Company registration number 05396577 (England and Wales)
TANGLE TEEZER LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
TANGLE TEEZER LIMITED
COMPANY INFORMATION
Director
Mr James Vowles
Company number
05396577
Registered office
1st and 2nd floor
205 Stockwell Road
London
United Kingdom
SW9 9SL
Independent auditors
PricewaterhouseCoopers LLP
40 Clarendon Road
Watford
Hertfordshire
United Kingdom
WD17 1JJ
TANGLE TEEZER LIMITED
CONTENTS
Page
Strategic report
1 - 6
Director's report
7 - 9
Independent auditors' report
10 - 12
Statement of comprehensive income
13
Statement of financial position
14
Statement of changes in equity
15
Notes to the financial statements
16 - 30
TANGLE TEEZER LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Business review
2023 was a strong year for the Tangle Teezer's wider group, with sales growth of 16% to £53,540,000 (2022: £46,167,000) in the consolidated business, and 38% growth in the consolidated Operating EBITDA to £10,626,000 (2022: £7,695,000). Direct markets in the US and UK grew strongly, supported by market growth across Europe, driven by new retail distribution gains and supported by new product innovation. The business continued to make significant investments in marketing and brand awareness, and increased investment in research and development to support new product innovation. Further investments were made in infrastructure and personnel, as well as adding further global production capability and additional capacity to support continued growth.
Full year Tangle Teezer Limited's turnover for the year to 31 December 2023 was £37,073,000 (2022: £36,808,000), growing 1% from the year to 31 December 2022. Tangle Teezer’s most mature UK market grew 25% on the back of new retail distribution gains and growth in all channels, now representing 22% of total sales (2022: 17%). European sales grew 7%, +13% when excluding Russian sales in 2022, now representing 39% of sales (2022: 37%). Sales to Rest of World (ROW) declined by (14%), driven by a decline in sales to the US subsidiary (14)%. While the wider group's consolidated sales in the US increased by 45% compared to the prior year some of this growth was fuelled by localised North America production. The US remains Tangle Teezer’s largest and fastest growing market. Export sales made up 78% (2022: 83%) of total revenues, declining due to strong UK growth and ROW impact. Established distribution continues in over 75 countries.
2023 saw 22% growth in core detangling categories driven by US growth, the launch of our Plant based brush range and the launch of The Essential Detangler. The Styling category, the new range of Combs and our Detangling Spray range also contributed to the strong growth. Product sales of our established core products continue to be supported by new size variants, new designs and innovation for different hair types. ‘The Ultimate Detangler’ product family continues to drive growth with new distribution gains and supplemented by large and small versions, and variants for fine and fragile and naturally curly hair.
Tangle Teezer products continue to win numerous awards around the world from various influential press publications within the beauty industry. Tangle Teezer products won 14 significant awards during 2023, with seven of these for the Plant Brush launched earlier in the year recognizing the strength of our innovation and commitment to making Tangle Teezer even more sustainable. For Plant Brush these awards included the Allure Best of Beauty Award, the Harper’s Bazaar Beauty Icon award, and In Style Best Beauty Buys. Other Tangle Teezer products also won awards that included New beauty Reader’s Choice Award for The Ultimate Detangler, and the Cosmopolitan Beauty Award for Best round brush for Curly Hair.
Gross profit margins remained flat during the year at 47% (2022: 47%) but grew on a Tangle Teezer consolidated basis. Despite inflationary pressures, margins were improved due to a combination of pricing, economies of scale and operational efficiency projects. We expect to be able to improve margins in 2024 driven by the full impact of operational and supply chain efficiency projects together with further economies of scale.
Profit before taxation (PBT) increased by 1% to £4,934,000 (2022: £4,893,000) while PBT margins remained at 13% (2022: 13%). This was impacted by ROW sales performance, with Gross margins and Administrative expenses in line with prior year.
There were a number of staff additions during the year with average staff numbers increasing to 65 (2022: 61). These additions primarily supported the global operational and supply chain development of the business. We also appointed a Chief Sales Officer in 2023 to support the company growth ambitions and global opportunity.
