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REGISTERED NUMBER: 08257609 (England and Wales)















COMPASSCO LIMITED

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2023






COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)






Contents of the Financial Statements
for the year ended 31 December 2023




Page

Company Information 1

Strategic Report 2 to 3

Report of the Directors 4 to 5

Report of the Independent Auditors 6 to 8

Income Statement 9

Other Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Statement of Cash Flows 13

Notes to the Statement of Cash Flows 14

Notes to the Financial Statements 15 to 24


COMPASSCO LIMITED

Company Information
for the year ended 31 December 2023







Directors: A M Butchers
N Butchers





Secretary: N Butchers





Registered office: First Floor
Saggar House
Princes Drive
Worcester
Worcestershire
WR1 2PG





Registered number: 08257609 (England and Wales)





Auditors: Cooper Parry Group Limited
New Derwent House
69-73 Theobalds Road
London
WC1X 8TA

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Strategic Report
for the year ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

Review of business
The company currently operates seven McDonalds stores, employing more than 770 staff in the Hemel Hempstead and Buckinghamshire area.

As a result of the 2023 menu and marketing strategy, alongside the execution of incremental price rises, the company has seen increased sales growth as the company continues to operate against the backdrop of significant macro-economic challenges.

Given the direct link between our approach to pricing, the external environment, and our success in relation to our customers, we will continue to remain close to understanding this relationship and look constantly to evaluate how our internal actions are impacting our customers.

The financial position of the company is increasing healthy with the balance sheet showing net assets of £967k compared to £585k in 2022.

Key performance indicators
Sales for the year amounted to £33.05 million, an increase of £13.31 million from 2022 giving an overall sales increase of approximately 67.44%. The growth in sales is predominantly due to the continued growth in delivery sales and the acquisition of three new stores within the year. On a like for like basis for the four stores trading in both financial years, sales increased by 8.15%.

The gross profit margin is 65.81% compared to 65.90% in 2022 and is in line with expectations.

Future developments
2023 economic trends are broadly expected to continue into 2024.

As in 2023, sales growth in 2024 will be predominantly driven by year on year pricing benefit. This will particularly benefit Q1 (Quarter 1) before we annualise price moves made in 2023. To counter any potential negative GC (Guest Count) impact from price rises, we have a strong marketing calendar, with particular focus on value at key parts of the year. The calendar also includes a higher number of innovative promotional pies and new McFlurry flavour variants, both of which drove strong incremental sales and visits in 2023. Given the uncertain market environment, we will as ever need to remain flexible and adaptive should we begin to see any risks to this plan.

We also expect to see continued incremental sales benefit in 2024 from the MyMcDonald's application, with a greater customer base engaged with the MyMcDonald's Rewards scheme, and refined CRM communications to encourage customer frequency.

Instores and Drive Thrus are likely to see similar levels and phasing of sales growth in 2024, as we move away from any lingering COVID-19 impact. The percentage of sales and phasing coming through McDelivery is likely to remain stable year on year.

The 2023 pricing strategy has been bold, utilising a front-loaded approach, with five pricing rounds overall. From this, circa 5% MBI (Menu Board Index) benefit will be carried into 2024.

The Price Strategy Group will continue to take a strategic, customer-led approach throughout 2024, for which four price moves are planned. Rather than utilising a front-loaded approach, the price rounds are expected to be more balanced in 2024, with the timing, scale and menu items included in the pricing recommendations leveraging the exciting marketing plan that is in place. As with recent years, the group will remain agile against the backdrop of a challenging external environment.

The 2024 pricing strategy will ensure gross margin growth, whilst maintaining the business' value proposition. The group will focus on driving sustainable growth - for example, building upon the work which has been done so far on value and delivery, and refining the long-term view of pricing and menu architecture.


COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Strategic Report
for the year ended 31 December 2023

Principal risks and uncertainties
The company is continually assessing all risks with an aim to mitigate any future threats these may have on the business.

