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Company No: 06059366 (England and Wales)

FEDERICI BRANDS LIMITED

Annual Report and Financial Statements
For the financial year ended 31 December 2023

FEDERICI BRANDS LIMITED

Annual Report and Financial Statements

For the financial year ended 31 December 2023

Contents

FEDERICI BRANDS LIMITED

COMPANY INFORMATION

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

COMPANY INFORMATION (continued)

For the financial year ended 31 December 2023
DIRECTOR Gail Marie Federici
REGISTERED OFFICE 22 Chancery Lane
London
WC2A 1LS
England
United Kingdom
COMPANY NUMBER 06059366 (England and Wales)
AUDITOR Dixon Wilson Audit Services LLP
22 Chancery Lane
London
WC2A 1LS
United Kingdom
FEDERICI BRANDS LIMITED

STRATEGIC REPORT

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

STRATEGIC REPORT (continued)

For the financial year ended 31 December 2023

The director present their Strategic Report for the financial year ended 31 December 2023.

REVIEW OF THE BUSINESS

Federici Brands Limited is known for disruptive innovation in the beauty industry. Customer-obsessed, renegade thinkers, we are committed to creating the highest quality products to address real, unmet consumer needs.

The business has a synergetic omni-channel distribution strategy that places it in a strong position against its competition. Our three main sales channels are Professional, Prestige Retail, and Direct-to-Consumer, which work together to fortify relationships with current customers and introduce our products to new customers. This has enabled profitability to increase year on year as the sales mix has pivoted more towards higher margin direct-to-consumer sales and away from lower margin professional sales.

The company has invested heavily in its people, systems and processes which has generated efficiencies both financially and operationally and given the brand capacity to scale its growth rapidly.

RESULTS AND PERFORMANCE

The business turnover increased to £43,718,522 ( 2022 : £15,593,908) which was a growth of 280.3% and gross profit increased to £33,013,849 (2022 : £10,959,148) which was driven by continued growth in brand equity resulting from effective marketing and advertising that communicates clearly to our customers. The innovative products are backed by science and created to solve real, unmet consumer needs which has ultimately led to the brand being seen as an industry leader in haircare.

Naturally, shareholders funds have increased in line with profit year on year.

KEY PERFORMANCE INDICATORS ('KPIS')

The company uses a range of performance measures to monitor and manage the business effectively. These are both financial and non-financial, and the most significant of these are the following:

2023 2022
£ £
Turnover 43,718,522 15,593,908
Operating profit 15,128,799 1,924,061
Profit for the financial year 11,398,300 1,484,112
Total Shareholders' Funds 14,296,030 2,897,730

Gross margin in the year ended 31 December 2023 has increased to 74.9% (2022 - 70.3%)

PRINCIPAL RISKS AND UNCERTAINTIES

The principal financial risks arising from the company’s activities and the company’s policies to address these risks are set out below:

Liquidity risk
The company has generated positive cash flows in the year ended 31 December 2023 and maintains tight controls on liquidity to ensure that the business continues to have liquid resources to meet the business needs and commitments.

Foreign exchange risk
The company’s Turnover is generated in sterling and certain products are manufactured internationally, which give rise to a certain level of currency risk. However, currency risk is viewed as minimal and monitored regularly.

Credit risk
The company’s revenue is generated from third party customers. There is a robust credit control process in place to minimise the risk of the third-party customers defaulting on their debt. This includes (but is not limited to) using a reputable credit reference agency to credit check new customers on the inception of the trading relationship and existing customers on at least an annual basis. In addition, the company has policies in place to insure its aged debt ledger balances.

Competitor Risk
There is an increasing level of competition in the beauty and personal care space in the UK. We believe that we manage this risk effectively by maintaining the high quality and performance of our products, by focusing on new and innovative products that solve our customer’s needs and by investing in people that drive our sales, marketing and operational strategy.

FUTURE DEVELOPMENTS

We expect that the general level of growth will continue to increase in the forthcoming financial year as we continue to invest in the brand through breakthrough advertising, innovative new products and maintaining good relationships with all key customers.