TANGLE TEEZER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Net current assets decreased to £14,710,000 (2022: £16,548,000). Trade and other receivables increased by 38% driven by growth in sales to the US subsidiary and phasing of external receipts. Inventories decreased by 8% due to optimisation of the inventory holding in the UK and the movement of inventory to global locations, in particular the US, to support international growth. Trade creditors increased by 59% in the UK due to improving credit terms driven by diversification of manufacturing and global sales growth.
Future developments
The business is a market leader in detangling hairbrushes and has leveraged its strong brand equity to expand into other core haircare categories, such as Blow-drying and Styling, catering for different global hair types and delivering exciting designs. The business has successfully launched into adjacent categories with the launch of detangling sprays, accessories, scalp care products and combs, as well as the successful Pet Teezer brand. Tangle Teezer has grown to become a truly global brand that enjoys substantial and increasing brand awareness, and strong customer loyalty; it has continual innovation at its heart, with products designed differently to perform brilliantly. The goal is to continue to grow into a leading haircare brand and to be the world’s most popular hairbrush.
Tangle Teezer will continue its innovative approach to product development, and plans are in place for numerous significant product launches during the next 18 months, meeting evolving customer demands and expanding into adjacent categories. This includes further developing the portfolio of products for different hair types, new designs and collaborations and continued expansion into adjacent product categories. Tangle Teezer will continue to build on its strong brand position, and seek to grow the market with new products, gain further market share and expand geographically.
Environmental, social and governance considerations (ESG)
At Tangle Teezer we care about hair, but we also care about our customers, and we care how we treat the planet. We want to make innovative haircare in the most sustainable way we can, so we can all live life, untangled. We have made positive strides towards sustainability, and we want to continue to reduce our carbon footprint and the amount of waste we produce, so we can keep making waves, not tangles – for our planet and for the future.
In 2023 we made a number of significant developments with respect to sustainability. We launched a revolutionary range of Plant based brushes made from 85% sustainably sourced castor beans and sold over 188,000 Plant based brushes across the year. We continued to focus on our recycling programme and in 2023 we recycled over 1200 brushes, more than doubling the number of brushes recycled in 2022. And we continued the roll out of our new cardboard packaging as a plan to transition all of our products to sustainably-sourced, fully recyclable, FSC and CPI certified, cardboard by 2025.
We also support important social causes. In 2023 we continued to contribute to Choose Love and supported a number of local charities including Woodgreen Pets Charity, Norwood & Brixton foodbank, as well as working with several NHS hospitals and units.
TANGLE TEEZER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Principal and financial risks
It is the responsibility of the director to understand and ensure systems are in place to control risks and
uncertainties that the company faces. The principal risks the business faces are:
Credit Risk
Over the recent years the company's exposure to bad debt has been minimal. The company continues to control this through rigorous company credit checks prior to offering credit terms, and with bank guarantees where deemed necessary.
Liquidity and Cashflow Risks
Liquidity and cashflow risk remains low. Sales revenue has remained strong and consistent in recent years due to a balanced sales portfolio, generating strong margins. Operating expenses contain a large discretionary element used to support the brand, which can be flexed should external factors materially impact demand. The business has an unutilised rolling credit facility and the full support of shareholders.
Foreign Exchange Risk
Exposure to foreign exchange risks remain minimal over the years due to Tangle Teezer Limited predominately
invoicing in GBP and Tangle Teezer Inc. solely in USD. As the company has expanded internationally there are now a few customer accounts in foreign currencies. These customer accounts represent a very small proportion of our overall business. Otherwise, exposure to foreign exchange risk is limited to costs incurred in US dollar, Euro and Chinese yuan. The company holds bank accounts in all four currencies and the current and future strategy will continue to focus on creating a natural hedge position to mitigate any foreign exchange exposure.
Commercial Risks and Developments
As with any successful brand, imitation and counterfeit products have been launched by competitors in several
markets. The company has a full time, in-house, Brand Protection Manager who works closely with customs
officials, both home and abroad, and a 'zero tolerance' approach is taken with anyone found manufacturing or
distributing non-genuine product.
