The directors present the strategic report for the year ended 30 April 2024.
The Group is a leading UK luxury home interior specialist, trading under three distinct brands: Tom Howley, Neville Johnson and London Door Company. The business designs, manufactures, retails and installs its products nationwide. The business engages with clients directly online, with a focused digital marketing approach, and it collaborates with its clients through its nationwide estate of showrooms and also through home sales visits.
Overall the Group had a positive FY24, in spite of the very challenging macro environment and the Directors are pleased to report Group Sales growth of 2% to £85.6m (2023: £83.9m) and Group Operating Profit growth of 63% to £4.4m (2023: £2.7m).
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.
Despite these factors the Group continued to experience strong demand for its products and services, with a further 2% increase in Order Intake over the prior year. This is reflected in the outstanding order book increasing to £79.0m (2023: £77.5m) at the year end. The Group continues to focus on a digital marketing strategy, generating high-quality, cost-effective client leads.
The Group’s cash balance has increased by £1.2m during the year to £5.6m (2023: £4.4m). Cash generation has benefited from the improved profit margins in the year, alongside the lower scheduled repayments on the Group’s debt facility. These benefits have been partially offset by the Group’s continued investment in its fixed assets infrastructure.
Group interest payable and similar charges have increased by £0.1m during the year to £0.8m (2023: £0.7m) as a result of the higher Bank of England base rate in FY24 (5.25% from August 2023).
The Group’s strategy is to continue to strengthen its position as the leading supplier of high quality, fitted home furniture products for high-end consumers in the UK. The Group will continue to leverage its Brands strength, digital marketing expertise and scale as it grows.
The Group has a history of successfully making complementary and value enhancing acquisitions that fit with our Group strategy and the Group will continue to evaluate potential acquisition opportunities in existing and adjacent product categories in the UK, whilst also exploring international expansion opportunities.
The Group prides itself on being Customer centric and we have adapted our business as our Customers’ needs and preferences of engagement have evolved. In recent years, the Group has increasingly become more digitally focused, with the vast majority of our customers leads, and thus sales orders, now being generated digitally.
This shift in customer engagement to digital will benefit from both the increased focus by clients on the home and increased digital capability and activity of BHID Group’s targets demographics. This will also be supported by the Group's investment into strategically located showrooms.
The Groups brands: Tom Howley, Neville Johnson and London Door Company are all benefitting from this strategy and it positions the Group as the ‘go to’ brands for ‘high-end’ clients looking to furnish their home with luxury bespoke products.
Principal risks and uncertainties
Price risk
The Group is exposed to price risk as a result of its operations which are competitive in nature. However, the Directors consider that they are close enough to the market to be able to react quickly to price changes and hence manage the impact on the Group's performance.
Cost and inflation risk
The Group is exposed to cost and inflationary risk in relation to the sourcing of goods and services. Where possible and following commercial consideration, the Group may choose to mitigate some of these risks via fixed price contracts. The Directors actively monitor cost inflation risk and this is a consideration when setting sales prices.
Interest rate risk
The Group finances its operations through a mixture of retained profits and borrowings. The Group exposure to interest rate fluctuations on its borrowings can be managed by the use of both fixed and floating facilities.
Liquidity risk
The Group seeks to manage liquidity risk by ensuring it has sufficient liquidity to meet its obligations falling due. This includes running various stress tested forecast scenarios to ensure that under certain stressed scenarios, the Group remains solvent and capable of discharging its liabilities falling due. The Group takes a sensible view when investing its cash resources and through the prudent management of working capital.
General economic risk
The Group, like other businesses, recognises that the current economic uncertainty presents challenges. The Group continually reviews its forecasts including the potential impact on sales of customer confidence and the general economic climate.
Fixed cost base risk
The Group has a strategy to minimise the risk of carrying fixed costs through committing as much as possible of its expenditure on overheads on a variable basis.
