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Harding Brothers Retail Limited

Annual Report and Financial Statements
Period from 31 December 2022 to 31 December 2023

Registration number: 06126331

 

Harding Brothers Retail Limited

Contents

Company Information

1

Strategic Report

2 to 6

Directors' Report

7 to 8

Statement of Directors' Responsibilities

9

Independent Auditor's Report

10 to 13

Profit and Loss Account

14

Balance Sheet

15

Statement of Changes in Equity

16

Notes to the Financial Statements

17 to 36

 

Harding Brothers Retail Limited

Company Information

Directors

N G Harding

A O A Pourchet

M Coupe

C J Matthews

W J Showalter

Registered office

Avonmouth Way
Avonmouth
Bristol
BS11 8DD

Auditors

PKF Francis Clark
Statutory Auditor
90 Victoria Street
Redcliffe
Bristol
BS1 6DP

 

Harding Brothers Retail Limited

Strategic Report for the Period from 31 December 2022 to 31 December 2023

The directors present their strategic report for the period from 31 December 2022 to 31 December 2023.

Principal activity

The principal activity of the company is the provision of retail operations on cruise ships as a concessionaire for cruise-line customers.

Strategy

The Company’s strategy is to grow the business in a profitable and sustainable way. The Company intends to expand its specialist retail proposition through best-in-class retail execution and strong partnership with the cruise lines, and with its key vendors.

Business review

The Company is pleased to have delivered strong revenue growth with turnover of £296m for the year 2023, up from £190m in 2022. This growth was the result of our strong partnership with the cruise lines resulting in an increased number of trading ships, as well as high occupancy onboard.

For 2023 as a whole, the Company was loss making and reported a loss before tax of £20.0m (2022 - loss before tax of £13.1m). 2023 was a year of transition post-covid where the Company returned to operating at full capacity and increased significantly in scale. The year was also characterised by high inflation in terms of costs of goods, logistics costs and labour costs which affected the Company’s profits during the first half of the year 2023.

During the second half of 2023, the Company successfully renegotiated its cost base with key suppliers and cruise lines. As a result, Company performance since September 2023 has been profitable.

The business also continued to benefit from a very strong underlying cruise market as passengers continue to return to ships and the market is enjoying significant growth.

Successful completion and closing of the 2021 CVA

During 2023, the Company continued to repay its creditors in relation to the Company Voluntary Arrangement (CVA) that was launched in 2021 as a result of COVID-19. The final CVA repayments were completed in January 2024, in advance of the required timeline, and the Company has now successfully extinguished all of its financial obligations in connection with the 2021 CVA.

The company's key financial and other performance indicators during the period were as follows:

Financial KPIs

Unit

2023

2022

No. of ships (at the year end)

No.

90.00

84.00

Passengers

Millions

59.60

34.20

Occupancy

%

95.00

73.00

PPD (Revenue per passenger day)

£

4.97

5.55

Turnover

£m

296.00

189.90

EBITDA (loss)

£m

(7.60)

(3.50)

 

Harding Brothers Retail Limited

Strategic Report for the Period from 31 December 2022 to 31 December 2023 (continued)

Principal risks and uncertainties
Liquidity risk
The Company manages its liquidity via an asset-backed lending arrangement with Breal Zeta Commercial Finance Designated Activity Company ("BZ") whereby BZ would fund up to £70m, secured upon and subject to levels of inventory and account receivables. During the year ended 31 December 2023, and in light of the challenging trading conditions experienced, certain of the financial covenants attached to the lending arrangement were breached. Subsequent to the year-end BZ have provided a covenant breach waiver (covering each breach) confirmation reflective of their ongoing support for the company. This facility is due to expire on 30 June 2025, but the Company has no concerns regarding the extension of this facility beyond June 2025. The Company is in current discussions to extend the facility to June 2026, which BZ support subject to terms being agreed.

During the first half of the year, where the Company was not cash generative through operations, and still was paying off the CVA, the Company raised £21.3m of capital through issue of shares to its parent company, Harding Brothers Holding Limited. Burlington Loan Management DAC loaned Harding Retail IHC Limited these funds, and Harding Retail IHC Limited passed these down to Harding Brothers Holdings Limited by way of share issue. In September 2023, the debt from Harding Retail IHC Limited to Burlington Loan Management DAC was converted to equity. More details around this transaction can be found in the consolidated financial statements of Harding Retail IHC Limited.