Russia/ Ukraine Considerations
In March 2022, Russia invaded Ukraine with war continuing throughout 2023 and into 2024. The board of directors immediately decided to suspend shipment of products to Russia in response and has continued with this approach in 2023. There is no material impact from the Russia-Ukraine conflict on the company.
The business has continued to perform well during the crisis, remains a going concern with a healthy Balance Sheet and a strong outlook.
TANGLE TEEZER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Financial key performance indicators (KPIs)
Continuous revenue growth is planned through deeper market penetration and new product innovation and
diversification. In line with this, costs such as marketing, research & development and staff costs will increase due to the additional resources required to assist in taking the company forward.
The company’s key financial KPl's are as follows:
export sales: 2024 target – 80% (2023 actual - 78%);
gross profit margin: 2024 target – 47% (2023 actual - 47%); and
profit before tax: 2024 target - 15% (2023 actual - 13%).
S172 Statements
The director is required to explain how he considers the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 (‘S172’) when performing his duty to promote the
success of the company under S172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the company.
S172 statement explains who the company’s stakeholder groups are, their material issues and how the director of the Tangle Teezer Limited (“Tangle Teezer”) engages with them, and the effect of that regards, including on the principal decisions taken by the company during the financial year. The S172 statement focuses on matters of strategic importance and the level of information disclosed is consistent with the size and the complexity of the business.
When making decisions, the director ensures that he considers, in good faith, would most likely promote the
company’s success for the benefit of its members as a whole, and in doing so have regard (among other matters) to:
S172(1) (A) The likely consequences of any decision in the long term:
The director understands Tangle Teezer’s business and the evolving environment in which it operates. Tangle
Teezer’s 5 Year strategic framework ensures that all board decisions are consistent with the vision of becoming the #1 brand for healthy hair. This strategic framework acts as a guide to ensure decision making supports the long term sustainable development of the brand, commercially and operationally with continued product innovation at its core.
The board continues to take account of the challenging global environment in its decision making, whether that be the impact of Covid-19, the war in Ukraine, Brexit, inflation or other potential macroeconomic risks. Decisions have been made to continue the international development of the brand to mitigate these risks, supported by additional localised manufacturing and supply chain developments.
172(1) (B) The interests of Tangle Teezer’s employees:
Tangle Teezer was once again GPTW (Great Place to Work) certified in 2023. Our employees are central to the delivery of the company strategy and ambitions and regular engagement is vital for continuous improvement. The process and results demonstrate our commitment to people, with due consideration to employees part of every decision made by the board. This has included decisions on new office locations in the UK and US to support business and employee growth.
Significant efforts are made to ensure that Tangle Teezer remains a responsible employer from pay and benefits to health, safety and workplace environment. The company continues to benchmark employee pay and conditions to ensure fairness for employees, invests in employee welfare and development and is constantly developing our people strategy and resources. The board and management team communicate regularly with the organisation to ensure alignment of objectives and drive engagement.
TANGLE TEEZER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
S172(1) (C) The need to foster Tangle Teezer’s business relationships with suppliers, customers and others:
Strong and mutually beneficial relationships with suppliers, customers and other partners are fundamental pillars for Tangle Teezer’s operational success.
Customers
The board is committed to understanding our customers’ needs, continuing to engage through many different social and customer service platforms, using feedback to support future developments and decision making. This has helped us to establish a focused product portfolio addressing different hair types and different needs.
The company works with distributors in certain markets to deliver the Tangle Teezer brand to the global audience. It is vital that these relationships are mutually beneficial and that key long term strategic partnerships are formed to support the future development of the brand and market growth.
Partners and suppliers
Tendering to ensure equal opportunities for suppliers and best commercial outcome for the business.
Ensuring that new partners and suppliers match our values and we strive to establish long term sustainable relationships.
This has been further supported by the introduction of a supplier onboarding portal during 2023, bringing even greater consistency to supplier selection and gathering key ESG information.
The business has made decisions to diversify its manufacturing, adding new suppliers and capacity to support growth, while maintaining strong partnerships with existing suppliers.
S172(1) (D) The impact of Tangle Teezer’s operations on the community and the environment:
Tangle Teezer engages in regular consultations with external consultants to gain valuable perspectives on the ways in which the company's activities could impact the local community or environment.