Economic risk
Following some very challenging times, we are optimistic about the economic future. Customer confidence continues to rise and unemployment rates are falling. A cautious approach is still required as real disposable income continues to decline as the cost of living and interest rates continue to rise. Principal risks are increasing commodity prices, increased utility costs and labour rates adding pressure to margins with significant upward movements in interest rates that may also increase costs. The first mentioned risk is controlled by McDonald's collective purchasing initiatives.

The level of borrowing is such that interest rate increases remain manageable.

Supply Chain Inflation
We have continued to work at mitigating the impact of food and paper inflation within our 2024 outlook - this has resulted in further improvement with a range of 3% - 6% food and paper inflation now anticipated for the UK. We are also continuing to see increased levels of cost certainty, with an expectation that circa 40% of our costs will be secured by the end of December.

As with previous outlook, we expect a relatively flat profile through the year. The increases we are expecting continue to be driven by commodity price on particular categories, as well as market labour increases. The focus of McDonald's negotiations remains on assured supply and to put farmers and growers in a position to continue developing alongside the business.

Our 2024 forecast is made up of two elements:
- Baseline inflation of circa 1.5% carry over from 2023 increases.
- In-year inflation of 1.5% - 4.5% on prices negotiated for 2024.

Regulatory risks
The company's operations demand a high level of compliance within a wide range of regulatory requirements. In particular:
- Health and safety
- Hygiene procedures
- Employment laws
- Licensing
The above, along with a number of other areas, are monitored in detail by McDonald's, as being in the fast food industry brings a high level of regulatory concerns.

Consumer taste
Any material changes in the way the consumer views the fast food industry could have an adverse effect on the company. However, this can also work in the opposite direction and could assist the company to achieve growth. As a result, the company focuses, in detail, on recognising demographic trends, ensuring innovation and the use of the freshest and highest quality products through its stores. The company has strict policies to ensure that all stores are maintaining the McDonald's ethos.

Competitors
The fast food market is a very competitive market, with a high number of large competitors trading in the sector. In order to remain as one of the main players, McDonald's have dedicated teams who focus on ensuring they remain a leading company within the market. This allows them to compete with other large fast food chains.

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control, hence we are constantly assessing our plans in line with the current environment.

On behalf of the board:





A M Butchers - Director


26 September 2024

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Report of the Directors
for the year ended 31 December 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2023.

Principal activity
The principal activity of the company in the year under review was that of the operation of McDonald's franchised restaurants.

Dividends
Interim dividends per share were paid as follows:
Ordinary A £1 shares £800 - 31 December 2023
Ordinary B £1 shares £600 - 31 December 2023


The directors recommend that no final dividends be paid.

The total distribution of dividends for the year ended 31 December 2023 will be £ 140,000 .

Research and development
The company does not carry out any independent research and development. However the franchisor, McDonalds' Restaurants Limited, carries out its own research and development on behalf of all franchisees. The company makes a contribution towards this through its existing payments to the franchisor.

Director
A M Butchers held office during the whole of the period from 1 January 2023 to the date of this report.

Other changes in directors holding office are as follows:

N Butchers was appointed as a director after 31 December 2023 but prior to the date of this report.

Going concern
The company is in a net current liabilities position at the balance sheet date, however this is a reflection of the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting, and in doing so they have considered the period from the date of this report until 31 December 2025. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Employment of disabled persons
The company operates a policy of giving full & fair consideration to employment applications from disabled persons.

Provision of information to employees
The company has a system for providing employees with information of concern to them. It also consults employees on a regular basis so that their views can be taken into account in making decisions affecting them. It regularly to explains to employees the financial and economic factors affecting the performance of the company and makes them aware of the provision of training, career development and employment of disabled employees.

Directors' responsibilities statement
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.


COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Report of the Directors
for the year ended 31 December 2023

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

Statement as to disclosure of information to auditors
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors
The audit business of Haines Watts Birmingham LLP was acquired by Cooper Parry Group Limited on 14 November 2023. Haines Watts Birmingham LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place.

The auditors, Cooper Parry Group Limited, are deemed re-appointed under Section 487(2) of the Companies Act 2006.