The Company has been cash generative since September 2023 with strong liquidity, and forecasts show no further cash injection from the parent is necessary.

Going concern
The Company relies on the support of its ultimate parent company, and its affiliated asset-lending platform, Breal Zeta Commercial Finance Designated Activity Company. (“BZ”). The directors have received written confirmation of this ongoing support from each of the ultimate parent and BZ. The Company has strong relationships with its cruiseline partners, with a significant proportion of contracts for ship operations going in to 2027.

Challenging trading conditions in the first half of 2023 led the Company to restructure its cost base by negotiating with key suppliers and cruiseline partners, and as a result has been profitable and cash generative since September 2023.

During the year ended 31 December 2023, and in light of the challenging trading conditions experienced, certain of the financial covenants attached to the BZ lending arrangement were breached. Subsequent to the year-end BZ have provided a covenant breach waiver (covering each breach) confirmation reflective of their ongoing support for the company.

The directors’ assessment of the cash-flows, forecast sensitivities, risks and the above-mentioned mitigating factors lead them to conclude that with the support of the ultimate parent company, it is appropriate to prepare the accounts on a going concern basis.

Legislative risks
Tax and duty-free retailing are subject to restrictions under EU legislation when ships operate exclusively within the EU. In addition to this, some cruise lines will offer domestic cruises in countries such as Australia and Iceland. It is harder to offer a compelling consumer offer where sales taxes apply and as such revenues on these cruises are lower than duty-free cruises. The duty-free retailing sector generally (including international airports, border shops and ferries) is therefore subject to any further widening of co-operation between states to limit tax and duty-free sales.

 

Harding Brothers Retail Limited

Strategic Report for the Period from 31 December 2022 to 31 December 2023 (continued)

Competitive risks
The cruise ship tax and duty-free retail marketplace is highly competitive with a small number of operators. Market information on future tenders is good and as such when contracts are coming to an end the competition for them can be high. This represents both a risk and an opportunity. The Company has developed several unique approaches that it believes offer customers a more comprehensive portfolio of services than its competitors and as such it tries to differentiate itself on a number of levels, as well as being 100% cruise retail focused and possessing associated specialist knowledge and skills.

Foreign currency risk
This represents the impact of adverse movements in foreign currency exchange rates in respect of revenues denominated in currencies other than the reporting currency. Whilst the business tries wherever possible to create a natural hedge by purchasing and selling in the same currencies there remains an exposure. At the reporting date the Company held no hedging in respect of this risk as the directors considered the risk to be low, however activities are expected in 2024 to better manage the Company’s foreign currency risk.

Credit risk
The Company trades mainly with large, publicly quoted companies. The risk of these counterparties failing to make payments when due is considered by the directors to be much lower than average. Company will continue to minimise credit terms and operate a rigorous process of credit control. No customer has a material overdue balance at the reporting date.

Interest rate risk
Interest rate risk is reviewed by the directors. At the current time the directors see a benign interest rate outlook over the repayment period of the current facility and as such have placed no hedging against increases in interest rates. They keep this position under review and should this outlook change then due consideration will be given to protecting against this risk.

Inflation risk
Inflation rates within the geographies that the Company trades within were high during 2023, although these have reduced throughout the year. Inflation risk is high, where rising inflation may impact the disposable income of cruise line guests. A reduction in general disposable income could lead to fewer luxury purchases or less travel in general. The Company is paying close attention to the changing inflation rates.

Section 172(1) statement

The Directors are aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies Act 2006 (the Act). In accordance with this responsibility, the board adopts a long-term mindset with regard to decision making and stakeholder relationships. Set out below are some specific examples of the boards approach to stakeholder engagement and how that stakeholder engagement has influenced the Directors decisions during the year.

 

Harding Brothers Retail Limited

Strategic Report for the Period from 31 December 2022 to 31 December 2023 (continued)

Customers
Customer satisfaction is critical to the success of the business. To deliver the best possible offering to our customers, it was decided that the business should undertake a “Customer Transformation Plan” (CTP).