At Tangle Teezer, we’ve always been a brand that cares, and that is reflected in the decisions we make. We care about our customers, we care about hair and we care how we treat the planet we all live on. Dedicated updates on climate, environmental, social and governance related matters, covering all aspects of the company's business are reviewed at regular board meetings, and the board reviews progress against any action it considers is required. There are further examples of our dedicated approach to ESG in the ESG section of the strategic report and the board ensures that all decisions made consider the impact on our community and environment.
S172(1) (E) The desirability of Tangle Teezer maintaining a reputation for high standards of business conduct:
The desirability of Tangle Teezer to maintain its reputation for high standards of business conduct, translates to director's intention to behave responsibly and ensure that the business operates in a responsible manner within the high standards of business conduct and good governance.
Regular communication amongst the director and employees and effective, formally recorded board meetings ensure such standards are maintained. Where appropriate, independent legal advice is obtained to support the decision-making process.
Tangle Teezer has an established dedicated compliance team that ensures the highest standards of conduct and compliance across all parts of the organisation, with regular board interaction ensuring this is fundamental to decision making.
TANGLE TEEZER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
S172(1) (F) The need to act fairly as between members of the company:
The director is responsible for choosing the course of actions which enable Tangle Teezer to achieve its long-term strategy, taking into consideration the impact on stakeholders. In doing so, the director acts fairly as between the company’s members but is not required to balance the business interest with those of other stakeholders, and this can sometimes mean that certain stakeholder interests may not be fully aligned.
Principal decisions
The principal decisions of the business are disclosed below:
The business made the decision to further diversify its manufacturing during the year. The business has established localised manufacturing and a supply chain in North America and Asia, alongside established manufacturing in the UK. The decision to take a localised approach is leading to reduced logistics costs, shorter lead times and a reduced carbon footprint, while providing extra capacity to support continued growth and insulating the business against any future global challenges.
This report was approved by the board and signed on its behalf by:
Mr James Vowles
Director
24 May 2024
TANGLE TEEZER LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
The director presents his annual report and the audited financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of design and distribution of Tangle Teezer specialist hairbrushes and associated products. The majority of products are manufactured in the UK.
Business review, future developments and risks
Included in the strategic report on pages 1 - 6 are business review, future developments and risks.
Results and dividends
The results for the year are set out on page 13.
No dividends were paid (2022: £nil). The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr James Vowles
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its director during the year. These provisions remain in force at the date of approval of these financial statements.
Independent auditors
The auditors, PricewaterhouseCoopers LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditors
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 auditors are unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as director in order to make himself aware of all relevant audit information and to establish that the company’s auditors are aware of that information.
Going concern
The director presents the business as a going concern. The business remains in a strong position, with continued growth in sales, strong maintainable cash generation with a significant reduction in bank debt.
In recent years the business has continued to perform strongly despite the impact of the Covid-19 pandemic, Brexit, the war in Ukraine, higher levels of inflation and more regionalised issues such as the decline in the livestreaming channel in China. Despite this macroeconomic uncertainty the Tangle Teezer business has continued to see sales grow strongly in key markets, with sustainable improvements to margins and profitability, demonstrating the resilience of the business.
The business has further established localised manufacturing and a supply chain in the US and Asia, alongside established manufacturing in the UK. This localised approach is leading to reduced logistics costs, shorter lead times and a reduced carbon footprint, while providing extra capacity to support continued growth and insulating the business against any future global challenges.
At 31 December 2023 the company had net current assets of £26,366,000 (2022: £23,161,000). The business remains well insulated against potential global macroeconomic risks due to its balanced mix of channels and geographies, strong operating margins, flexible cost base and strong balance sheet, and the outlook for 2024 and beyond remains positive. The director has reviewed the cashflows and performed sensitivities, including a plausible downside, and believe it is appropriate for the financial statements to be prepared on a going concern basis.
TANGLE TEEZER LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Statement of stakeholder engagement
Statement of stakeholder engagement is included in the strategic report on pages 1 - 6.
Energy and carbon report
Notes:
Total energy consumption includes all direct energy use across the company's UK operations.