Approved by the Board of Directors and signed on its behalf by:

Gail Marie Federici
Director
22 Chancery Lane
London
WC2A 1LS
England
United Kingdom

24 September 2024

FEDERICI BRANDS LIMITED

DIRECTOR'S REPORT

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

DIRECTOR'S REPORT (continued)

For the financial year ended 31 December 2023

The director presents this annual report on the affairs of the Company, together with the financial statements and auditors’ report, for the financial year ended 31 December 2023.

PRINCIPAL ACTIVITIES

The principal activity of the company is the development, marketing and sale of innovative personal hair care products.

DIRECTOR

The director, who served during the financial year and to the date of this report except as noted, was as follows:

Gail Marie Federici

AUDITOR

Each of the persons who is a director at the date of approval of this report confirms that:

* So far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

* The director has taken all the steps that they ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.


Dixon Wilson Audit Services LLP have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditors in the absence of an Annual General Meeting.



Approved by and signed by the director:

Gail Marie Federici
Director

24 September 2024

FEDERICI BRANDS LIMITED

DIRECTOR'S RESPONSIBILITIES STATEMENT

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

DIRECTOR'S RESPONSIBILITIES STATEMENT (continued)

For the financial year ended 31 December 2023

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 and applicable law), including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Under company law the director must not approve the financial statements unless the director 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 financial period.

In preparing these financial statements, the director is required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgements and accounting estimates that are reasonable and prudent;
* State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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. The director 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.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FEDERICI BRANDS LIMITED

For the financial year ended 31 December 2023

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FEDERICI BRANDS LIMITED (continued)

For the financial year ended 31 December 2023

Report on the audit of the financial statements

Qualified Opinion

We have audited the financial statements of Federici Brands Limited (the ‘company’) for the year ended 31 December 2023 which comprise the profit and loss account, balance sheet, statement of changes in equity, statement of cashflows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

•give a true and fair view of the state of the company’s affairs as at 31 December 2023 and of its profit for the year then ended;

•have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

•have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

We were not appointed as auditor of the company until after 31 December 2022 and thus did not observe the counting of physical stock at 31 December 2022. We were unable to satisfy ourselves concerning stock quantities held at 31 December 2022, which are included in the balance sheet at £2,439,035, by using other audit procedures. Consequently, we were unable to determine whether the carrying value of stock and reserves brought forward at 1 January 2023 was materially correct and therefore, whether cost of sales in the year ended 31 December 2023 was materially correct.

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

Conclusions relating to going concern

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.

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. 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.

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 such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in 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 in this regard.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line without 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 gained an understanding of the legal and regulatory framework applicable to the company by considering, amongst other things, the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the assessed level of risk, but recognised that 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.

We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, UK Company Law and UK tax legislations.

Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries with third parties.

As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by management that represented a risk of material misstatement due to fraud.

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud.

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

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006

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

•the information given in the strategic report and the director’s report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•the strategic report and the director’s report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the director’s report.

Arising solely from the limitation on the scope of our work relating to stock at 1 January 2023, referred to above:

•we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

•we were unable to determine whether adequate accounting records have been kept.

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

•returns adequate for our audit have not been received from branches not visited by us; or

•the financial statements are not in agreement with the accounting records and returns; or

•certain disclosures of directors’ remuneration specified by law are not made.

Other matters

The corresponding information in respect of the year ended 31 December 2022 is unaudited.

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.

Charlotte Milner (Senior Statutory Auditor)
For and on behalf of
Dixon Wilson Audit Services LLP
Statutory Auditor

22 Chancery Lane
London
WC2A 1LS
United Kingdom

26 September 2024

FEDERICI BRANDS LIMITED

PROFIT AND LOSS ACCOUNT

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

PROFIT AND LOSS ACCOUNT (continued)

For the financial year ended 31 December 2023
Note 2023 2022
£ £
Turnover 3 43,718,522 15,593,908
Cost of sales ( 10,704,673) ( 4,634,760)
Gross profit 33,013,849 10,959,148
Distribution costs ( 1,763,385) ( 1,048,422)
Administrative expenses ( 16,125,324) ( 7,988,418)
Other operating income 3,659 1,753
Operating profit 15,128,799 1,924,061
Interest payable and similar expenses 4 ( 216,233) ( 91,701)
Profit before taxation 5 14,912,566 1,832,360
Tax on profit 8 ( 3,514,266) ( 348,248)
Profit for the financial year 11,398,300 1,484,112
FEDERICI BRANDS LIMITED