The purpose of the CTP is to review several key pillars of the business to ensure the passengers onboard are engaged and satisfied with their shopping experience. Towards the end of 2023, the business began mapping the key pillars of the CTP - to allow changes to be designed and embedded through 2024 and early 2025.

Key focuses of the CTP include: Stock Availability, Pricing & Promotions and People. The detailed work on these areas did not begin until early 2024, but the decision to undertake the project, and the high-level definition of that project, took place in 2023.
 

Employee engagement
The Directors recognise that the success of the company, is largely underpinned by a strong workplace culture and effective people strategy. During the year, the Company undertook “pulse” surveys via a third-party tool to obtain feedback from colleagues covering a broad range of areas, including: reward, autonomy, enablement, leadership and engagement. Sessions were held with departments to gain a better understanding of the survey results, to allow departments to provide suggestions and action plans to remedy areas where scores vary to the company average, or the previous pulse survey.

All employees are also invited to attend a monthly business update, led by the executive and senior leadership teams. These updates include the latest financial information, progress updates on various underway projects, and spotlights on different areas of the business. These updates provide employees with the opportunity to ask anonymous questions, to ensure the employees are getting response to their areas of interest.

The Company also introduced a group of “Mental Health First Aiders”, to give employees a safe environment to discuss both work and non-work-related issues that they would like to discuss or receive support on. The Company funded external training for these first aiders, to give them the best tools to support their colleagues.
 

Suppliers
Building and maintaining trusted partnerships with the Company’s suppliers and cruise-line partners is fundamental to the long-term success of the Company. During 2023, the Board engaged with a large number of the business key suppliers, to forge closer partnerships that work towards an improved combined result for both the Company and its suppliers. As a result of these exchanges, several key contracts were renegotiated to strengthen the Company’s financials.

 

Harding Brothers Retail Limited

Strategic Report for the Period from 31 December 2022 to 31 December 2023 (continued)

Management Structure
Key changes were made to the Company’s management structure during the year. These changes include the appointment of a new CEO, Chris Matthews, and a new CFO, Bill Showalter. Both bring a significant amount of retail expertise and deep commercial experience and functional expertise to the business.

Approved and authorised by the Board on 8 October 2024 and signed on its behalf by:
 

.........................................
A O A Pourchet
Director

.........................................
W J Showalter
Director

 

Harding Brothers Retail Limited

Directors' Report for the Period from 31 December 2022 to 31 December 2023

The directors present their report and the financial statements for the period from 31 December 2022 to 31 December 2023.

Directors of the company

The directors who held office during the period were as follows:

N G Harding

J K Prescott (resigned 13 October 2023)

A O A Pourchet

M Coupe

C J Matthews (appointed 16 October 2023)

W J Showalter (appointed 16 October 2023)

Directors' indemnities

The Company has made qualifying third-party indemnity provisions, by way of insurance, for the benefit of its directors, which were made during the year and remain in force at the date of this report.

Energy and carbon reporting

This information has been disclosed within the consolidated group accounts of Harding Retail IHC Limited.

Future developments

The Company is launching its Customer Transformation Plan (CTP) in 2024, as noted in the strategic report. It is expected this project will incur up front costs, with benefits starting to crystallise in the later half of 2024. The Company is expecting to see strong performance with a positive EBITDA, given the restructure of key supplier contracts in the latter half of 2023.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

 

Harding Brothers Retail Limited

Directors' Report for the Period from 31 December 2022 to 31 December 2023 (continued)

Directors' liabilities

The Company has made qualifying third-party indemnity provisions, by way of insurance, for the benefit of its directors, which were made during the year and remain in force at the date of this report.

