Company Registration No. 10499976 (England and Wales)
CHIK'N LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CHIK'N LIMITED
COMPANY INFORMATION
Directors
C Clarke
R Clarkson
A Harrison
Secretary
T Morris
Company number
10499976
Registered office
146 Freston Road
London
W10 6TR
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
CHIK'N LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
CHIK'N LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The Directors present their strategic report for Chik’n Ltd (trading as Chicken Shop) for the year ended 31 December 2023. In preparing this strategic report, the directors have complied with s414C of the Companies Act 2006.

 

Principal activities

Chicken Shop is a chef lead chain of restaurants born out of the melting pot of London, trading since 2018 as “Chik’n” and as “Chicken Shop” since 2022. The concept is a simple one:

 

At year-end, the Company operated 6 restaurants in the London. The directors believe that there are strong growth prospects in the premium fried chicken market and intend to continue the roll out of Chicken Shop in the United Kingdom.

Fair Review of the Business and Key Performance Indicators (KPIs)

The Company continued to increase sales from its existing 6 restaurants through the year, with an acceleration in performance over the second half of the year. In 2023 the Company did not see a recurrence of the high input cost inflation experienced in 2022, however the impact of a significant increase in the minimum wage in April 2023 necessitated the implementation of modest price increases to offset this.

Revenue increased by 57.3% to £7.53m (2022: £4.79m) reflecting the like-for-like growth in all sites. Operating losses decreased to £4.10m (2022: £5.39m) as a result of the improved sales. The Company reported a loss after tax of £6.38m (2022: £6.54m).

Year                2023    2022

Store numbers            6    6

Turnover (£m)            7.53    4.79

Operating loss (£m)         (4.10)    (5.39)

Employment

The Company continues to pay in excess of the national living wage with a pay structure that enables team members to be paid the London Living Wage once successfully learning all of our key skills. Post year end we introduced a mystery shopper programme and expect to pay up to 1% of revenue to employees in incentives compensation for excellent service and standards.

The Company is committed to developing and promoting its employees and invests significant time and money upgrading the skill set of its people. The Company trains its employees in technical job skills, as well as softer skills required to be excellent leaders.

The Company strives for an inclusive and open culture. We hire diverse and talented individuals, and all can build a successful career at Chicken Shop.

Diversity, equality and inclusion

At Chicken Shop we are incredibly proud of our culture and people. Chicken Shop is committed to encouraging equality, diversity and inclusion within our teams, including the employment of disabled persons, and preventing unlawful discrimination. Family is one of our values and together we continue in making sure that our restaurants are a safe and happy place for all of our people to be themselves and to feel accepted. We actively promote diversity and inclusion across the Company and strive to demonstrate diversity through our leadership. We carry out all recruitment, promotion and other types of selection procedures on the basis of merit, using non-discriminatory and as far as possible objective criteria.

CHIK'N LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Credit risk

The Company’s financial assets are bank balance and cash and trade and other receivables. The Company’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

Customer transactions are largely settled at the point of sale, with minimal trade receivables held apart from this. The limited number means that risk is concentrated in a small number of counterparties, meaning easier monitoring of the credit risk position.

Currency risk

The Company has minor exposure to Euro exchange risk as a result of European supply, which is not significant enough to hedge.

Interest rate risk

The Company borrows in Sterling with fixed rates of interest. Interest rates were not hedged during the period.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future development, the Company has debt finance from its principal shareholder. The Company had £15.275m of debt provided by its principal shareholder at year end.

Impairment risk

The directors understanding of the risks associated with the assets held by the entity relates to the potential impairment of those assets. To identify any risk of impairment the Company reviews the financial performance of its restaurants on a regular basis.

Climate change

The Company is determined to reduce its carbon footprint. Packaging is optimised by enabling customers to choose Dine In or Takeaway at the point of ordering, with ancillary items such as napkins available on request. All straws are paper, all cutlery is wood. All waste is either recycled or used to generate power, zero waste goes to landfill. All of our used kitchen oil is recycled. This is part of the Company’s improved long-term sustainability plan.

Supply chain and inflationary risk.

The Company has in recent years been subject to periods of high inflation, and we continue to operate with tight supply of chicken in the UK. We have built long standing partnerships with our key suppliers, allowing us to have full visibility of the supply chain and thus mitigate inflationary pressures as much as possible, along with ensuring continuity of supply.