Associated Greenhouse gases have been calculated in conjunction with a 3rd party consultant and include all Scope 1 and Scope 2 emissions generated through the business operations. These are then applied to appropriate intensity metrics for the business, number of employees and turnover.
The business continues to take its energy consumption and emissions seriously, with our environmental footprint factored into all key decision making. Scope 1 and 2 energy consumption has increased in 2023 versus 2022, as we retained responsibility for some energy usage in our distribution centre, but intensity ratios remained in line with prior year due to business growth. Energy consumption remains below 2021 levels.
Office energy consumption in 2023 increased by 5% versus 2022 as employees returned to office working but remains 19% below pre Covid-19 levels (2019).
TANGLE TEEZER LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standards applicable in the UK and Republic of Ireland", and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
This report was approved by the board and signed on its behalf by:
Mr James Vowles
Director
24 May 2024
TANGLE TEEZER LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF TANGLE TEEZER LIMITED
- 10 -
Report on the audit of the financial statements
Opinion
In our opinion, Tangle Teezer Limited’s 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 (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial statements (the “Annual Report”), which comprise: statement of financial position as at 31 December 2023; the statement of comprehensive income and statement of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
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.
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
TANGLE TEEZER LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF TANGLE TEEZER LIMITED
- 11 -
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The director is responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic report and Director's report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
Strategic report and Director's reporttrue
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Director's report for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Director's report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of director's responsibilities, the director is responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The director is also responsible for such internal control as they 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
TANGLE TEEZER LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF TANGLE TEEZER LIMITED
- 12 -
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed by the engagement team included:
reviewing financial statement disclosures to underlying supporting documentation;
identifying and testing journals entries meeting specific fraud criteria; and challenging assumptions made by management in its significant accounting estimates.
enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations;
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
certain disclosures of director’s remuneration specified by law are not made; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Suzanne Woolfson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Watford
24 May 2024
TANGLE TEEZER LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£'000
£'000
Turnover
3
37,073
36,808
Cost of sales
(19,562)
(19,471)
Gross profit
17,511
17,337
Administrative expenses
(12,739)
(12,640)
Operating profit
4
4,772
4,697
Interest receivable and similar income
8
162
196
Profit before taxation
4,934
4,893
Tax on profit
9
(1,438)
(1,534)
Profit for the financial year
3,496
3,359
Total comprehensive income for the year
3,496
3,359
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
The notes on pages 16 to 30 form part of these financial statements.
TANGLE TEEZER LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 14 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Intangible assets
10
2,589
2,069
Tangible assets
11
1,463
1,280
Investments
12
1
1
4,053
3,350
Current assets
Stocks
14
5,943
6,278
Debtors falling due after more than one year
15
130
Debtors falling due within one year
15
26,258
18,649
Cash at bank and in hand
1,704
2,673
33,905
27,730
Creditors: amounts falling due within one year
16
(7,539)
(4,569)
Net current assets
26,366
23,161
Total assets less current liabilities
30,419
26,511
Provisions for liabilities
Provisions
17
(175)
(175)
Deferred tax liability
18
(412)
(587)
(175)
Net assets
29,832
26,336
Capital and reserves
Called up share capital
20
Profit and loss reserve
29,832
26,336
Total equity
29,832
26,336
The notes on pages 16 to 30 form part of these financial statements.
The financial statements on pages 13 to 30 were approved and signed by the director and authorised for issue on 24 May 2024.
Mr James Vowles
Director
Company Registration No. 05396577
TANGLE TEEZER LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Called up share capital
Profit and loss reserve
Total equity
£'000
£'000
£'000
Balance at 1 January 2022
22,977
22,977
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
3,359
3,359
Balance at 31 December 2022
26,336
26,336
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
3,496
3,496
Balance at 31 December 2023
29,832
29,832
The notes on pages 16 to 30 form part of these financial statements.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
General information
Tangle Teezer Limited is a private company limited by shares and is incorporated and domiciled in England and Wales. The registered office is 1st and 2nd floor, 205 Stockwell Road, London, United Kingdom, SW9 9SL.
The principal activity of the company continued to be that of design and distribution of Tangle Teezer specialist hairbrushes and associated products. The majority of products are manufactured in the UK.
