The directors present the strategic report for the period ended 31 December 2023.
This was another successful period for the company and turnover of £22.7m was achieved (Y/E 31.1.2023: £26.9m).
HHB Communications Ltd deftly navigated the challenging socio-economic environment of trading during a period of an unprecedented cost of living crisis brought on by inflationary and interest rate pressures exacerbated by the continuing war in Ukraine, post-pandemic slump impacting the UK economy as well as dealing with the complexities brought on by the US Writers’ and Actors’ strikes affecting the Broadcast and Post-production sector towards the latter part of 2023. The main focus of the company continues to be building on its enviable reputation, maintaining and asserting its position within the marketplace, and ensuring that its core business is sufficiently resourced and profitable across the HHB, Source and Scrub divisions whilst exploring all available opportunities to seek new business.
During the accounting period, all the shares in the HHB Communications Ltd were acquired by Midwich Ltd, an AIM listed business, on 12th July 2023 and the year end was changed to 31st December to align with the rest of the group.
Treasury operations and financial instruments
The directors regularly review the financial requirements of the company and the risks associated therewith. The company's operations are primarily financed from its retained earnings.
The company uses forward foreign currency contracts to reduce its exposure to foreign currency risks. The company does not use derivative financial instruments for trading purposes.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to interest rate risk on its borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
Foreign currency risk
The company's principal foreign currency exposure arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Risks of technological change and product availability
The key business risks and uncertainties affecting the company are related to technological change, product availability and competition, both nationally and internationally. The business environment within which the company operates is subject to frequent technological change, but through close contact with both our customers and suppliers our portfolio of new and innovative brands and products continues to develop and change both organically and through the acquisition of exclusive distribution rights.
The key financial performance indicators used to monitor the performance of the company are set out below:
Taking into account the challenging market conditions as described above and continuing to deal with global supply chain issues, during the 11-month period the turnover decreased by 15.4% to £22.7 million compared to y/e Jan-2023: £26.9m ( the decrease would be 7.7% to £24.8m if extrapolated to a 12-month like for like period) The company continues to trade without incurring any bad debts, which highlights the prestigious position it has cemented within its core markets and customers following years of successful trading.
Gross profit decreased by £1.7m in the 11-month period from £8m in y/e Jan-23 to £6.3m (£1.1m reduction to GP £6.9m if extrapolated to a 12-month like for like period. This was partially impacted by a one-off event regarding inventory control in order to align with Group policies, which was responsible for 1.3% of the reduction. Cash generation continued to be positive resulting in bank and cash equivalent balances of £5.3m as at end of the period.
The company continued focusing on streamlining its distribution and administrative expenses, however owing to one-off exceptional costs incurred within the period, the company's profit before taxation has seen a decrease from £2.2m in y/e Jan-23 to £0.9m in the period (£1.35m if the effect of exceptional costs was removed for a 12-month like for like period)
Future developments
In 2023 HHB Communications Ltd continued to build on its reputation for being the leading UK supplier of professional audio products and services to the media and entertainment industries. In addition to maintaining its business and creating new opportunities as described below, the company continued focusing on sustainability and reducing its carbon footprint by reviewing all aspects of the impact of its operations.
During the 11-month period HHB continued to work with many notable post-production facilities, film and recording studios, and broadcasters including but not limited to: BBC, Abbey Road Studios, University of Greenwich, University of West London, Bubble, Dock 10, Streamland Media, Azimuth, University of York, ITN, ITV, Channel 4 and Maple Street Studios amongst others. Across these customers HHB has facilitated the equipping of several entirely new facilities as well as major upgrades to existing studios.
HHB has continually focused on growing its existing core product partnerships, with the recently appointed distribution brand Source Elements. In addition, HHB was chosen as the sole Dante Connect reseller for the UK – with the first UK customer being Sky quickly followed by Lego. After years of predominately focusing on Pro Tools and mixing consoles, HHB worked closely with Avid and Harbour Post Production to initially test then onboard the Nexis as their audio storage solution.
New brands for Source Distribution in 2024 include Bose Professional loudspeakers, Buchla synthesisers, Dreadbox synthesiser modules and the VegaTrem guitar tremolo system.
During the 11-month period Source Distribution was featured frequently in industry news with a number of distributed products being awarded Specialist Press Awards highlighting Source Distribution’s influence and reputation within the industry such as but not limited to:
Buchla in the Financial Times HTSI magazine which featured the Buchla Music Easel in their Christmas Gift Guide 2023.
Sound on Sound front cover and in-depth review of the Expressive E Osmose synthesiser.
Sound on Sound front cover and in-depth review of the Rode NT1 5th Gen microphone.
What HiFi Product of the Year in the Wired Headphones category for the Rode NTH100 headphones
Additionally, during the period Source Distribution worked with a selected group of key influencers resulting in generating 520,000 views of Mogami content further enhancing the reputation and visibility of this iconic Japanese cable brand.
From the perspective of the Board of the Company, as a result of the Group (Midwich Group plc) governance structure, the matters that it is responsible for considering under Section 172 (1) of the Companies Act 2006 (‘s172’) have been considered to an appropriate extent by the Board at HHB Communications Ltd in relation both to the Group and to the Company. The Board has also considered all relevant matters where appropriate. To the extent necessary for an understanding of the development, performance and position of the entity, the Board have considered that they have acted in the way they consider would be most likely to promote the success of the Company for the benefit of all its stakeholders whilst taking into account the impact of business decisions on the stakeholders. Positive communication and engagement with key stakeholder groups such as but not limited to employees, customers, and suppliers is of paramount importance for the success of the Company and is carefully considered within the implementation of the Company’s strategy. In addition, an explanation of how the Group Board has considered the matters set out in s172 (for the Group and for the Company) is set out in the Group’s annual report, which does not form part of this report.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2023.