BALANCE SHEET

As at 31 December 2023
FEDERICI BRANDS LIMITED

BALANCE SHEET (continued)

As at 31 December 2023
Note 2023 2022
£ £
Fixed assets
Tangible assets 9 19,257 14,964
Investments 10 90 90
19,347 15,054
Current assets
Stocks 11 4,660,846 2,439,035
Debtors 12 8,758,239 3,128,047
Cash at bank and in hand 13 10,830,449 5,198,112
24,249,534 10,765,194
Creditors: amounts falling due within one year 14 ( 9,972,851) ( 7,882,518)
Net current assets 14,276,683 2,882,676
Total assets less current liabilities 14,296,030 2,897,730
Net assets 14,296,030 2,897,730
Capital and reserves 16
Called-up share capital 1,000 1,000
Profit and loss account 14,295,030 2,896,730
Total shareholders' funds 14,296,030 2,897,730

The financial statements of Federici Brands Limited (registered number: 06059366) were approved and authorised for issue by the Board of Directors on 24 September 2024. They were signed on its behalf by:

Gail Marie Federici
Director
FEDERICI BRANDS LIMITED

STATEMENT OF CHANGES IN EQUITY

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

STATEMENT OF CHANGES IN EQUITY (continued)

For the financial year ended 31 December 2023
Called-up share capital Profit and loss account Total
£ £ £
At 01 January 2022 1,000 1,412,618 1,413,618
Profit for the financial year 0 1,484,112 1,484,112
Total comprehensive income 0 1,484,112 1,484,112
At 31 December 2022 1,000 2,896,730 2,897,730
At 01 January 2023 1,000 2,896,730 2,897,730
Profit for the financial year 0 11,398,300 11,398,300
Total comprehensive income 0 11,398,300 11,398,300
At 31 December 2023 1,000 14,295,030 14,296,030
FEDERICI BRANDS LIMITED

STATEMENT OF CASH FLOWS

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

STATEMENT OF CASH FLOWS (continued)

For the financial year ended 31 December 2023
2023 2022
£ £
Net cash flows from operating activities (note 18) 5,646,313 3,174,043
Cash flows from investing activities
Purchase of plant and machinery ( 13,976) ( 12,522)
Net cash flows from investing activities ( 13,976) ( 12,522)
Cash flows from financing activities
Net cash flows from financing activities 0 0
Net increase in cash and cash equivalents 5,632,337 3,161,521
Cash and cash equivalents at beginning of year 5,198,112 2,036,591
Cash and cash equivalents at end of year 10,830,449 5,198,112
Reconciliation to cash at bank and in hand:
Cash at bank and in hand at end of year 10,830,449 5,198,112
Cash and cash equivalents at end of year 10,830,449 5,198,112
FEDERICI BRANDS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
FEDERICI BRANDS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Federici Brands Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is 22 Chancery Lane, London, WC2A 1LS, England, United Kingdom.

The principal activities are set out in the Strategic Report.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Financial Reporting Standard 102 (FRS 102) applicable in the UK and Republic of Ireland issued by the Financial Reporting Council and the requirements of the Companies Act 2006.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

Going concern

The Company’s business activities, together with future developments and performance are set out in the Strategic Report. The Strategic Report describes the financial results of the Company and its exposure to liquidity, foreign exchange, credit and competitor risk.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet date are reported at the rates of exchange prevailing at that date.

Exchange differences are recognised in the Profit and Loss Account in the period in which they arise except for exchange differences arising on gains or losses on non-monetary items which are recognised in the Statement of Comprehensive Income.

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the sale of goods is recognised when the goods are physically delivered to the customer. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax is recognised where applicable in respect of timing differences that have originated but not reversed at the Balance Sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the Balance Sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

Defined contribution pension plan

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

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

Tangible fixed assets

Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment. The cost of tangible assets
includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives as follows;

Plant and machinery etc. 3 years straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

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

Fixed asset investments

Investments in equity shares which are not publicly traded are measured at cost less impairment.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost is calculated using the weighted average cost method. Provision is made for obsolete, slow-moving or defective items where appropriate.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventory to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling priceless costs to complete and sell; the impairment loss is recognised immediately in profit and loss.

Trade and other debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade and other debtors are initially recognised at transaction price and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts, except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtor.