On behalf of the board:





A M Butchers - Director


26 September 2024

Report of the Independent Auditors to the Members of
Compassco Limited

Opinion
We have audited the financial statements of Compassco Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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

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

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

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

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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 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 the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Report of the Independent Auditors to the Members of
Compassco Limited


Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on pages four and five, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

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:

Based on our understanding of the industry, we identified that the principal risks of non-compliance related to breaches of health and safety, including food hygiene. We considered the extent to which non-compliance might have a material affect on the financial statements.

We also considered those laws and regulations that have a direct impact on preparation of the financial statements, such as the Companies Act 2006. We examined management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of overriding of controls) and determined that the principal risks were relating to management bias in accounting estimates, in particular those of accrued liabilities and the useful life of tangible assets.

We also discussed with management the possibility of non-compliance with health and safety and food hygiene regulations and reviewed the management controls in place to detect such irregularities. Audit procedures included challenging assumptions made by management in their significant accounting estimates. 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 described in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one due to error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

In assessing the potential risks of material misstatement we obtained an understanding of; the entities operations, including the nature of its revenue sources and services and of its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement.

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 Report of the Auditors.

Report of the Independent Auditors to the Members of
Compassco Limited


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 a Report of the Auditors 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.




Nicola Pearson ACA (Senior Statutory Auditor)
for and on behalf of Cooper Parry Group Limited
New Derwent House
69-73 Theobalds Road
London
WC1X 8TA

26 September 2024

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Income Statement
for the year ended 31 December 2023

2023 2022
as restated
Notes £ £

Turnover 3 33,047,255 19,737,088

Cost of sales (11,298,638 ) (6,729,595 )
Gross profit 21,748,617 13,007,493

Administrative expenses (20,948,652 ) (13,377,776 )
Operating profit/(loss) 5 799,965 (370,283 )

Interest receivable and similar income 17,337 19
817,302 (370,264 )

Interest payable and similar expenses 6 (68,380 ) (57,405 )
Profit/(loss) before taxation 748,922 (427,669 )

Tax on profit/(loss) 7 (239,826 ) 83,738
Profit/(loss) for the financial year 509,096 (343,931 )

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Other Comprehensive Income
for the year ended 31 December 2023

2023 2022
as restated
Notes £ £

Profit/(loss) for the year 509,096 (343,931 )


Other comprehensive income - -
Total comprehensive income/(loss) for the year 509,096 (343,931 )

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Statement of Financial Position
31 December 2023

2023 2022
as restated
Notes £ £ £ £
Fixed assets
Intangible assets 10 1,214,696 1,289,457
Tangible assets 11 2,659,599 2,785,146
Investments 12 8,750 5,000
3,883,045 4,079,603

Current assets
Stocks 13 136,537 100,391
Debtors 14 315,137 225,150
Cash at bank and in hand 2,466,054 1,408,947
2,917,728 1,734,488
Creditors
Amounts falling due within one year 15 3,096,727 3,153,078
Net current liabilities (178,999 ) (1,418,590 )
Total assets less current liabilities 3,704,046 2,661,013

Creditors
Amounts falling due after more than one year 16 (1,969,387 ) (1,454,503 )

Provisions for liabilities 20 (463,106 ) (304,053 )
Net assets 1,271,553 902,457

Capital and reserves
Called up share capital 21 200 200
Retained earnings 22 1,271,353 902,257
Shareholders' funds 1,271,553 902,457

The financial statements were approved by the Board of Directors and authorised for issue on 26 September 2024 and were signed on its behalf by:





A M Butchers - Director


COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Statement of Changes in Equity
for the year ended 31 December 2023

Called up
share Retained Total
capital earnings equity
£ £ £
Balance at 1 January 2022 200 1,386,188 1,386,388

Changes in equity
Dividends - (140,000 ) (140,000 )
Total comprehensive loss - (343,931 ) (343,931 )
Balance at 31 December 2022 200 902,257 902,457

Changes in equity
Dividends - (140,000 ) (140,000 )
Total comprehensive income - 509,096 509,096
Balance at 31 December 2023 200 1,271,353 1,271,553

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Statement of Cash Flows
for the year ended 31 December 2023

