forum where all departments are represented to feedback directly to directors on areas we could improve and taking appropriate actions.

 

To believe in the potential of everyone and provide an environment that supports personal development. Specifically, we invest in national vocational qualifications in baking for those individuals prospering and wanting to develop. In 2023, we also setup an apprenticeship scheme, taking on 18 apprentice bakers to commence their focused training and development, to achieve a recognised qualification in the baking industry.

 

To offer a working environment and appropriate remuneration that allows the group to retain and develop our talent.

 

Investing in additional HR resources to strengthen the relationship between the business and its employees and ensure our employees receive the appropriate guidance and support in consistently applying our principles and policies.

 

Circulating regular employee surveys to aid understanding of employee satisfaction in the workplace and to make efforts to improve on any suggestions or recommendations.

Working in partnership with suppliers, customers and other stakeholders

The directors have worked in partnership with the group’s suppliers by:

 

The directors have promoted positive relations with the group’s customers by:

GEARY'S BAKERIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 3 -
Managing the impact on the community and the environment

The directors have promoted and acted in accordance with the group’s core values on community and environment by:

Maintaining hire standard of business conduct
The directors have promoted high standards of business conduct by acting in accordance with our core purpose,
values, and code of conduct which form the basis of the company culture and its dealings with people.
Acting fairly between members of the company
The group has continued to work in partnership with its ultimate shareholders. All of which take an active role within
the business.

On behalf of the board

J Wesson
Director
11 July 2024
GEARY'S BAKERIES LIMITED
DIRECTORS' REPORT
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the 52 week period ended 29 December 2023.

Principal activities

The principal activity of the company continued to be that of bakers.

Results and dividends

The results for the 52 week period are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the 52 week period and up to the date of signature of the financial statements were as follows:

Mr Robert Unsworth
Mr Jason Geary
Mr Stephen Gurney
(Resigned 18 January 2024)
J Wesson
J Cullen
Mr Robert Burrell
(Resigned 30 April 2024)
G Unsworth
J Hollingsworth
(Appointed 30 January 2023)
D Drabble
(Appointed 24 October 2023)
Research and development

The director's continue to invest time and money into research and development of the company's baked goods to continue to provide quality products to its customers.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

Azets were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Energy and carbon report

The company has taken the exemption available under S20A of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 not to produce an Energy and Carbon Report on the grounds that is a wholly owned subsidiary that is incorporated into the consolidated financial statements of it's immediate parent undertaking Geary's Bakeries Holdings Limited, which produces a consolidated Energy and Carbon Report for the group as a whole.

GEARY'S BAKERIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 5 -
Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of research and development.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
J Wesson
Director
11 July 2024
GEARY'S BAKERIES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 6 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

GEARY'S BAKERIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GEARY'S BAKERIES LIMITED
- 7 -
Opinion

We have audited the financial statements of Geary's Bakeries Limited (the 'company') for the 52 week period ended 29 December 2023 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

GEARY'S BAKERIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEARY'S BAKERIES LIMITED
- 8 -
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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

GEARY'S BAKERIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEARY'S BAKERIES LIMITED
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Tom Mullard ACA
Senior Statutory Auditor
12 July 2024
2024-07-12
For and on behalf of Azets Audit Services
Chartered Accountants
6th Floor, Bank House
Statutory Auditor
8 Cherry Street
Birmingham
United Kingdom
B2 5AL
GEARY'S BAKERIES LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 10 -
52 week period
52 week period
ended
ended
29 December
30 December
2023
2022 as restated
Notes
£
£
Turnover
3
66,767,713
46,308,527
Cost of sales
(48,386,331)
(36,207,875)
Gross profit
18,381,382
10,100,652
Administrative expenses
(9,414,102)
(7,429,685)
Operating profit
5
8,967,280
2,670,967
Interest receivable and similar income
16,555
2,418
Interest payable and similar expenses
9
(96,390)
(59,863)
Profit before taxation
8,887,445
2,613,522
Tax on profit
10
(1,269,303)
118,325
Profit for the financial 52 week period
7,618,142
2,731,847
Retained earnings brought forward
14,952,071
12,220,224
Retained earnings carried forward
22,570,213
14,952,071

The profit and loss account has been prepared on the basis that all operations are continuing operations.