The Group has a number of key performance indicators used by management in the effective running of the business.
These include:
Monthly measures on generation of leads, orders, turnover and forward order book
Marketing data and efficiency / conversion ratios
Operational margins and efficiencies
Strict cost and overhead controls
Working capital and cash control measures and reporting
Section 172 statement
In accordance with section 172 of the Companies Act 2006, the Directors collectively and individually, confirm that during the year ended 30 April 2024, they acted in good faith and have upheld their ‘duty to promote the success of the Group’ to the benefit of its stakeholder groups. Section 172 describes a diverse range of stakeholders whose interests are said to feature in the ‘success of the Group’: comments on each of these are provided below.
Sustainability and Environmental
BHID Group has a responsibility to all of its stakeholders to develop a sustainable business. The Group as a whole works hard to maximise the positive consequences throughout the organisation and its business relationships.
The Group’s policy with regard to the environment is to ensure that we understand and effectively manage the actual and potential environmental impact on our activities. Our operations are conducted such that we comply with all legal requirements relating to the environment in all areas where we carry out our business. During the year covered by this report the Group has not incurred any fines or penalties, and nor has it been investigated for any potential breaches of environmental regulations.
The Group strives to provide products that meet clients’ needs and environmental aspirations. Manufacturing and distribution are mainly in the UK; therefore, all the Group’s activities are in line with the UK Government’s employment laws, human rights and labour conditions.
It is the Group’s policy to continually carry out research and develop for new products and processes to minimise the impact of its operations on the environment.
In addition, the Group also carries out reviews for increased energy efficiency, reduced volumes of waste and increased levels of recycling across all areas of operations.
Our People
The quality and commitment of our people has played a major role in our business success. This has been demonstrated in many ways, including improvements in customer satisfaction, the development of our products and the flexibility they have shown in adapting to changing business requirements.
We seek to employ staff who will take the opportunity presented to make a positive contribution to the development of the business, and it is the approach of the Group to be as open as possible with staff and obtain their feedback.
Employee turnover remains low and we have many long service staff members.
Culture, values and standards
This underpins how the Group creates and sustains value over the longer term. The Group Board is fully committed to upholding these values.
We respect and value our people and encourage them to support each other through teamwork to meet the needs of our clients.
We put customers at the heart of our business. By understanding their needs, we aim to exceed their expectations with quality products and excellent service.
Through continuous improvement and embracing change we never stand still. We are always looking for ways to improve our knowledge, skills and processes to stay ahead and evolve the business.
Stakeholders
The Group Board is fully committed to developing and maintaining key stakeholder relationships that include our customers, suppliers, employees and shareholders. The Group always tries to ensure that it has visibility of these relationships at all times so that it is able to take stakeholder considerations into account when it makes key decisions. The Group Board are committed to fully communicating the Group’s strategy, objectives, governance and performance with its shareholders.
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 13.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Group did not make any political donations or incur any political expenditure during the year (2023: £nil).
The Group supports a number of national and local charities as well as encouraging employees to support various fund raising events. Charitable donations in the year were £2,359 (2023: £2,056).
Research and development is mainly focused on new product development across the Group, in addition to on- going works to develop new operational processes that improve the manufacturing efficiency of the Group.
We seek to employ staff who will take the opportunity presented to make a positive contribution to the development of the business. The Group also looks to be as open as possible with staff and obtain their feedback. The Group has established an Employee Consultative Committee comprising of representatives across each area of the Group workforce, including the Board of Directors. The Employee Consultative Committee meets periodically, typically once per quarter, and is attended by at least one Group Director.
On 10 May 2024 the entire share capital of BHID Group Limited was acquired by Hartford Bidco Limited. As a result of the transaction, the ultimate parent company of BHID Group Limited is now Hartford Topco Limited.