Health and Safety

Ensuring our employees and customers are safe is of paramount importance to our business. We set the highest standards of health and safety and perform regular audits of our restaurants to ensure these are met.

Customers demand

In a high inflation environment there is a risk of reduced customer demand. We continue to focus on our core principles and believe that these will continue to give us a competitive advantage.

Increased competition

Fried chicken is becoming a more popular segment in the UK hospitality industry with more US chains in particular entering the market or announcing their plans to. We will continue to focus on our key differentiating factors to maintain our position in the market.

Cyber security and data protection

The Company understands the need to protect both our valuable business information and our customers sensitive data from potential cyber threats. We adopt a proactive approach in our cybersecurity strategy, updating our systems as required and the Company has implemented data protection protocols that limit access to confidential information.

CHIK'N LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

On behalf of the board

R Clarkson
Director
2 October 2024
CHIK'N LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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 that of providing restaurant services.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

C Clarke
R Clarkson
A Harrison
J Mahendran
(Resigned 9 August 2023)
Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Auditor

HW Fisher 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.

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.

On behalf of the board
R Clarkson
Director
2 October 2024
CHIK'N LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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:

 

 

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.

CHIK'N LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CHIK'N LIMITED
- 6 -
Opinion

We have audited the financial statements of Chik'n 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 FRS 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:

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

The 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:

CHIK'N LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHIK'N LIMITED
- 7 -
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:

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

CHIK'N LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHIK'N LIMITED
- 8 -

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

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. The primary responsibility for the prevention and detection of irregularities and fraud rests with management.

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.

Other matter

The financial statements for the year ended 31 December 2022 were unaudited.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Simon Mott-Cowan (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
2 October 2024
CHIK'N LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
as restated
Notes
£
£
Turnover
3
7,449,296
4,735,953
Cost of sales
(2,338,379)
(1,774,619)
Gross profit
5,110,917
2,961,334
Distribution costs
4
(873,364)
(610,769)
Administrative expenses
(8,404,471)
(8,174,848)
Other operating income
77,742
62,000
Operating loss
5
(4,089,176)
(5,762,283)
Interest receivable and similar income
9
270
382
Interest payable and similar expenses
10
(2,273,842)
(1,147,982)
Loss before taxation
(6,362,748)
(6,909,883)
Tax on loss
11
-
0
-
0
Loss for the financial year
(6,362,748)
(6,909,883)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CHIK'N LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
12
1,125,136
1,206,618
Tangible assets
13
5,414,281
6,086,386
6,539,417
7,293,004
Current assets
Stocks
14
69,036
61,311
Debtors
15
546,161
588,006
Cash at bank and in hand
222,818
41,228
838,015
690,545
Creditors: amounts falling due within one year
16
(1,846,502)
(2,088,337)
Net current liabilities
(1,008,487)
(1,397,792)
Total assets less current liabilities
5,530,930
5,895,212
Creditors: amounts falling due after more than one year
17
(18,868,485)
(12,870,019)
Net liabilities
(13,337,555)
(6,974,807)
Capital and reserves
Called up share capital
20
30
30
Share premium account
21
6,225,783
6,225,783
Profit and loss reserves
(19,563,368)
(13,200,620)
Total equity
(13,337,555)
(6,974,807)
The financial statements were approved by the board of directors and authorised for issue on 2 October 2024 and are signed on its behalf by:
R Clarkson
Director
Company Registration No. 10499976
CHIK'N LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
30
6,225,783
(6,290,737)
(64,924)
Year ended 31 December 2022 as restated
Loss and total comprehensive income for the year
-
-
(6,909,883)
(6,909,883)
Balance at 31 December 2022 as restated
30
6,225,783
(13,200,620)
(6,974,807)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(6,362,748)
(6,362,748)
Balance at 31 December 2023
30
6,225,783
(19,563,368)
(13,337,555)
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Chik'n Limited is a private company limited by shares incorporated in England and Wales. The registered office is 146 Freston Road, London, W10 6TR.

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. 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:

 

 

The financial statements of the company are consolidated in the financial statements of Freston Chicken Limited. These consolidated financial statements are available from its registered office, 146 Freston Road, London, United Kingdom, W10 6TR.

1.2
Going concern

In determining whether the Company's financial statements can be prepared on a going concern basis, the directors have considered all the factors likely to affect their future development, performance and their financial position. The directors have approved a budget for 2024. Existing loan facilities are provided by a shareholder of the controlling holding company and the lender has confirmed that they will not request repayment of the loan within at least 12 months. After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months following the signing of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing these financial statements on the basis of continuing support from the ultimate shareholder.

