Company registration number 03056677 (England and Wales)
GRAEME ELLISDON LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
GRAEME ELLISDON LIMITED
COMPANY INFORMATION
Directors
G J Ellisdon
A R T Ellisdon
Secretary
G J Ellisdon
Company number
03056677
Registered office
10 Prospect Place
Welwyn
Herts
AL6 9EW
Auditor
Mercer & Hole LLP
72 London Road
St Albans
Hertfordshire
AL1 1NS
GRAEME ELLISDON LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
GRAEME ELLISDON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The directors are pleased to report an operating profit for the year of £1,009k from a Turnover of £15.3m.
Turnover did not increase from the previous year, which was a disappointment but was the result of various factors outside the control of the company. Whilst Turnover didn’t’ increase the directors are pleased to report an increase in Operating profit of over 23% to £1,009k. Turnover was affected by customers still unsure about the economic situation following Covid and the war in Ukraine leading to inflationary pressures. A significant factor in the Turnover not increasing was the logistics delays in stock arriving from overseas. Stock arrived late and often out of season resulting in discounting to get the stock sold. However, the directors worked hard to increase margin as a result of better buying and overall the directors are pleased with the results for the year.
Principal risks and uncertainties
The principal risks and uncertainties facing the company are summarised below and these are formally reviewed each monthly Board meeting. Updates in terms of emerging risks or significant actions undertaken are addressed as and when required at Board meetings. The principal risks are determined through an evaluation of likelihood of occurrence and potential impact. Management also review specific strategic, operational, financial and compliance risks throughout the year.
Competitive pressures
The economic environment during 2023 was still affected by the war in Ukraine, and the company was exposed, as many other retailers and business sectors. The company’s offering is a discretionary purchase opportunity, so when economic confidence is uncertain, there is pressure to maintain sales.. The company has been able to maintain turnover and remain competitive by offering good quality products at good value for money.
We pride ourselves on the quality of the products and service we offer and on the evolving product range which has diversified into non-leather goods and further accessory ranges, e.g. sunglasses.
Recruitment, development or retention of talented people
We constantly measure the retention of talent within our company, this is of paramount importance to us. We actively seek to engage employees by focusing on training and development, customer service and relationships, leadership, social responsibility and communications.
Significant failure or inefficiencies in our systems and infrastructure
Ongoing review of our IT infrastructure and cyber security procedures include regular tests of our systems. We continually improve workflows and operational efficiencies and provide increased capacity and investment in capability. Continued investment is being made in the company's IT infrastructure and website, with extra consideration to improve the company's web offering to help mitigate current economic challenges of store closures. The company integrated a new ERP system encompassing stock, logistics, sales, procurement and accounting in March 2023 which will enable the company to be more effective and flexible in improving the running of the business.
Long term evolution of our brand and products
We continue to plan for the future, exploring new avenues of development for our products, particularly non-leather, differing markets for purchases and improving for the benefit of our customers. We pride ourselves on the quality of the Osprey London brand, and are constantly seeking to improve on the high-quality products and customer service.
GRAEME ELLISDON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
The directors consider turnover, gross margin and administrative costs as a proportion of sales to be the most reliable and important indicators for measuring the company’s performance and all are reviewed on a monthly basis at Board meetings. The directors consider the achieved revenue of £15.3m to be a satisfactory result considering the economic uncertainty experienced in 2023, and the significant improvement in the Gross Profit Margin to 58.74% from to 57.78% leading to an increase in Gross Profit of over £140,000 despite Turnover remaining fairly constant.
The Board monitor KPI’s regularly, from week to week and reacts as required. Sales from all channels are monitored daily along with cash flows.
Future developments
Store closures have occurred in 2023, but only loss-making stores have been closed, including the London store, so an overall benefit to the company. New leases have been signed on our sites at Gunwharf Quays, Portsmouth, York, Braintree, Chesire Oaks, Clarks Village at Street, Bridgend, and Ashford. The directors are always looking for new store locations but only if the returns from such are favourable.