2023 2022
as restated
Notes £ £
Cash flows from operating activities
Cash generated from operations 1 1,149,231 1,580,311
Interest paid (68,380 ) (57,405 )
Tax paid 51,016 (184,200 )
Net cash from operating activities 1,131,867 1,338,706

Cash flows from investing activities
Purchase of tangible fixed assets (532,227 ) (1,296,703 )
Purchase of fixed asset investments (3,750 ) -
Interest received 17,337 19
Net cash from investing activities (518,640 ) (1,296,684 )

Cash flows from financing activities
New loans in year 1,100,000 -
Loan repayments in year (463,575 ) (538,531 )
Amount introduced by directors 140,000 140,000
Amount withdrawn by directors (192,545 ) (139,900 )
Equity dividends paid (140,000 ) (140,000 )
Net cash from financing activities 443,880 (678,431 )

Increase/(decrease) in cash and cash equivalents 1,057,107 (636,409 )
Cash and cash equivalents at beginning of year 2 1,408,947 2,045,356

Cash and cash equivalents at end of year 2 2,466,054 1,408,947

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Statement of Cash Flows
for the year ended 31 December 2023

1. Reconciliation of profit/(loss) before taxation to cash generated from operations
2023 2022
as restated
£ £
Profit/(loss) before taxation 748,922 (427,669 )
Depreciation charges 732,535 630,670
Finance costs 68,380 57,405
Finance income (17,337 ) (19 )
1,532,500 260,387
Increase in stocks (36,146 ) (32,407 )
Increase in trade and other debtors (89,428 ) (11,339 )
(Decrease)/increase in trade and other creditors (257,695 ) 1,363,670
Cash generated from operations 1,149,231 1,580,311

2. Cash and cash equivalents

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2023
31/12/23 1/1/23
£ £
Cash and cash equivalents 2,466,054 1,408,947
Year ended 31 December 2022
31/12/22 1/1/22
as restated
£ £
Cash and cash equivalents 1,408,947 2,045,356


3. Analysis of changes in net debt

At 1/1/23 Cash flow At 31/12/23
£ £ £
Net cash
Cash at bank and in hand 1,408,947 1,057,107 2,466,054
1,408,947 1,057,107 2,466,054
Debt
Debts falling due within 1 year (454,954 ) (121,540 ) (576,494 )
Debts falling due after 1 year (1,454,503 ) (514,884 ) (1,969,387 )
(1,909,457 ) (636,424 ) (2,545,881 )
Total (500,510 ) 420,683 (79,827 )

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements
for the year ended 31 December 2023

1. Statutory information

Compassco Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. Accounting policies

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern
The company is in a net current liabilities position at the balance sheet date, however this is a reflection of the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting, and in doing so they have considered the period from the date of this report until 31 December 2025. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods at its restaurants in the ordinary course of the company's activities. Turnover is shown net of discount and Value Added Tax.

The company recognises revenue when the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the company and specific criteria have been met for each of the company's activities.

Franchise rights and fees
Franchise rights and fees are initially recognised at cost and are subsequently measured at cost less accumulated amortisation and impairment losses. They are amortised over their useful lives, which is taken as the twenty year term specified in the franchise agreements.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Short leasehold - 5% on cost
Restaurant equipment - at varying rates on cost
Motor vehicles - 20% on cost
Computer equipment - at varying rates on cost

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

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.


COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

2. Accounting policies - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Impairment of fixed assets
At each reporting 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 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 each 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, and only if, the reasons for the impairment loss have ceased to apply. 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.

Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted cost of the future holiday entitlement so accrued at the Balance Sheet date.

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

2. Accounting policies - continued

Financial instruments
The Company only enters into basic financial instruments that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

For financial assets measured at amortised cost, the impairment cost is measured at the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the assets effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Finance costs
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Dividends
Equity dividends are recognised when they legally become payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Judgements in applying accounting policies and key sources of estimation uncertainty
In the process of applying the company's accounting policies, management are required to make certain estimates and judgements. The key estimates and judgements are as follows:

Depreciation and residual values
The director has reviewed the asset lives and associated residual values of all fixed asset classes, and has concluded that asset lives and residual values are appropriate.

Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

3. Turnover

The turnover and profit (2022 - loss) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2023 2022
as restated
£ £
Food 32,607,487 19,387,832
Non product 439,768 349,256
33,047,255 19,737,088

The whole of turnover is derived from the United Kingdom.

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

4. Employees and directors
2023 2022
as restated
£ £
Wages and salaries 9,118,696 5,633,250
Social security costs 518,664 304,096
Other pension costs 177,264 111,582
9,814,624 6,048,928

The average number of employees during the year was as follows:
2023 2022
as restated

Production staff 739 510
Management staff 33 21
772 531

2023 2022
as restated
£ £
Director's remuneration 12,576 12,182
Director's pension contributions to money purchase schemes 22,200 14,400

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

5. Operating profit/(loss)

The operating profit (2022 - operating loss) is stated after charging:

2023 2022
as restated
£ £
Other operating leases 3,584,090 2,729,427
Depreciation - owned assets 657,774 555,909
Franchise rights amortisation 68,761 68,761
Franchise fees amortisation 6,000 6,000
Auditors' remuneration 7,500 6,500
Taxation compliance services 6,750 3,750

6. Interest payable and similar expenses
2023 2022
as restated
£ £
Bank loan interest 68,380 57,405

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

7. Taxation

Analysis of the tax charge/(credit)
The tax charge/(credit) on the profit for the year was as follows:
2023 2022
as restated
£ £
Current tax:
UK corporation tax 80,773 (50,997 )

Deferred tax 159,053 (32,741 )
Tax on profit/(loss) 239,826 (83,738 )

UK corporation tax has been charged at 25% (2022 - 19%).

Reconciliation of total tax charge/(credit) included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
as restated
£ £
Profit/(loss) before tax 748,922 (427,669 )
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 25%
(2022 - 19%)

187,231

(81,257

)

Effects of:
Expenses not deductible for tax purposes (15,452 ) 756
Capital allowances in excess of depreciation (85,925 ) -
Depreciation in excess of capital allowances - 29,504
Utilisation of tax losses (5,081 ) -
(Decrease)/Increase in deferred tax 159,053 (32,741 )
provision
Total tax charge/(credit) 239,826 (83,738 )

The UK's main corporation tax increased form 19% to 25%, effective from 1 April 2023.

Deferred tax has been calculated at 25% (2022 - 25%).

8. Dividends
2023 2022
as restated
£ £
Ordinary A shares of £1 each
Interim 80,000 60,000
Ordinary B shares of £1 each
Interim 60,000 80,000
140,000 140,000

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

9. Prior year adjustment

The 2022 accounts have been restated to incorporate an accrual for capital expenditure and the depreciation thereon. The restatement has resulted in in profits available for distribution as at 31 December 2022 reducing after tax by £28,902.


Summary of prior year restatement£   

Increase in restaurant equipment1,022,696
Increase in accruals(1,067,161)
Decrease in deferred tax provision15,563
(28,902)

10. Intangible fixed assets
Franchise Franchise
rights fees Totals
£ £ £
Cost
At 1 January 2023
and 31 December 2023 1,375,216 120,000 1,495,216
Amortisation
At 1 January 2023 170,259 35,500 205,759
Amortisation for year 68,761 6,000 74,761
At 31 December 2023 239,020 41,500 280,520
Net book value
At 31 December 2023 1,136,196 78,500 1,214,696
At 31 December 2022 1,204,957 84,500 1,289,457

11. Tangible fixed assets
Short Restaurant Motor Computer
leasehold equipment vehicles equipment Totals
£ £ £ £ £
Cost
At 1 January 2023 37,388 5,431,659 25,245 48,313 5,542,605
Additions 1,543 412,101 114,449 4,134 532,227
Disposals - - - (193 ) (193 )
At 31 December 2023 38,931 5,843,760 139,694 52,254 6,074,639
Depreciation
At 1 January 2023 6,719 2,696,799 16,359 37,582 2,757,459
Charge for year 3,296 645,005 6,639 2,834 657,774
Eliminated on disposal - - - (193 ) (193 )
At 31 December 2023 10,015 3,341,804 22,998 40,223 3,415,040
Net book value
At 31 December 2023 28,916 2,501,956 116,696 12,031 2,659,599
At 31 December 2022 30,669 2,734,860 8,886 10,731 2,785,146

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

12. Fixed asset investments
Unlisted
investments
£
Cost
At 1 January 2023 5,000
Additions 3,750
At 31 December 2023 8,750
Net book value
At 31 December 2023 8,750
At 31 December 2022 5,000

Fixed asset investments consists of 8,750 (2022 - 5,000) ordinary shares of £1 each in Fries Holding Company Limited, a company registered in Guernsey. The investments are included in the accounts at cost.