Approved and authorised by the Board on 8 October 2024 and signed on its behalf by:
 

.........................................
A O A Pourchet
Director

.........................................
W J Showalter
Director

 

Harding Brothers Retail Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

 

Harding Brothers Retail Limited

Independent Auditor's Report to the Members of Harding Brothers Retail Limited

Opinion

We have audited the financial statements of Harding Brothers Retail Limited (the 'company') for the period from 31 December 2022 to 31 December 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the period then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 director's 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 original financial statements were 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.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Harding Brothers Retail Limited

Independent Auditor's Report to the Members of Harding Brothers Retail Limited (continued)

Opinion on other matter 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 Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 9, 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 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:

 

Harding Brothers Retail Limited

Independent Auditor's Report to the Members of Harding Brothers Retail Limited (continued)

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• we identified the laws and regulations applicable to the company through discussions with directors and other management, or from our commercial knowledge, experience of the retail and travel sector and by reviewing the company website and commercial terms and conditions;
• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, The General Data Protection Regulation (''GDPR''), anti bribery, employment, and health and safety legislation;
• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

We also evaluated management's incentives and opportunities for management bias, override to controls and manipulation of the financial statements. The key incentive identified is to manipulate revenue and we determined that the principal risks were related to the understatement of loss, either through overstating revenue, or understanding expenditure. To address the risk, we:

• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions;
• performed substantive procedures regarding completeness and accuracy of revenue;
• performed substantive procedures regarding stock existence;
• reviewed cut-off in respect of income and expenditure;
• assessed whether judgements and assumptions made in determining the accounting estimates were indictive of potential bias; and
• investigated the rationale behind significant or unusual transactions

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;
• reading the minutes of meetings of those charged with governance;
• enquiries of management regarding their knowledge of any non-compliance with laws and regulations that could affect the financial statements. As part of these enquiries we also discussed with management whether there have been any known instances of fraud, of which there were none;
• review of the company's GDPR policy and enquiries to the Data Protection Officer as to the occurrence and outcome of any reportable breaches;
• conducting a search for ICO enforcement actions against the company on the ICO website with respect to GDPR;
• reviewed legal and professional costs to identify any possible non-compliance or legal costs in respect of non-compliance.

 

Harding Brothers Retail Limited

Independent Auditor's Report to the Members of Harding Brothers Retail Limited (continued)

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. 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, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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

......................................
Nicholas Farrant BA MSc FCA (Senior Statutory Auditor)
PKF Francis Clark, Statutory Auditor

90 Victoria Street
Redcliffe
Bristol
BS1 6DP

16 October 2024

 

Harding Brothers Retail Limited

Profit and Loss Account

Period from 31 December 2022 to 31 December 2023

Note

2023
£

2022
£

Turnover

3

296,145,361

189,872,397

Cost of sales

 

(247,411,620)

(155,155,163)

Gross profit

 

48,733,741

34,717,234

Administrative expenses

 

(61,716,709)

(44,026,767)

Operating loss before exceptional administrative expenses and income

4

(12,982,968)

(9,309,533)

Exceptional administrative expenses

8

-

(200,465)

Exceptional income

9

-

73,226

Operating loss

 

(12,982,968)

(9,436,772)

Other interest receivable and similar income

10

-

36,993

Interest payable and similar expenses

11

(6,979,600)

(3,732,139)

Loss before tax

 

(19,962,568)

(13,131,918)

Tax on loss

12

-

(7,054,325)

Loss for the financial period

 

(19,962,568)

(20,186,243)

The above results were derived from continuing operations.

The company has no recognised gains or losses for the period other than the results above.

 

Harding Brothers Retail Limited

Balance Sheet

31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

13

7,437,433

6,142,800

Debtors

14

2,198,005

-

 

9,635,438

6,142,800

Current assets

 

Stocks

15

63,734,615

63,745,555

Debtors

16

29,717,721

34,182,100

Cash at bank and in hand

 

3,226,956

241,940

 

96,679,292

98,169,595

Creditors: Amounts falling due within one year

18

(115,386,172)

(114,671,269)

Net current liabilities

 

(18,706,880)

(16,501,674)

Net liabilities

 

(9,071,442)

(10,358,874)

Capital and reserves

 

Called up share capital

21

1,002

1,001

Share premium reserve

21

36,031,873

14,781,874

Profit and loss account

(45,104,317)

(25,141,749)

Shareholders' deficit

 

(9,071,442)

(10,358,874)

Approved and authorised by the Board on 8 October 2024 and signed on its behalf by:
 