GEARY'S BAKERIES LIMITED
BALANCE SHEET
AS AT
29 DECEMBER 2023
29 December 2023
- 11 -
29 December 2023
30 December 2022                                  as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
11
176,736
82,986
Tangible assets
12
10,684,151
7,611,190
10,860,887
7,694,176
Current assets
Stocks
13
1,032,576
879,333
Debtors
14
26,895,483
17,267,115
Cash at bank and in hand
1,453,403
3,773,373
29,381,462
21,919,821
Creditors: amounts falling due within one year
15
(13,625,880)
(11,218,320)
Net current assets
15,755,582
10,701,501
Total assets less current liabilities
26,616,469
18,395,677
Creditors: amounts falling due after more than one year
16
(636,377)
(1,319,167)
Provisions for liabilities
Deferred tax liability
19
2,399,895
1,114,455
(2,399,895)
(1,114,455)
Net assets
23,580,197
15,962,055
Capital and reserves
Called up share capital
21
7,987
7,987
Capital redemption reserve
22
1,001,997
1,001,997
Profit and loss reserves
23
22,570,213
14,952,071
Total equity
23,580,197
15,962,055
The financial statements were approved by the board of directors and authorised for issue on 11 July 2024 and are signed on its behalf by:
J Wesson
Director
Company Registration No. 01877775
GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Geary's Bakeries Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 25, Hayhill Industrial Estate, Loughborough, Leicestershire, LE12 8LD.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Geary's Bakeries Holdings Limited. These consolidated financial statements are available from its registered office, Unit 25, Hayhill Industrial Estate, Loughborough, Leicestershire, LE12 8LD.

1.2
Accounting period

These financial statements are for the 52 weeks ended 29 December 2023. The comparative accounting period are for the 52 weeks ended 30 December 2022.

1.3
Going concern

At the time of approving the financial statements, the directors have reviewed ongoing profitability and cash generation of the entity extensively. The directors have produced forecasts demonstrating a reasonable expectation to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. Turnover is recognised on the date of despatch as this is the point that all risk and rewards are deemed to be transferred.

1.5
Research and development expenditure

Research and development expenditure is expensed to the profit and loss account in the year in which it is incurred.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Basket licences
12.5% per annum on cost
1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Straight line over the life of the lease
Plant and machinery
15% Reducing balance
Fixtures, fittings and equipment
25% Reducing balance
Motor vehicles
25% Reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated and compared to the carrying amount in order to determine the extent of the impairment loss (if any). Where the carrying amount exceeds its recoverable amount, and impairment loss is recognised in the profit and lsos account unless the asset is ccarreid at a revalued amout where the impairment loss is a revaluation decrease.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Cost is calculated using the first-in, first-out formula. Provision is made for damaged, obsolete and slow-moving stock where appropriate.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
Employee benefits

When employees have rendered service to the company, short-term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 17 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
66,767,713
46,308,527
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
66,767,713
46,308,527
4
Other Income
An analysis of the companies other income is as follows:
2023
2022
Other income
£
£
Interest income
16,555
2,418
5
Operating profit
2023
2022 as restated
Operating profit for the period is stated after charging:
£
£
Research and development costs
17,064
125,742
Depreciation of owned tangible fixed assets
1,172,644
789,082
Depreciation of tangible fixed assets held under finance leases
225,674
398,665
Loss on disposal of tangible fixed assets
27,199
-
Amortisation of intangible assets
24,867
21,160
Operating lease charges
558,369
553,995
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
25,000
13,250
For other services
Financial statement preperation services
4,000
-
0
Taxation compliance services
7,600
-
0
11,600
-
GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 18 -
7
Employees