1.1
Statement of compliance
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.
1.2
Basis of preparation and summary of significant accounting policies
The financial statements have been prepared under the historical cost convention. The principal accounting policies applied are set out below.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
Section 26 ‘Share based Payment’ Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated financial statements. The financial statements present information about the company as an individual entity and not about its group.
Tangle Teezer Limited is a wholly owned subsidiary of Dragon MidCo Limited, which prepares consolidated financial statements. The results of Tangle Teezer Limited are included in the consolidated financial statements of Dragon MidCo Limited which are available from 1st and 2nd floors, 205 Stockwell Road, London, United Kingdom, SW9 9SL.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.3
Going concern
The directors presenttrues the business as a going concern. The business remains in a strong position, with continued growth in sales, strong maintainable cash generation with a significant reduction in bank debt.
In recent years the business has continued to perform strongly despite the impact of the Covid-19 pandemic, Brexit, the war in Ukraine, higher levels of inflation and more regionalised issues such as the decline in the livestreaming channel in China. Despite this macroeconomic uncertainty the Tangle Teezer business has continued to see sales grow strongly in key markets, with sustainable improvements to margins and profitability, demonstrating the resilience of the business.
The business has further established localised manufacturing and a supply chain in the US and Asia, alongside established manufacturing in the UK. This localised approach is leading to reduced logistics costs, shorter lead times and a reduced carbon footprint, while providing extra capacity to support continued growth and insulating the business against any future global challenges.
At 31 December 2023 the company had net current assets of £26,366,000 (2022: £23,161,000). The business remains well insulated against potential global macroeconomic risks due to its balanced mix of channels and geographies, strong operating margins, flexible cost base and strong balance sheet, and the outlook for 2024 and beyond remains positive. The director has reviewed the cashflows and performed sensitivities, including a plausible downside, and believe it is appropriate for the financial statements to be prepared on a going concern basis.
1.4
Turnover
The company manufactures and sells specialist hair brushes and their associated products. Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and it can be reliably measured. Turnover 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 has transferred the significant risks and rewards of ownership to the buyer;
the retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of can be measured reliably;
it is probable that the 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.
1.5
Research and development expenditure
Expenditure on pure and applied research is charged to the statement of comprehensive income in the year in which it is incurred.
Development costs are charged to the statement of comprehensive income in the year of expenditure, unless individual projects satisfy all of the following criteria:
the project is clearly defined and related expenditure is separately identifiable;
the project is technically feasible and commercially viable;
current and future costs are expected to be exceeded by future sales; and
adequate resources exist for the project to be completed.
In such circumstances the costs are carried forward and amortised over a period not exceeding ten years, commencing in the year the company starts to benefit from the expenditure.
Patents and licences are stated at cost less amortisation. Amortisation is provided at 10% per annum in order to write off each asset over its estimated useful life.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.6
Intangible fixed assets other than goodwill
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:
Software development
4 years
Development expenditure
10 years
Patents
10 years
Intellectual property
7-11 years
Development expenditure is amortised over the NPD ( new product development) life of the project.
Patents are amortised over their useful life.
Intellectual property is not amortised in the year of acquisition.
Consideration of obsolescence, future changes in technology, competition, and other economic factors have been used in determining the estimated useful life of the software development capitalised costs.
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. 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.
The company adds to the carrying amount of an item of non-current assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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:
Plant and machinery
20% - 25%
Fixtures and fittings
25%
Motor vehicles
10%
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 the statement of comprehensive income.
1.8
Fixed asset investments
Investments in subsidiaries are measured at cost less accumulated impairment.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.9
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 in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if the reasons for the impairment loss have ceased to apply.
1.10
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.11
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.
1.12
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.
Basic financial assets
Basic financial assets, including trade and other debtors, amounts owed by group undertakings and cash and bank balances, are recognised at transaction price.
Impairment of financial assets
The company makes an estimate of the recoverable value of its trade and other debtors. Where necessary an impairment provision is made.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Classification of financial liabilities
Basic financial liabilities, including trade and other creditors, loans and borrowings, and amounts owed by group undertakings are recognised at transaction price.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.13
Share capital
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.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing 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 taxable 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 income statement, 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.