.........................................
A O A Pourchet
Director

.........................................
W J Showalter
Director

Company Registration Number: 06126331

 

Harding Brothers Retail Limited

Statement of Changes in Equity

Period from 31 December 2022 to 31 December 2023

Share capital
£

Share premium
£

Retained earnings
£

Total
£

At 31 December 2022

1,001

14,781,874

(25,141,749)

(10,358,874)

Loss for the period

-

-

(19,962,568)

(19,962,568)

New share capital subscribed

1

21,249,999

-

21,250,000

At 31 December 2023

1,002

36,031,873

(45,104,317)

(9,071,442)



 



 

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 January 2022

1,000

3,031,875

(4,955,506)

(1,922,631)

Loss for the period

-

-

(20,186,243)

(20,186,243)

New share capital subscribed

1

11,749,999

-

11,750,000

At 30 December 2022

1,001

14,781,874

(25,141,749)

(10,358,874)



 

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The registered office address is disclosed within Company Information (Page 1), this is also the principal place of business.

These financial statements were authorised for issue by the Board on 8 October 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The functional currency of the Company is considered to be Pounds Sterling, due to the prevailing economic environment it operates in. The financial statements are also presented in Pounds Sterling.

Monetary amounts in these financial statements are rounded to the nearest pound.

Summary of disclosure exemptions

The Company meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it being:

- The requirement of Section 7 of Cash Flows; and
- The requirement of Section 33 Related Party Disclosures paragraph 33.7

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

Going concern

Having taken into consideration the loss for the year of £19,962,567 (2022 - £20,186,242), net liabilities of £9,071,442 (2022 - £10,358,873) and cash flow during the year to 31 December 2023, and the forecast for the coming years, the Directors are satisfied that the Company remains a going concern. This is as a result of making all necessary inquiries, including receiving undertakings of support from the equity and debt funders of the Company and reviewing the forecasts for a period of at least 12 months from the date of approval of these financial statements.

In making this assessment, the directors have considered the following key factors in particular.

The Company relies on the support of its new ultimate parent company, and its affiliated asset-lending platform, Breal Zeta Commercial Finance Designated Activity Company. (“BZ”). The directors have received written confirmation of this ongoing support from each of the ultimate parent and BZ. There is also an expectation that BZ will extend the facility provided in June 2025.

Challenging trading conditions in the first half of 2023 led the Company to restructure its cost base by negotiating with key suppliers and cruiseline partners, and as a result has been profitable and cash generative since September 2023.

The Company has strong relationships with its cruiseline partners, with contracts for ship operations going in to 2027.

During the year ended 31 December 2023, and in light of the challenging trading conditions experienced, certain of the financial covenants attached to the BZ lending arrangement were breached. Subsequent to the year-end BZ have provided a covenant breach waiver (covering each breach) confirmation reflective of their ongoing support for the company.

The directors’ assessment of the cash-flows, forecast sensitivities, risks and the above-mentioned mitigating factors lead them to conclude that with the support of the ultimate parent company, it is appropriate to prepare the accounts on a going concern basis.

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

Key judgements and sources of estimation uncertainty

In the application of the Company's accounting policies management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

A key judgement that has a significant effect on the financial statements is in respect of going concern, the disclosure within accounting policies describes the processes undertaken around this judgement in more detail.

Another key judgement that has a significant effect on the financial statements is in respect of the treatment of long term debtors. There is an intercompany debtor repayable on demand. The directors judge that this will not be repaid within the next 12 months and that there is no impairment to the recoverability of the debtor.

The key estimates that have a significant effect on the financial statements are in respect of bad debts, stock provision and deferred tax.

Bad debts
The directors have assessed the recoverability of trade debtors and have determined where provisions for bad debts are required. Changes to these assumptions and estimates in future periods reflecting the information available at that point in time may result in outcomes that are materially different. The carrying amount of trade debtors is £28,006,378 (2022 - £22,163,824). The total provision for bad debts is £187,860 (2022 - £nil).