Immediately prior to this transaction, owing to its shareholding and rights within the articles of association, The Third Alcuin Fund Limited Partnership (a fund controlled by Alcuin Capital Partners LLP) were deemed to be the ultimate controlling party. Immediately post this transaction, The Third Alcuin Fund Limited Partnership continue to be deemed to be the ultimate controlling party.
The Group will continue to operate in its principal activities for the foreseeable future. Further details on the Group Strategy can be found within the Strategic Report.
Saffery LLP were appointed as auditor to the group 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.
Whilst the Group does not fall within the thresholds requiring formal application of a corporate governance code, the Group has voluntarily elected to establish an Audit Committee and a Remuneration Committee. The Audit Committee reviews the Group’s accounting policies, agrees the annual audit plan, and reviews the annual audit findings as part of the statutory accounts approval process. The Remuneration Committee reviews all executive salaries and approves any inflationary pay award for Group employees.
The SECR disclosure covers the Group’s energy consumption, greenhouse gas (GHG) emission and an appropriate intensity ratio.
The Group has been proactive in the period, implementing projects to support its aim to reduce carbon emissions and the intensity ratio. The Group has completed a number of lighting upgrades across its property estate with the installation of presence operating lights to ensure lighting is only switched on when required. A survey was completed in the year on the compressed air systems and remedial action taken where necessary to ensure it is operating efficiently. The Group also continues to monitor its vehicle fleet and emission levels are considered when deciding on which vehicles are made available.
The Group is committed to ensuring that there is no modern slavery or human trafficking in our supply chains or in any part of our business. Our anti slavery policy reflects our commitment to acting ethically and with integrity in all our business relationships and to implementing effective systems and controls to ensure slavery and human trafficking is not taking place in our supply chains. We have in place policy and systems to facilitate the reporting of concerns and the protection of whistle blowers.
The Company maintains Director and Officers’ liability insurance on behalf of the Company which is a qualifying third-party indemnity provision. This has been in place for the financial year to 30 April 2024 and remains in force at the date of this report.
Going concern
The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, being a period of not less than 12 months from the date of approval of these financial statements.
In their consideration of going concern under current ownership, the Directors have reviewed the Group’s future cash flow forecasts and profit projections for the period to 30 April 2025, on both a base case and certain sensitised basis, considering the principal risks and uncertainties of the Group.
These forecasts have been prepared based on past experience, the outstanding order book, marketing data and KPI’s, market data and expected trading, and they reflect any potential impact of wider market headwinds on trading activity and liquidity. The Directors have reviewed these forecasts and have also considered sensitivities in respect of potential downside scenarios and the mitigating actions available to the Group.
Under all scenarios, there was sufficient headroom on covenants and cash headroom. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
We have audited the financial statements of BHID Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent 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 included in the annual report other than the financial statements and our auditor's report 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.
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 the 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.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
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 parent 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 parent 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 group and parent 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 group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent 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 group and parent company financial statement disclosures. We reviewed the parent 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 parent 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.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
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 parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £37k (2023: £35k loss).
BHID Group Limited (“the company”) 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 group consists of BHID Group Limited and all of its subsidiaries.
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 £000.
The financial statements have been prepared under the historical cost convention modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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; and
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company BHID Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, being a period of not less than 12 months from the date of approval of these financial statements.
In their consideration of going concern under current ownership, the Directors have reviewed the Group's future cash flow forecasts and profit projections for the period to 30 April 2025, on both a base case and certain sensitised basis, considering the principal risks and uncertainties of the Group.
These forecasts have been prepared based on past experience, the outstanding order book, marketing data and KPIs, market data and expected trading, and they reflect any potential impact of wider market headwinds on trading activity and liquidity. The Directors have reviewed these forecasts and have also considered sensitivities in respect of potential downside scenarios and the mitigating actions available to the Group.