1.15
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.16
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of tangible and intangible assets
Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash generating unit, the viability and expected future performance of that unit.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 22 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible assets
Tangible assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are considered. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Provisions
Provision is made for asset retirement obligations and dilapidations. These provisions require management's best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rate used to establish net present value of the obligations require management's judgement.
Leases
Determine whether leases entered into by the company either as a lessor or a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Stocks provision
When calculating the stocks provision, management considers the nature and condition of the stocks, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. If stocks are deemed to be impaired and not in saleable condition, or the product is obsolete, the carrying value is reduced to zero. If the product line is deemed categorised as discontinued, a provision is taken for all stocks above 6 months of sales, based on current sell through rates. Refer to note note,note31 for the net carrying amount of the inventory.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
3
Turnover
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
8,001
6,384
Rest of Europe
14,562
13,579
Rest of the World
14,510
16,845
37,073
36,808
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses/(gains)
23
(23)
Research and development costs
198
345
Depreciation of owned tangible fixed assets
578
515
Amortisation of intangible assets
412
369
Operating lease charges
461
1,190
5
Auditors' remuneration
2023
2022
Fees payable to the company's auditors and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
129
119
For other services
Other assurance services
7
Taxation compliance services
33
28
All other non-audit services
70
40
103
75
6
Employees
The average monthly number of persons (including the director) employed by the company during the year was:
2023
2022
Number
Number
Employees
65
61
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 24 -
Their aggregate remuneration comprised:
2023
2022
£'000
£'000
Wages and salaries
4,440
3,608
Social security costs
538
424
Other pension costs
173
127
5,151
4,159
7
Director's remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
346
342
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£'000
£'000
Remuneration for qualifying services
346
342
8
Interest receivable and similar income
2023
2022
£'000
£'000
Interest receivable from group companies
162
196
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
9
Tax on profit
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current year
896
832
Deferred tax
Origination and reversal of timing differences
509
2
Changes in tax rates
33
169
Adjustment in respect of prior years
531
Total deferred tax
542
702
Total tax charge
1,438
1,534
Factors affecting income tax for the year
With effect from 1 April 2023, the UK corporation tax rate increased from 19.00% to 25.00%. The new blended rate for the year is 23.50% (2022: 19.00%).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the UK blended rate of tax as follows:
2023
2022
£'000
£'000
Profit before taxation
4,934
4,893
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
1,159
930
Tax effect of expenses that are not deductible in determining taxable profit
50
5
Effect of change in corporation tax rate
33
169
Permanent capital allowances in excess of depreciation
464
2
Research and development tax credit
(269)
(136)
Deferred tax adjustment in respect of prior years
531
Other adjustments
1
33
Group relief received
(576)
(704)
Group relief surrendered
576
704
Taxation charge for the year
1,438
1,534
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
10
Intangible assets
Software development
Development expenditure
Patents
Intellectual property
Total
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
585
1,481
1,089
100
3,255
Additions
114
603
215
-
932
Disposals
(97)
(52)
(88)
-
(237)
At 31 December 2023
602
2,032
1,216
100
3,950
Accumulated amortisation
At 1 January 2023
337
355
472
22
1,186
Amortisation charged for the year
127
165
109
11
412
Disposals
(97)
(52)
(88)
-
(237)
At 31 December 2023
367
468
493
33
1,361
Carrying amount
At 31 December 2023
235
1,564
723
67
2,589
At 31 December 2022
248
1,126
617
78
2,069
11
Tangible assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
2,403
42
17
2,462
Additions
741
41
782
Disposals
(48)
(30)
(17)
(95)
At 31 December 2023
3,096
53
3,149
Accumulated depreciation
At 1 January 2023
1,146
21
15
1,182
Depreciation charged in the year
565
11
2
578
Eliminated in respect of disposals
(38)
(19)
(17)
(74)
At 31 December 2023
1,673
13
1,686
Carrying amount
At 31 December 2023
1,423
40
1,463
At 31 December 2022
1,257
21
2
1,280
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
12
Investments
2023
2022
Notes
£'000
£'000
Investments in subsidiaries
13
1
1
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Tangle Teezer Inc.