The results for the period are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.
We have audited the financial statements of HHB Communications Limited (the 'company') for the period ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for 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:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; trade and import and export legislation; the waste electronic and electronic equipment (WEEE) regulations; data protection legislation; anti-bribery and anti-corruption legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates in particular in relation to the warranty and stock provision estimates;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, or large and unusual journal entries;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the balance sheet includes a number of items selected on a random basis; and
Discussions with management.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
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.
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.
HHB Communications Limited is a company limited by shares incorporated in England and Wales. The registered office is Vinces Road, Diss, Norfolk, IP22 4YT.
The financial statements are presented for an 11 month period to bring the period end date in line with its new parent company, Midwich Limited and the Midwich Group. Comparative amounts presented in the financial statements (including the related notes) are therefore not entirely comparable.
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 company meets the definition of a qualifying entity under FRS 101 Reduced Disclosure Framework. These financial statements for the period ended 31 December 2023 are the first financial statements of HHB Communications Limited prepared in accordance with FRS 101. The company transitioned from UK GAAP to FRS 101 for all periods presented and the date of transition to FRS 101 was 1 February 2022.
The reported financial position and financial performance for the previous period are affected by the transition to FRS 101 and this is disclosed in note 29.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
the requirements of IAS 7 Statement of Cash Flows;
disclosure of the objectives, policies and processes for managing capital;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the requirements of IFRS 7 Financial Instruments: Disclosures;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 of IAS 24 Related Party Disclosures; and
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Where required, equivalent disclosures are given in the consolidated financial statements of Midwich Group plc.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
HHB Communications Limited is a wholly owned subsidiary of Midwich Group plc and the results of HHB Communications Limited are included in the consolidated financial statements of Midwich Group plc which are available from Vinces Road, Diss, Norfolk, United Kingdom, IP22 4YT.
The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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:
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 or .
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Warranties are provided on products sold by the company. Where the company is liable for these warranties, a provision is made for this. This provision requires management's best estimation of the costs that will be incurred in meeting its warranty obligations. In addition the timing of the cashflows and therefore the net present value of the obligation require management's judgement. At the period end, the warranty provision amounted to £277,661.
Stock is provided for where items are identified as slow moving or obsolete based on the ageing of the stock. The calculation of the provision involves management's best estimate of the timing and the percentages to be used in arriving at the level of the provision required to ensure stock is held at the lower of cost and net realisable value. At the period end, the stock provision amounted to £572,557.
In accordance with IFRS 16, material leases for right of use assets are capitalised with a corresponding liability. There is estimation uncertainty involved in arriving at the interest rate to be used in arriving at the present value of the lease payments unpaid at the commencement date of the lease. See note 18 for details.
The average monthly number of persons (including directors) employed by the company during the period was:
Their aggregate remuneration comprised:
The charge for the period can be reconciled to the profit per the income statement as follows:
The rate of corporation tax changed from 19% to 25% on 1 April 2023 and has resulted in an increase in the liability to corporation tax from this period.
Property, plant and equipment includes right-of-use assets, as follows:
HSBC Corporate Trustee Company (UK) Limited has a fixed and floating charge over all the property or undertaking of the company.
The directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
At the period end the directors made a provision for old and damaged stock. During the period there was a net debit to the income statement in respect of this totalling £104,864.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
The deferred tax asset set out above is expected to reverse after 12 months and is considered recoverable as the company is profitable and is expected to be for the foreseeable future.
The warranty provision relates to the estimated future cost of product repairs discounted to present value. £104,030 (2023: £175,838) of the provision is expected to be utilised in the next 12 months, with the balance expected to be utilised after 12 months.
The retained earning are wholly distributable,
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
The lease commitments outstanding at the period end totalled £36,866 (2023: £26,959)
At the period end the company owed its subsidiaries £28,929 (2023 - £28,929). These balances are shown in creditors amounts falling due in more than one year.
Amounts owed from the immediate parent company at the period end totalled £148,250 (2023: £148,250).
Amounts owed to group companies at the period end totalled £8,166 (2023: £Nil).
Amounts owed to a related company at the period end totalled £96,258 (2023: Nil). This company is related by virtue of having the same director.
Total remuneration, including pension contributions, paid to directors' family members amounted to £6,264 (2023 - £53,500).
The following transactions took place during the period from related companies at an arms length basis:
Purchases from companies with at least one director in common £Nil (2023: £49,998).
The company leased two premises from a related company and details of these leases are included in the lease liabilities note.
FRS 102 did not require significant operating leases to be capitalised with a corresponding liability to be included on the balance sheet. On transition to FRS 101, the company has calculated the present value of the lease payments and capitalised this, together with a corresponding liability being included on the balance sheet, from inception of the lease.
As at 31 January 2023, this resulted in a right of use asset for a leasehold property with a net book value of £186,770 and a corresponding liability carried forward at that date of £495,772.
During the year ended 31 January 2023, the unwinding of the lease liability resulted in an interest charge to the profit and loss account of £8,999. A depreciation charge has been made on the asset capitalised of £93,384.
As a result of the transition to FRS 101 from FRS 102, the adjustments arising as set out in this note have led to an adjustment to the deferred tax liability which resulted in the recognition of a deferred tax asset of £72,039 as at 31 January 2023 with an adjustment to the movement in deferred tax for that year of £23,651.
On transition to FRS 101, for the year ended 31 January 2023, wage costs totalling £2,390,396 have been reclassified from administrative expenses to distribution expenses to more accurately reflect the nature of these expenses.