13. Stocks
2023 2022
as restated
£ £
Food 98,398 76,611
Paper 28,730 19,286
Non product 9,409 4,494
136,537 100,391

14. Debtors: amounts falling due within one year
2023 2022
as restated
£ £
Trade debtors 1,208 -
Other debtors 129,026 119,721
Directors' current accounts 51,575 -
Corporation tax - 51,016
Prepayments 133,328 54,413
315,137 225,150

15. Creditors: amounts falling due within one year
2023 2022
as restated
£ £
Bank loans and overdrafts (see note 17) 576,494 454,954
Trade creditors 895,010 467,168
Corporation tax 80,773 -
Social security and other taxes 151,849 70,897
VAT 586,141 598,935
Other creditors 581,604 156,302
Directors' current accounts - 969
Accrued expenses 224,856 1,403,853
3,096,727 3,153,078

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

16. Creditors: amounts falling due after more than one year
2023 2022
as restated
£ £
Bank loans (see note 17) 1,969,387 1,454,503

17. Loans

An analysis of the maturity of loans is given below:

2023 2022
as restated
£ £
Amounts falling due within one year or on demand:
Bank loans 576,494 454,954

Amounts falling due between one and two years:
Bank loans - 1-2 years 535,561 454,954

Amounts falling due between two and five years:
Bank loans - 2-5 years 1,433,826 999,549

The loans are due for repayment in equal monthly instalments with terms as stated above. They are unsecured with interest charged at rates between 1.2% and 1.7% above the Bank of England base rate.

18. Leasing agreements

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
as restated
£ £
Within one year 1,061,124 897,636
Between one and five years 3,609,804 3,590,544
In more than five years 7,170,540 8,068,176
11,841,468 12,556,356

Lease payments recognised as an expense in the year totalled £3,584,090 (2022 - £2,729,427).

The Company's restaurant premises are leased from McDonalds Restaurants Limited under non-cancellable operating leases with expiry terms of more than five years. Rent is calculated as a percentage of sales above base, the above operating lease commitment only relates to base rent. Each restaurant pays its own unique base rent based on its circumstances, with the remainder of the rent being based on the performance of the restaurant.

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

19. Financial instruments

Financial Assets 2023 2022
as restated
£    £   
Financial assets as an equity instrument 8,750 5,000
Financial assets that are debt instruments measured at amortised cost 2,647,863 1,579,684
2,656,613 1,584,684


Financial Liabilities 4,247,351 3,937,749
4,247,351 3,937,749

20. Provisions for liabilities
2023 2022
as restated
£ £
Deferred tax 463,106 304,053

Deferred tax
£
Balance at 1 January 2023 304,053
Provided during year 159,053
Balance at 31 December 2023 463,106

21. Called up share capital

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: as restated
£ £
100 Ordinary A £1 100 100
100 Ordinary B £1 100 100
200 200

22. Reserves
Retained
earnings
£

At 1 January 2023 902,257
Profit for the year 509,096
Dividends (140,000 )
At 31 December 2023 1,271,353

23. Related party disclosures

During the year, total dividends of £140,000 (2022 - £110,000) were paid to the director .

COMPASSCO LIMITED (REGISTERED NUMBER: 08257609)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

23. Related party disclosures - continued

As at the balance sheet date, the balance owed from the director A M Butchers to the company amounts to £51,575 (2022 - £969).

This balance bears no fixed rate of interest and is repaid within 9 months of the balance sheet.

24. Ultimate controlling party

The ultimate controlling party is A M Butchers.