The current trading position is challenging with the continuation of the war in Ukraine and the current cost of living crisis. That said, the directors are still looking to increase revenues by increasing the product offering, improvements have been made in the online experience and website increasing the number of products available, and the company continues to look for licensing opportunities for the OSPREY London brand.
The company’s, products are now fully integrated into the Next website and negotiations are ongoing with other significant retailers to incorporate product onto their online offerings allowing the company to expand without having to make significant investments into traditional stores. 2024 has seen new Market Place opportunities with new customers such as QVC, and increased sales to TK Maxx.
The directors are very optimistic about the future of the business.
G J Ellisdon
Director
27 September 2024
GRAEME ELLISDON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be the retail of luxury leather and lifestyle goods.
Results and dividends
The results for the year are set out on page 8 and cover a 12 month period to 31 December 2023.
Ordinary dividends were paid amounting to £1,272,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G J Ellisdon
A R T Ellisdon
Research and development
The company undertakes research and development upgrading and improving their website in order to improve their online offering to customers.
Auditor
The auditor, Mercer & Hole LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
G J Ellisdon
Director
27 September 2024
GRAEME ELLISDON LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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.
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.
GRAEME ELLISDON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF GRAEME ELLISDON LIMITED
- 5 -
Opinion
We have audited the financial statements of Graeme Ellisdon Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, 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 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 year 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.
GRAEME ELLISDON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF GRAEME ELLISDON LIMITED (CONTINUED)
- 6 -
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 and the directors' report.
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches under General Data Protection Regulations and we considered the extent to which non-compliance may have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act and tax legislation.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principle risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure, and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
discussions with management, including considerations of known or suspected instances of non-compliance with laws and regulations and fraud;
evaluation of the operating effectiveness of management's controls designed to prevent and detect irregularities;
challenging assumptions and judgements made by management in its significant accounting estimates;
identifying and testing journal entries.
GRAEME ELLISDON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF GRAEME ELLISDON LIMITED (CONTINUED)
- 7 -
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 auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Paul Maberly FCA
Senior Statutory Auditor
For and on behalf of Mercer & Hole LLP
1 October 2024
Chartered Accountants
Statutory Auditor
72 London Road
St Albans
Hertfordshire
AL1 1NS
GRAEME ELLISDON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
15,303,778
15,308,022
Cost of sales
(6,314,612)
(6,462,414)
Gross profit
8,989,166
8,845,608
Administrative expenses
(8,030,870)
(8,032,510)
Other operating income
50,507
5,746
Operating profit
4
1,008,803
818,844
Interest receivable and similar income
7
5,345
1,655
Interest payable and similar expenses
8
(167,690)
(76,362)
Profit before taxation
846,458
744,137
Tax on profit
9
(194,179)
(190,473)
Profit for the financial year
652,279
553,664
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GRAEME ELLISDON LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
864,562
949,377
Current assets
Stocks
12
2,324,408
3,016,410
Debtors
13
13,093,955
13,039,689
Cash at bank and in hand
1,150,794
1,699,389
16,569,157
17,755,488
Creditors: amounts falling due within one year
14
(6,316,492)
(7,695,376)
Net current assets
10,252,665
10,060,112
Total assets less current liabilities
11,117,227
11,009,489
Creditors: amounts falling due after more than one year
15
(1,976,381)
(1,248,922)
Provisions for liabilities
Provisions
18
300,000
300,000
(300,000)
(300,000)
Net assets
8,840,846
9,460,567
Capital and reserves
Called up share capital
22
20,002
20,002
Profit and loss reserves
23
8,820,844
9,440,565
Total equity
8,840,846
9,460,567
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 27 September 2024 and are signed on its behalf by:
G J Ellisdon
A R T Ellisdon
Director
Director
Company registration number 03056677 (England and Wales)
GRAEME ELLISDON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
20,002
10,026,901
10,046,903
Year ended 31 December 2022:
Profit and total comprehensive income
-
553,664
553,664
Dividends
10
-
(1,140,000)
(1,140,000)
Balance at 31 December 2022
20,002
9,440,565
9,460,567
Year ended 31 December 2023:
Profit and total comprehensive income
-
652,279
652,279
Dividends
10
-
(1,272,000)
(1,272,000)
Balance at 31 December 2023
20,002
8,820,844
8,840,846
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Graeme Ellisdon Limited is a private company limited by shares incorporated in England and Wales. The registered office is 10 Prospect Place, Welwyn, Herts, AL6 9EW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Ellisdon Holdings Ltd. These consolidated financial statements are available from its registered office: Riverside House, 14 Prospect Place, Welwyn, Hertfordshire AL6 9EN.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In making this assessment, the directors have considered trading levels since the year end as well as forecasts prepared for 202true4 and 2025. Cash flow forecasts indicate sufficient headroom through to December 2025. Based on these forecasts, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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 or points of sale in stores), 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.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
10 years straight line
Fixtures and fittings
20% straight line
Computers
20% straight line
Motor vehicles
20% straight line
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.
