The directors present the strategic report for the year ended 30 April 2024.
The principal activity of the Company is a holding company.
The principal activity of the Neville Johnson Offices Group is the marketing, design, manufacture and installation of quality luxury bespoke products for the home including furniture and staircases.
Neville Johnson Offices Limited (the "Company") is part of the wider BHID Group Limited Group (the "Group").
Overall the Group had a positive FY24, in spite of the very challenging macro environment.
From a supply-side perspective, some of the headwinds that were particularly challenging in the prior year (namely labour availability & inflation pressures, significant raw materials & energy inflation, and general inflation) abated and we started to see some commodity-linked deflation. We were also pleased to see the availability of high-quality labour improving during the year.
Our colleagues throughout our showrooms, factories and offices are critical in delivering on our customer promises for exceptional quality and service, and the continued success of the Group. To support our colleagues during the periods of significant consumer and household inflation the Group was pleased to award an annual pay award in April 2023, that for the second year running, was over double the levels previously awarded pre-2020 (the Covid period). Whilst the Directors were pleased to make this annual pay award, they are mindful that our clients are also experiencing challenging times, and with consumer confidence being challenged, future pay awards need to balance these challenges, and they are likely to return to more normalized levels seen pre-2020.
From a demand-side perspective, the headwinds faced in the prior year persisted and in various areas deteriorated in the year. Some of these challenging macro factors that adversely affect consumer confidence and demand included:
Persistent cost of living challenges (albeit CPI inflation did slow from 7.9% in May ’23 to 2.3% in April ’24);
Bank of England interest rates remained at a 16 year high of 5.25% and the anticipated rate cuts in late 2023 were pushed out, causing mortgage rates to rise again in Q1 2024;
Residential property transaction volumes reduced by 20% in 2023 (-20% vs 2019/Pre-Covid);
Continued instability & low confidence in the UK Government;
Continuation of the Russian led war in Ukraine; and
Hamas & Israel war commencing in October 2023, heightening the geopolitical uncertainties.
Due to the nature of the business, there are no material risks or uncertainties which require disclosure.
Due to the nature of the business, there are no relevant key performance indicators which require disclosure.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2024.
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
On 10 May 2024, BHID Group Limited, the ultimate parent company of Neville Johnson Offices Limited, was acquired by Hartford Bidco Limited. The directors consider that from 10 May 2024 the ultimate parent undertaking of the company is Hartford Topco Limited, a company registered in England and Wales.
Saffery LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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.
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.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
Neville Johnson Offices Limited is a private company limited by shares incorporated in England and Wales. The registered office is Broadoak Business Park, Ashburton Road West, Trafford Park, Manchester, M17 1RW.
The principal activity of the company is that of a holding company.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of BHID Group Limited.
These consolidated financial statements are available from its registered office, Broadoak Business Park, Ashburton Road West, Trafford Park, Manchester, M17 1RW.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
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.
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.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
Investments, debtors and creditors
Investments held as fixed assets are shown at cost less provision for impairment.
Short term debtors are measured at transaction price, less any impairment.
Short term creditors are measured at the transaction price. Other financial liabilities, including loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Distributions to equity holders
Dividends and other distributions to the Group's shareholders are recognised as a liability in the financial statements in the period in which the dividends and other distributions are approved by the shareholders. These amounts are recognised in the Statement of Changes in Equity.
Management consider there to be no key judgements in the application of accounting policies or key sources of estimation uncertainty.
The company has no employees other than the directors.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 30 April 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Amounts owed by group undertakings are interest free and repayable on demand.
Amounts owed to group undertakings are interest free and payable on demand.
Represents the difference between issue price and nominal value of ordinary shares currently in issue.
The company is subject to a joint bank guarantee with its parent undertaking, the BHID Group and its subsidiaries. The contingent liability at 30 April 2024 was £7,250,000 (2023: £8,000,000).
As at 30 April 2024 the directors consider that the ultimate parent undertaking of the Company is BHID Group Limited which is registered in England and Wales. The Third Alcuin Fund Limited Partnership (a fund controlled by Alcuin Capital Partners LLP) hold a 49% shareholding in BHID Group Limited. The immediate parent undertaking is Neville Johnson Group Limited which is registered in England and Wales.
On 10 May 2024, BHID Group Limited, the ultimate parent company of Neville Johnson Offices Limited, was acquired by Hartford Bidco Limited. The directors consider that from 10 May 2024 the ultimate parent undertaking of the company is Hartford Topco Limited, a company registered in England and Wales. The Third Alcuin Fund Limited Partnership continue to be deemed to be the ultimate controlling party.