1.3
Turnover

Turnover represents amounts receivable for food and drink net of VAT.

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 at the point of sale), 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.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 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:

Website, technology and integration
Over 3 years
Brand
Over 3 - 10 years
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 land and buildings
Over 10 years
Plant and equipment
Over 10 years
Fixtures and fittings
Over 10 years
Computers
Over 3 years

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.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.7
Stocks

Stocks consists of ingredients and goods purchased for resale and are stated at the lower of cost and estimated selling price.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets that include cash in hand.

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. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets 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.

CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

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 and loans, are initially recognised at transaction price. 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

 

 

 

 

CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.12
Leases

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.

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. Additional costs incurred by the tenant are recharged by the entity and recognised as revenue in line with the services provided.

1.13
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Impairment of brand

FRS 102 Section 27 requires an assessment at each reporting date of whether there is any indication that an asset within its scope may be impaired.

 

In 2022 the entity acquired the brand "Chicken Shop", which has been included in intangible fixed assets. Management has performed an impairment review of the brand by preparing detailed forecasts, which take into account the entity's cost of debt funding, and provide a basis for valuing the expected future cashflows from the brand.

 

This is an area of significant judgment, as any change in the assumptions, including the anticipated performance, could materially impact the impairment evaluation. Based on this review management do not believe the asset is impaired.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Food and drink
7,449,296
4,735,953
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 16 -
2023
2022
£
£
Other significant revenue
Interest income
270
382
Grants received
-
12,000
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
7,449,296
4,735,953
4
Reclassification of distribution costs

A proportion of the client's sales relate to sales via delivery partners, on which commissions are payable. The prior year financial statements included £610,769 of commissions within administrative expenses. Current and prior year commissions payable have been reclassified to distribution costs which better reflects the nature of these expenses.

5
Operating loss
2023
2022
Operating loss 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
-
0
372
Government grants
-
(12,000)
Depreciation of owned tangible fixed assets
853,887
592,069
Amortisation of intangible assets
125,832
107,491
Loss on disposal of tangible assets
59,500
370,921
Operating lease charges
900,668
703,721
6
Auditor's remuneration
2023
2022
Audit of the financial statements of the company
21,000
-
0
7
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Restaurant staff
134
139
Support staff
13
13
Total
147
152
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Employees
(Continued)
- 17 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,656,847
3,027,987
Social security costs
317,577
271,599
Pension costs
74,850
69,760
4,049,274
3,369,346
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
140,278
119,000
Company pension contributions to defined contribution schemes
1,454
1,321
141,732
120,321

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022: 1).

9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
270
382
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank loans
3,154
2,652
Interest on other loans
2,270,688
1,145,330
2,273,842
1,147,982
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Taxation

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:

2023
2022
£
£
Loss before taxation
(6,362,748)
(6,909,883)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(1,496,518)
(1,312,878)
Expenses which are not deductible
6,181
21,004
Unrecognised deferred tax
1,411,209
1,321,373
Fixed asset differences
79,128
(29,499)
Taxation charge for the year
-
-
12
Intangible fixed assets
Website, technology and integration
Brand
Total
£
£
£
Cost
At 1 January 2023
56,636
1,270,916
1,327,552
Additions
44,350
-
0
44,350
Disposals
(10,709)
-
0
(10,709)
At 31 December 2023
90,277
1,270,916
1,361,193
Amortisation and impairment
At 1 January 2023
23,593
97,341
120,934
Amortisation charged for the year
25,288
100,544
125,832
Disposals
(10,709)
-
0
(10,709)
At 31 December 2023
38,172
197,885
236,057
Carrying amount
At 31 December 2023
52,105
1,073,031
1,125,136
At 31 December 2022
33,043
1,173,575
1,206,618
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Total
as restated
£
£
£
£
£
Cost
At 1 January 2023
4,516,471
2,153,856
400,713
353,699
7,424,739
Additions
118,890
19,546
36,956
65,890
241,282
Disposals
(42,013)
(32,350)
(4,692)
-
0
(79,055)
At 31 December 2023
4,593,348
2,141,052
432,977
419,589
7,586,966
Depreciation and impairment
At 1 January 2023
1,014,165
256,124
15,724
52,340
1,338,353
Depreciation charged in the year
468,683
213,596
39,568
132,040
853,887
Eliminated in respect of disposals
(10,817)
(7,161)
(1,577)
-
0
(19,555)
At 31 December 2023
1,472,031
462,559
53,715
184,380
2,172,685
Carrying amount
At 31 December 2023
3,121,317
1,678,493
379,262
235,209
5,414,281
At 31 December 2022
3,502,306
1,897,732
384,989
301,359
6,086,386
14
Stocks
2023
2022
£
£
Food and drink
69,036
61,311
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
146,422
32,472
Other debtors
200,772
302,819
Prepayments and accrued income
198,967
252,715
546,161
588,006
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
18
22,222
22,223
Trade creditors
306,369
969,242
Taxation and social security
396,135
81,948
Other creditors
106,434
79,191
Accruals and deferred income
1,015,342
935,733
1,846,502
2,088,337