The directors are of the opinion that residual value of freehold property is the same as the fair value, which is the carrying value and therefore no depreciation has been provided for.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, 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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Freehold property valuation
Freehold properties are held at their fair value. Management engages suitably qualified experts to provide them with an estimate of the fair value of each property which is based on a number of factors including the experts knowledge of the local property markets. Management review the basis of the estimations on a frequent basis and if there are indications that there have been significant changes to the underlying assumptions previous applied, updated valuations are obtained.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock provision
Provision is made for slow-moving, damaged and obsolete stock items, In assessing the level of provision required management review stock items on a line by line basis to assess age, movement and obsolescence. Management then use their knowledge and experience to assess and estimate the level of provision required in order to write down particular line items to the lower of cost and net realisable value.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Luxury leather and lifestyle goods
15,254,761
15,289,912
Licensing
49,017
18,110
15,303,778
15,308,022
2023
2022
£
£
Other revenue
Interest income
5,345
1,655
Royalty income
49,017
1,085
Turnover has arisen wholly from sales in the United Kingdom.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(3,093)
7,360
Research and development costs
44,163
26,396
Fees payable to the company's auditor for the audit of the group's financial statements
40,000
37,200
Depreciation of owned tangible fixed assets
151,164
149,905
Depreciation of tangible fixed assets held under finance leases
45,321
37,253
(Profit)/loss on disposal of tangible fixed assets
(21,488)
305,645
Operating lease charges
1,338,990
1,678,928
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
44
50
Retail
93
91
Total
137
141
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,458,619
2,319,319
Social security costs
199,373
183,578
Pension costs
54,012
54,424
2,712,004
2,557,321
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
175,017
24,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
5,345
1,655
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
134,889
58,814
Other interest on financial liabilities
10,461
Interest on finance leases and hire purchase contracts
30,298
7,087
Other interest
2,503
167,690
76,362
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
162,030
173,845
Deferred tax
Origination and reversal of timing differences
32,149
16,628
Total tax charge
194,179
190,473
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 19 -
An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was substantively enacted on 10 June 2021. The increase in the rate will apply to companies with profits over £250k. Also announced in the Budget on 3 March 2021 was the introduction of small profits rate of 19% to apply to profits under £50k with a tapered rate to apply on profits above this threshold but under £250k. Deferred tax has been provided at 25% as that is the rate that was substantially enacted at the balance sheet date.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
846,458
744,137
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
211,615
141,386
Effect of change in corporation tax rate
(12,528)
Group relief
(23,622)
Permanent capital allowances in excess of depreciation
(32,149)
16,628
Depreciation on assets not qualifying for tax allowances
50,863
32,459
Taxation charge for the year
194,179
190,473
10
Dividends
2023
2022
£
£
Interim paid
1,272,000
1,140,000
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
1,800,881
194,671
256,955
225,043
2,477,550
Additions
6,998
117,551
124,549
Disposals
(77,276)
(77,276)
At 31 December 2023
1,800,881
194,671
263,953
265,318
2,524,823
Depreciation and impairment
At 1 January 2023
1,086,063
78,648
256,006
107,456
1,528,173
Depreciation charged in the year
123,495
28,385
1,764
42,841
196,485
Eliminated in respect of disposals
(64,397)
(64,397)
At 31 December 2023
1,209,558
107,033
257,770
85,900
1,660,261
Carrying amount
At 31 December 2023
591,323
87,638
6,183
179,418
864,562
At 31 December 2022
714,818
116,023
949
117,587
949,377