Trade and other creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the endof the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is anunconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade and other creditors are initially recognised at transaction price and thereafter stated at amortised cost using theeffective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost.

Ordinary share capital

The ordinary share capital of the Company is presented as equity. Equity instruments are measured at fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Group accounts exemption

The Company has taken advantage of the exemption not to prepare consolidated accounts, on the basis that the only other group entity is a dormant company. The financial statements present information about the Company as an individual entity and not about its group.

The subsidiary is held as a fixed asset investment and is measured at cost less impairment.

2. Critical accounting judgements and key sources of estimation uncertainty

Estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and other factors that are considered to be relevant.

The director does not consider that any critical judgements have been made from key sources of estimation uncertainty.

3. Turnover

Turnover represents the fair value of goods provided to customers during the financial year excluding value added tax.

Breakdown by geographical market:

An analysis of the Company's turnover by geographical market is set out below.

2023 2022
£ £
United Kingdom 31,920,479 12,133,195
Europe 11,345,137 3,343,364
Rest of World 452,906 117,349
43,718,522 15,593,908

An analysis of the Company's turnover is as follows:

2023 2022
£ £
Sale of goods 43,718,522 15,593,908

4. Finance costs

2023 2022
£ £
Interest payable and similar expenses 216,233 91,701

5. Profit before taxation

Profit before taxation is stated after charging/(crediting):

2023 2022
£ £
Depreciation of tangible fixed assets (note 9) 9,683 14,923
Research and development 31,250 12,070
Foreign exchange (gains)/losses ( 169,569) 443,198

6. Auditor's remuneration

An analysis of the auditor's remuneration is as follows:

2023 2022
£ £
Fees payable to the Company’s auditor and its associates for the audit of the Company's annual financial statements: 18,000 0
Total audit fees 18,000 0
Taxation compliance services 1,450 1,400
Other services 10,932 10,653
Total non-audit fees 12,382 12,053

7. Staff number and costs

2023 2022
Number Number
The average monthly number of employees (including directors) was:
Administration 6 3
Sales 6 5
Marketing 8 7
Operations 4 3
Management 1 1
25 19

Their aggregate remuneration comprised:

2023 2022
£ £
Wages and salaries 1,826,537 1,246,592
Social security costs 216,938 151,666
Other retirement benefit costs 57,256 32,669
2,100,731 1,430,927

The Director received no remuneration during the current or previous financial year.

8. Tax on profit

2023 2022
£ £
Current tax on profit
UK corporation tax 3,498,277 359,894
Adjustments in respect of prior years
UK corporation tax 15,989 ( 11,646)
Total current tax 3,514,266 348,248
Total tax on profit 3,514,266 348,248
Tax reconciliation

The tax assessed for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK:

2023 2022
£ £
Profit before taxation 14,912,566 1,832,360
Tax on profit at standard UK corporation tax rate of 23.52% (2022: 19.00%) 3,507,436 348,148
Effects of:
Expenses not deductible for tax purposes 3,611 12,004
Income not taxable in determining taxable profit ( 11,760) 0
Adjustments in respect of prior years 15,989 ( 11,646)
- Capital allowances for year in excess of depreciation (1,010) (258)
Total tax charge for year 3,514,266 348,248

9. Tangible assets

Plant and machinery etc. Total
£ £
Cost
At 01 January 2023 51,683 51,683
Additions 13,976 13,976
At 31 December 2023 65,659 65,659
Accumulated depreciation
At 01 January 2023 36,719 36,719
Charge for the financial year 9,683 9,683
At 31 December 2023 46,402 46,402
Net book value
At 31 December 2023 19,257 19,257
At 31 December 2022 14,964 14,964

10. Fixed asset investments

2023 2022
£ £
Subsidiary undertakings 90 90

Investments in subsidiaries

2023
£
Cost
At 01 January 2023 90
At 31 December 2023 90
Carrying value at 31 December 2023 90
Carrying value at 31 December 2022 90

Investments in shares

Name of entity Registered office Principal activity Class of
shares
Ownership
31.12.2023
Ownership
31.12.2022
FBRP Limited (Ireland) 9/10 Fenain Street, Dublin, Ireland Dormant Oridnary 100.00% 100.00%