Under all scenarios, there was sufficient headroom on covenants and cash headroom. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised when the Group has satisfied its performance obligations to the customer, principally being on the practical completion under delivery and installation of goods manufactured by the Group at a customer's home. These installations typically do not take a significant period of time and no revenue is recognised until practical completion. All costs relating to provision of any third party goods or services are provided for.
The Group produces bespoke luxury designed products and therefore on installation it transfers the significant risks and rewards. Given the bespoke design & manufacturing nature of our products, a customer does not have a right to return a product, except under very limited conditions covered under our terms of sales. In practice this does not occur and as such, a refund liability is not required.
Turnover is measured at the transaction price received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and value added tax.
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 recognised in the income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors, 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, 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, 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
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 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 group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 statement of financial position 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 leased asset are consumed.
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.
Finance and borrowing costs
Finance costs are charged to profit or loss 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.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Dividends
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.
Interest income
Interest income is recognised in profit or loss using the effective interest method.
In the application of the group’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.
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.
Annually, the Group considers whether intangible assets and/or goodwill are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cash flows.
Provision is made for potential sales credit notes required against pre year end revenue and trade debtors. These provisions require managements' best estimate, with reference to historical experience, of the extent to which sales credit notes are likely to be required.
Turnover is attributable to one continuing activity, the marketing, design, manufacture and installation of quality fitted furniture for home studies, lounges, home cinema, offices, bedrooms, staircases, kitchens and exterior and interior doors.
Turnover principally consists of sales made in the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
Details of the company's subsidiaries at 30 April 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
An impairment loss of £235,119 (2023: £522,000) was recognised against trade debtors.
Amounts owed by group undertakings are repayable on demand, unsecured and bear no interest.
Amounts owed by group undertakings are repayable on demand, unsecured and bear no interest.
Included within bank loans of £615,000 (2023: £570,000) is an offset of debt arrangement fees of £135,000 (2023: £180,000).
Net obligations under hire purchase obligations are secured against the assets to which they relate.
Net obligations under hire purchase obligations are secured against the assets to which they relate.
Finance lease payments represent rentals payable by the company or group 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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions of £123,000 (2023: £139,000) were payable to the Aegon and St Jams Place funds at the reporting date.
The A ordinary shareholders are entitled to a discretionary participating dividend for each financial year commencing for the year ended 30 April 2020 onwards. Further details of the dividend entitlement can be found in the Company's articles of association.
On a return of capital, shareholders are repaid any board approved participating dividend arrears first, then the issue price is repaid to all equity shareholders for each equity share held by them and finally any remaining capital is distributed amongst all shareholders pari passu.
The A ordinary shareholders also have enhanced voting rights upon certain events as detailed in the Company's Articles of Association.
In all other respects the holders of ordinary shares rank pari passu.
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
Key management personnel are defined as the parent and subsidiary directors of the Group.
The total emoluments of key management personnel (salaries, wages, benefits in kind and pension costs) were £1,565,547 in relation to 11 employees (2023: £1,500,814 in relation to 11 employees).
Fees of £108,000 (2023: £106,000) were paid to Alcuin Capital Partner LLP during the year.
As at 30 April 2024, The Third Alcuin Fund Limited Partnership (a fund controlled by Alcuin Capital Partners LLP) hold a 49% share in the BHID Group Limited. Given this shareholding and rights within the articles of association, they are deemed to be the controlling party.
On 10 May 2024 the entire share capital of BHID Group Limited was acquired by Hartford Bidco Limited. As a result of the transaction, the ultimate parent company of BHID Group Limited is now Hartford Topco Limited.
Immediately prior to this transaction, owing to its shareholding and rights within the articles of association, The Third Alcuin Fund Limited Partnership were deemed to be the ultimate controlling party. Immediately post this transaction, The Third Alcuin Fund Limited Partnership continue to be deemed to be the ultimate controlling party.
The Company is subject to a bank guarantee with its subsidiary undertakings. The contingent liability at 30 April 2024 was £7,250,000 (2023: £8,000,000).