The average monthly number of persons (including directors) employed by the company during the 52 week period was:

2023
2022
Number
Number
Directors and administration
31
32
Technical and hygiene
36
34
Engineering
19
18
Production
313
213
Total
399
297

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
16,679,373
12,244,287
Social security costs
1,351,744
983,358
Pension costs
317,935
233,445
18,349,052
13,461,090
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
660,353
419,334
Company pension contributions to defined contribution schemes
29,472
16,307
Sums paid to third parties for directors' services
20,000
-
709,825
435,641

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2022 - 0).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
136,500
136,488
Company pension contributions to defined contribution schemes
4,095
5,400
GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 19 -
9
Interest payable and similar expenses
2023
2022 as restated
£
£
Other interest on financial liabilities
37,926
22,157
Interest on finance leases and hire purchase contracts
58,464
37,706
96,390
59,863
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
222,487
-
0
Adjustments in respect of prior periods
(238,624)
-
0
Total current tax
(16,137)
-
0
Deferred tax
Origination and reversal of timing differences
1,285,440
(118,325)
Total tax charge/(credit)
1,269,303
(118,325)

The actual charge/(credit) for the 52 week period can be reconciled to the expected charge for the 52 week period based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
8,887,445
2,613,522
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
2,088,550
496,569
Tax effect of expenses that are not deductible in determining taxable profit
4,876
730
Adjustments in respect of prior years
(238,624)
(40,033)
Group relief
(663,113)
-
0
Depreciation on assets not qualifying for tax allowances
-
0
6,356
Research and development tax credit
-
0
(439,651)
Deferred tax adjustments in respect of prior years
(1,185)
-
0
Effect of change in deferred tax rate
-
0
(18,790)
Remeasurement of deferred tax for changes in tax rates
77,196
(123,506)
Fixed asset differences
1,603
-
0
Taxation charge/(credit) for the period
1,269,303
(118,325)
GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 20 -
11
Intangible fixed assets
Basket licences
£
Cost
At 31 December 2022
172,996
Additions
118,617
At 29 December 2023
291,613
Amortisation and impairment
At 31 December 2022
90,010
Amortisation charged for the 52 week period
24,867
At 29 December 2023
114,877
Carrying amount
At 29 December 2023
176,736
At 30 December 2022
82,986
12
Tangible fixed assets
Leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 31 December 2022
521,267
14,796,262
816,227
4,000
16,137,756
Additions
-
0
3,971,162
564,816
-
0
4,535,978
Disposals
-
0
(258,298)
-
0
-
0
(258,298)
At 29 December 2023
521,267
18,509,126
1,381,043
4,000
20,415,436
Depreciation and impairment
At 31 December 2022
433,323
7,568,608
521,134
3,501
8,526,566
Depreciation charged in the 52 week period
36,699
1,240,313
121,181
125
1,398,318
Eliminated in respect of disposals
-
0
(193,599)
-
0
-
0
(193,599)
At 29 December 2023
470,022
8,615,322
642,315
3,626
9,731,285
Carrying amount
At 29 December 2023
51,245
9,893,804
738,728
374
10,684,151
At 30 December 2022
87,944
7,227,654
295,093
499
7,611,190
GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
12
Tangible fixed assets
(Continued)
- 21 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022 as restated
£
£
Plant and machinery
1,143,015
1,368,690

Assets held under hire purchase contracts are secured against the assets to which they relate.