11. Stocks

2023 2022
£ £
Raw materials 1,129,615 637,907
Finished goods 3,531,231 1,801,128
4,660,846 2,439,035

12. Debtors

2023 2022
£ £
Trade debtors 6,663,514 3,022,562
Other debtors 332,581 150
Prepayments 1,490,826 40,951
Deposits 271,318 64,384
8,758,239 3,128,047

13. Cash and cash equivalents

2023 2022
£ £
Cash at bank and in hand 10,830,449 5,198,112

14. Creditors: amounts falling due within one year

2023 2022
£ £
Director loans (note 19) 143,930 146,246
Trade creditors 947,080 450,069
Amounts owed to Group undertakings (note 19) 90 90
Amounts owed to connected companies (note 19) 3,437,221 6,377,450
Payroll taxes payable 125,663 73,262
Taxation and social security 3,258,278 344,011
VAT 844,028 99,463
Accruals 1,188,704 273,194
Other creditors 27,857 118,733
9,972,851 7,882,518

15. Financial instruments

The carrying values of the Company’s financial assets and liabilities are summarised by category below:

2023 2022
£ £
Financial assets
Measured at undiscounted amount receivable
Trade debtors (note 12) 6,663,514 3,022,562
Other debtors (note 12) 332,581 150
6,996,095 3,022,712
Financial liabilities
Measured at undiscounted amount payable
Trade creditors (note 14) ( 947,080) ( 450,069)
Other payables (note 14) ( 16,707) ( 118,733)
Amounts owed to Group undertakings (note 14) ( 90) ( 90)
Amounts owed to connected companies (note 14) ( 3,437,221) ( 6,377,450)
Amounts owed to director (note 14) ( 143,930) ( 146,246)
(4,545,028) (7,092,588)

16. Called-up share capital and reserves

2023 2022
£ £
Allotted, called-up and fully-paid
1,000 Ordinary Shares shares of £ 1.00 each 1,000 1,000
Presented as follows:
Called-up share capital presented as equity 1,000 1,000

The Company's other reserves are as follows:

The profit and loss reserve represents cumulative profits or losses.

17. Financial commitments

Commitments

Total future minimum lease payments under non-cancellable operating leases are as follows:

2023 2022
£ £
within one year 98,365 0
between one and five years 438,301 0
536,666 0

Pensions

The Company operates a defined contribution pension scheme for the director and employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

2023 2022
£ £
Unpaid contributions due to the fund (inc. in other creditors) 11,150 7,033

18. Statement of Cash Flows

2023 2022
£ £
Operating profit 15,128,799 1,924,061
Adjustment for:
Depreciation and amortisation 9,683 14,921
Operating cash flows before movement in working capital 15,138,482 1,938,982
Increase in stocks ( 2,221,811) ( 944,671)
Increase in debtors ( 5,630,192) ( 1,344,060)
(Decrease)/increase in creditors ( 823,934) 3,896,052
Cash generated by operations 6,462,545 3,546,303
Income taxes paid ( 599,999) ( 280,559)
Interest paid ( 216,233) ( 91,701)
Net cash flows from operating activities 5,646,313 3,174,043

19. Related party transactions

Transactions with group companies

Amounts owed to Group undertakings

2023 2022
£ £
Due to FBRP Limited (Ireland) 90 90

The amounts owed to FBRP Limited (Ireland) are unsecured and repayable on demand.

Transactions with related parties or connected persons

Amounts owed to connected companies

2023 2022
£ £
Due to Federici Brands LLC - US 3,437,221 6,377,450

Federici Brands LLC is a connected company due to having the same majority shareholders.

During the year, the Company made sales of goods of £33,495 (2022 - £nil) to its connected company Federici Brands LLC.

During the year, the Company paid management expenses and royalty fees of £6,540,933 (2022 - £2,328,004) to its connected company, Federici Brands LLC.

During the year, the Company paid interest of £216,233 (2022 - £91,701) to its connected company, Federici Brands LLC.

Transactions with the entity’s director (or members of its governing body)

Amounts owed to director

2023 2022
£ £
Amounts owed to Director 143,930 146,246

At the year end the company owed amounts to the director totalling £143,930 (2022 - £146,246). During the year, £2,316 (2022 - £44,339) of the loan from the Director had been repaid. These amounts are unsecured, interest free and repayable on demand.