Bold 3PL, 1125 E 4th Ave, Hutchinson, KS 67501 United States
Distribution of specialist hair brushes and their associated products
Ordinary
100.00
Pet Teezer Limited
1st and 2nd floor, 205 Stockwell Road, London SW9 9SL United Kingdom
Dormant company
Ordinary
100.00
14
Stocks
2023
2022
£'000
£'000
Raw materials and consumables
1,230
1,258
Finished goods and goods for resale
4,713
5,020
5,943
6,278
During the year £15,669,000 of stocks (2022: £16,455,000) was recognised as an expense and included within cost of sales in the statement of comprehensive income.
During the year £514,000 of stocks was written off (2022: £301,000).
15
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
5,879
4,956
Amounts owed by group undertakings
18,834
12,700
Other debtors
847
385
Prepayments and accrued income
698
608
26,258
18,649
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Debtors
(Continued)
- 28 -
2023
2022
Amounts falling due after more than one year:
£'000
£'000
Deferred tax asset (note 18)
130
Total debtors
26,258
18,779
Included within amounts owed by group undertakings is £4,956,000 (2022: £4,794,000) loan receivable from the immediate parent company, Dragon BidCo Limited. The loan bears an annual interest at 5%, is unsecured and repayable on demand.
The remaining amounts owed by group undertakings are interest free, unsecured and repayable on demand.
16
Creditors: amounts falling due within one year
2023
2022
£'000
£'000
Trade creditors
1,801
1,496
Amounts owed to group undertakings
3,207
1,284
Corporation tax
510
128
Other taxation and social security
118
54
Other creditors
43
35
Accruals and deferred income
1,860
1,572
7,539
4,569
Amounts owed to group undertakings are interest free, unsecured and repayable on demand.
17
Provisions for liabilities
2023
2022
£'000
£'000
Dilapidations provision
175
175
Movements on provisions:
Dilapidations provision
£'000
At 1 January 2023 and 31 December 2023
175
As part of the company's property leasing arrangements there is an obligation to repair damages which incur during the life of the lease, such as wear and tear. The cost is charged to profit and loss as the obligation arises. The provision is expected to be utilised within the next year as the leases terminate.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
18
Deferred taxation
The following are the major deferred tax assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£'000
£'000
£'000
£'000
Accelerated capital allowances
412
-
-
130
2023
Movements in the year:
£'000
Asset at 1 January 2023
130
Charge to profit or loss
(542)
Liability at 31 December 2023
(412)
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
173
127
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.
20
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of 0.1p each
180,002
180,002
-
-
"A" ordinary shares of £1 each
100
100
-
-
180,102
180,102
Ordinary shares rank pari passu and have full voting, dividend and distribution rights. These shares are non-redeemable.
"A" ordinary shares have no voting and dividends rights and have rights to participate in capital distributions arising only in certain circumstances and above certain levels of value. These shares are non-redeemable.
TANGLE TEEZER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
21
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
£'000
£'000
Within one year
377
212
Between two and five years
12
216
In over five years
2
389
430
22
Related party transactions
The company has taken advantage of the exemption under section 33.1A of FRS102 from disclosing transactions or balances with entities which form part of the group.
23
Ultimate controlling party
The company's immediate parent company is Dragon BidCo Limited, the company registered and incorporated in England and Wales. Dragon BidCo Limited owns 100% of the company's share capital and is itself a wholly owned subsidiary of Dragon MidCo Limited. Dragon MidCo Limited prepares consolidated financial statements which include results of Tangle Teezer Limited and are available from 1st and 2nd floor, 205 Stockwell Road, London, United Kingdom, SW9 9SL.
The company's ultimate parent company is Dragon TopCo Limited, the company registered and incorporated in Guernsey. It is the largest group for which the consolidated financial statements are prepared. The financial statements of Dragon Topco Limited can be obtained from its office at Ground Floor, Cambridge House, Le Truchot, St Peter Port, Guernsey GY1 1WD.
The company's ultimate controlling party is Mayfair Equity Partners LLP which is based at 8 Hanover Street, London W1S 1YQ.
24
Events after the reporting date
There were no significant events after the reporting date.
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