 

13
Stocks
2023
2022
£
£
Raw materials and consumables
834,112
721,001
Finished goods and goods for resale
198,464
158,332
1,032,576
879,333
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,988,696
3,577,776
Corporation tax recoverable
-
0
790
Amounts owed by group undertakings
20,731,721
12,539,630
Other debtors
945,352
941,462
Prepayments and accrued income
229,714
207,457
26,895,483
17,267,115

Amounts owed by group undertakings are unsecured, repayable on demand and bear no interest.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 22 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
357,298
349,813
Other borrowings
17
325,598
379,855
Trade creditors
10,962,708
8,439,879
Corporation tax
222,487
-
0
Other taxation and social security
428,576
276,729
Other creditors
238,273
178,229
Accruals and deferred income
1,090,940
1,593,815
13,625,880
11,218,320
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
636,377
993,675
Other borrowings
17
-
0
325,492
636,377
1,319,167
17
Loans and overdrafts
2023
2022
£
£
Other loans
325,598
705,347
Payable within one year
325,598
379,855
Payable after one year
-
0
325,492

Other borrowings relate to sale and leaseback arrangements. These are repayable by monthly instalments by 31st October 2024 and carry a fixed rate of interest of 3.14%. They are secured by a fixed charge over the assets to which they relate.

18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
357,298
349,813
In two to five years
636,377
993,675
993,675
1,343,488
GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
18
Finance lease obligations
(Continued)
- 23 -

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment.

19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,405,930
1,579,944
Tax losses
-
(451,631)
Other timing differences
(6,035)
(13,858)
2,399,895
1,114,455
2023
Movements in the 52 week period:
£
Liability at 31 December 2022
1,114,455
Charge to profit or loss
1,285,440
Liability at 29 December 2023
2,399,895
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
317,935
233,445

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
7,987
7,987
7,987
7,987

All shares rank pari passu.

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 24 -
22
Capital redemption reserve

The reserve is a non-distributable reserve and represents the nominal value of shares purchased and cancelled.

23
Profit and loss reserves

The profit and loss reserve comprises retained profits and losses for the current and prior periods.

24
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
287,364
554,539
Between two and five years
856,332
815,886
1,143,696
1,370,425
25
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
1,360,597
26
Related party transactions

During the period the company entered into the following transactions with related parties:

 

During the year, remuneration totalling £nil (2022: £29,613) was paid to close family of key management personnel.

 

Rental charges of £400,000 (2022: £400,000) were paid to entities under the control of key management personnel.

 

Recharges of £nil (2022: £25,383) were charged from the parent undertaking.

 

A balance of £nil (2022: £415) is due to key management personnel at the period end.

 

GEARY'S BAKERIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 52 WEEK PERIOD ENDED 29 DECEMBER 2023
- 25 -
27
Prior period adjustment
Reconciliation of changes in equity
1 January
30 December
2022
2022
£
£
Adjustments to prior 52 week period
Understatement of Cost of Sales
-
1,941,323
Overstatement of Administrative Expenses
-
(1,941,323)
Understatement of Accruals
-
497,577
Overstatement of Trade creditors
-
(497,577)
Obligations under finance leases falling due within one year
-
197,661
Other Borrowings  falling due within one year
-
(197,661)
Obligations under finance leases falling due after one year
-
652,282
Other Borrowings falling due after one year
-
(652,282)
Total adjustments
-
-
Equity as previously reported
13,320,208
15,962,055
Equity as adjusted
13,320,208
15,962,055
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior 52 week period
Understatement of Cost of Sales
1,941,323
Overstatement of Administrative Expenses
(1,941,323)
Total adjustments
-
Profit as previously reported
2,731,847
Profit as adjusted
2,731,847
The director's have reclassified employee remuneration costs from administrative expenses to cost of sales in the prior period to align the financial statements to their applicable internal cost centres. Reclassifications of trade creditors, accruals, olbligations under finance leases and other borrowings in the prior period are to align account balances to an appropriate classification within the financial statements.
28
Ultimate controlling party

The ultimate parent company at the year end was Geary's Bakeries Holdings Limited. The registered office of Geary's Holdings Limited is the same as the company's registered office address as given in the company information page of these financial statements.

 

The company's results will be included in the consolidated financial statements of Geary's Bakeries Holdings

Limited forming the smallest and largest level of consolidation for the company's results.There is no ultimate controlling party.

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