 

17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
18
11,111
33,333
Other borrowings
18
15,275,000
11,525,000
Accruals and deferred income
3,582,374
1,311,686
18,868,485
12,870,019

Other borrowings include a loan received in the main from a majority shareholder of the parent company. The loan is secured by a fixed and floating charge and negative pledge which has been registered by the shareholder of the parent company over all the property and undertakings of the Company.

 

Additional funds drawn down on the loan have been disclosed in the Relates Parties. See note 23.

18
Loans and overdrafts
2023
2022
£
£
Bank loans
33,333
55,556
Other loans
15,275,000
11,525,000
15,308,333
11,580,556
Payable within one year
22,222
22,223
Payable after one year
15,286,111
11,558,333
CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
74,850
69,760

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.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares A to E* of £0.00001 each of 0.001p each
1,635,525
1,635,525
16
16
Deferred shares of £0.00001 each of 0.001p each
1,387,375
1,387,375
14
14
3,022,900
3,022,900
30
30

All shares shall be treated as if they constituted one class of share, save for the following additional rights:

 

A - E shares have full rights to dividend distributions. No distributions or dividends will be paid among the holders of the deferred shares without the prior consent of the A Shareholder majority.

 

In the event of a capital distribution, following payment of the company's liabilities including payment of any principal and interest due in respect of the company's borrowings, the following order of priority applies:

 

 

A shares carry full voting rights. B - E shares and deferred shares do not carry full voting rights, and are only subject to a vote where there is a general meeting or shareholder written resolution involving a change to the rights attached to their particular ordinary or deferred share class.

 

In addition, in the event of a funding adjustment, B shares can hold the same rights as A shares, and the above restrictions will no longer apply.

 

The shares do not confer any rights of redemption.

21
Share premium account

This reserve represents amounts paid in excess of the nominal value of share capital.

CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
22
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
867,041
917,021
Between two and five years
3,294,164
2,847,041
In over five years
2,346,370
3,051,370
6,507,575
6,815,432
23
Related party transactions

During the year the company drew down a further £3,750,000 (2022: £8,275,000) of an existing loan facility from the main shareholder. Included within other loans due after more than one year is the total outstanding loan amount plus accrued interest calculated at 15% per annum. Total interest accrued during the year is £2,270,688 (2022: £1,145,330).

24
Ultimate controlling party

The ultimate controlling party is Freston Chicken Limited, and its registered office is 146 Freston Road, London, United Kingdom, W10 6TR. The results of Chik'n Limited are included within the consolidated financial statements of Freston Chicken Limited, which are publically available at Companies House.

CHIK'N LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
25
Prior period adjustment

A prior year adjustment was made to record the disposal of tangible fixed assets with a net book value of £370,921, which were scrapped during the year ended 31 December 2022.

Changes to the balance sheet
As previously reported
Adjustment at 1 Jan 2022
Adjustment at 31 Dec 2022
As restated at 31 Dec 2022
£
£
£
£
Fixed assets
Leasehold land and buildings
3,612,838
-
(110,532)
3,502,306
Plant and equipment
1,944,474
-
(46,742)
1,897,732
Fixtures and fittings
581,253
-
(196,264)
384,989
Computers
318,742
-
(17,383)
301,359
Tangible assets
6,457,307
-
(370,921)
6,086,386
Net assets
(6,603,886)
-
(370,921)
(6,974,807)
Capital and reserves
Profit and loss
(12,829,699)
-
(370,921)
(13,200,620)
Reconciliation of changes in equity
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Loss on disposal of fixed assets
-
(370,921)
Equity as previously reported
(64,924)
(6,603,886)
Equity as adjusted
(64,924)
(6,974,807)
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