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Fixtures and fittings
1,600
3,199
Motor vehicles
176,717
114,167
178,317
117,366
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,324,408
3,016,410
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
747,152
788,906
Amounts owed by group undertakings
11,682,460
11,673,292
Other debtors
19,471
179,347
Prepayments and accrued income
465,090
186,213
12,914,173
12,827,758
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 19)
179,782
211,931
Total debtors
13,093,955
13,039,689
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
1,248,208
161,297
Obligations under finance leases
17
36,453
48,672
Trade creditors
1,366,284
2,980,333
Corporation tax
147,779
540,887
Other taxation and social security
2,502,374
2,895,953
Deferred income
20
48,946
49,185
Other creditors
476,749
322,028
Accruals and deferred income
489,699
697,021
6,316,492
7,695,376
Bank loans are secured by way of a fixed and floating charge over the assets of the company. Finance leases are secured over the asset to which the lease relates.
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
1,731,526
1,023,758
Obligations under finance leases
17
144,855
79,979
Deferred income
20
100,000
145,185
1,976,381
1,248,922
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Creditors: amounts falling due after more than one year
(Continued)
- 22 -
Bank loans are secured by way of a fixed and floating charge over the assets of the company. Finance leases are secured over the asset to which the lease relates.
Amounts included above which fall due after five years are as follows:
Payable by instalments
1,150,637
652,104
16
Loans and overdrafts
2023
2022
£
£
Bank loans
2,979,734
1,185,055
Payable within one year
1,248,208
161,297
Payable after one year
1,731,526
1,023,758
The long-term loans are secured by fixed and floating charges over the assets of the company.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
36,453
48,672
In two to five years
144,855
79,979
181,308
128,651
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Provisions for liabilities
2023
2022
£
£
Dilapidations
300,000
300,000
Movements on provisions:
Dilapidations
£
At 1 January 2023 and 31 December 2023
300,000
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2022
Balances:
£
£
Decelerated capital allowances
179,782
211,931
2023
Movements in the year:
£
Asset at 1 January 2023
(211,931)
Charge to profit or loss
32,149
Asset at 31 December 2023
(179,782)
The deferred tax asset set out above is not expected to reverse within 12 month and relates to decelerated capital allowances.
20
Deferred income
2023
2022
£
£
Other deferred income
148,946
194,370
Included in the financial statements as follows:
Current liabilities
48,946
49,185
Non-current liabilities
100,000
145,185
148,946
194,370
Deferred income relates to contributions the company receives from landlords towards fit-out costs of new stores. These have been accounted for as lease incentives and are spread over the term of the lease.
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
54,012
54,424
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
GRAEME ELLISDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
20,002
20,002
20,002
20,002
23
Reserves
Profit and loss reserves
Profit and loss reserves includes all current and prior period retained profits and losses after taxation and dividends. It is distributable.
24
Financial commitments, guarantees and contingent liabilities
The company has provided a limited guarantee of £5m in favour of its parent company, Ellisdon Holdings Limited, in respect of bank borrowings. Ellisdon Holdings Limited in return, has provided an unlimited guarantee in favour of the company in respect of bank borrowings.
25
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
1,012,257
958,599
Between two and five years
1,587,544
2,209,761
2,599,801
3,168,360
26
Related party transactions
The company has taken advantage of the exemptions available in FRS102 paragraph 33.1A not to disclose transactions with wholly owned members of the group.
27
Ultimate controlling party
The company is a wholly owned subsidiary of Ellisdon Holdings Ltd, a company incorporated in the United Kingdom and registered in England and Wales.
The smallest and largest group within which the company's financial statements are consolidated into are those of Ellisdon Holdings Ltd. A copy of the consolidated financial statements can be obtained from Companies House.
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