Stock provision
The directors have assessed the value of the company's stock and have determined where provisions are required. Changes to these assumptions and estimates in future periods reflecting the information available at that point in time may result in outcomes that are materially different. In making this assessment the directors have, in particular, considered the shelf life and other obsolescence risk of the company’s stock. The carrying amount of stock is £63,734,615 (2022 - £63,745,555). The total provision applied to stock is £5,306,152 (2022 - £4,830,241).

Deferred tax asset
The directors have assessed the recoverability of the deferred tax asset of £12,846,036 (2022 - £11,492,296) and at 31 December 2023, do not consider there to be sufficient taxable profits in the future to utilise the tax asset in full. As a result, a deferred tax asset of £415,514 (2022 - £976,976) has been recognised within these accounts which has offset the deferred tax liability.

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

Revenue recognition
Revenue is recognised to the extent that the company obtains the right to consideration in exchange for ownership of goods. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duty.

Revenue from the sale of goods is recognised when:
The significant risks and rewards of ownership of the goods have passed to the buyer;
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.

Revenue is earned from acting in the capacity of an agent rather than as the principal in some transactions. The net amount of commission earned is recognised as revenue.

Trunk revenue includes sales for which a local vendor boards the cruise line and sells their products in the company's shops. In this context the company acts as an agent and will be entitled to a pre-agreed margin. In accordance with FRS102, the revenue is recognised as the margin that the company is entitled to.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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

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

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

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

Tangible assets

Tangible assets, excluding shop fixture and fittings, are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Shop fixture and fittings are shown as cost less income received in order to cover the cost of installation.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Costs incurred in acquiring ship contracts related to fit-out costs are included within tangible fixed assets as the contract is expected to result in future net cash flows to the company.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Short leasehold

term of the lease

Plant and machinery

5 years

Fixtures and fittings

the shorter of the contract term and 5 years

Computer equipment

3 or 5 years

Improvements to property

term of lease

Shop fixtures and fittings

related vessel contract term

Provisions

A provision is recognised when the Company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

Financial instruments

Classification
The company holds the following financial instruments:

• Short term trade and other debtors and creditors;
• Long term debtors;
• Asset-based lending; and
• Cash and bank balances.

All financial instruments are classified as basic.

 Recognition and measurement
The company has chosen to apply the recognition and measurement principles in FRS 102.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company’s obligations are discharged, expire or are cancelled.

Except for asset-based lending, such instruments are initially measured at transaction price, including transaction costs, and are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

Asset-based lending is initially measured at transaction price, including transaction costs, and are subsequently carried at amortised cost using the effective interest method.

 Impairment
Assets are assessed at each year end date to establish whether there is any indication of impairment. Where indication of impairment arises, the carrying value of the asset is tested for impairment. Impairment losses are recognised for the amount of which the asset's carrying amount exceeds its recoverable amount.

The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Non-financial assets that have been previously impaired are reviewed at each year end date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

Stocks

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

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to sell; the impairment loss is recognised immediately in profit or loss.

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

3

Turnover

The analysis of the company's revenue for the period from continuing operations is as follows:

2023
£

2022
£

Sale of goods

284,143,202

182,977,968

Trunk sales

12,002,159

6,894,429

296,145,361

189,872,397

It is not appropriate to split the revenue into geographical locations as the majority of sales are made in international waters.

4

Operating loss

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

3,259,349

1,597,266

Impairment loss of fixed assets

1,124,653

-

Write-down of stocks to net realisable value

1,526,628

-

Foreign exchange losses

66,822

487,822

Operating lease rentals

197,505

234,777

(Gain)/loss on disposal of property, plant and equipment

83,651

866

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

5

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

9,207,961

6,737,361

Social security costs

1,022,557

771,965

Pension costs, defined contribution scheme

247,604

186,415

Fundamental reorganisation costs

-

200,465

10,478,122

7,896,206

The staff costs relating to the fundamental reorganisation are included within the total cost of £Nil (2022 - £200,465) as shown in exceptional items, note 8.
 

The average number of persons employed by the company (including directors) during the period was as follows:

2023
No.

2022
No.

Administration and support

200

151

200

151

6

Directors' remuneration

The directors' remuneration for the period was as follows:

2023
£

2022
£

Remuneration

982,082

1,018,132

In respect of the highest paid director:

2023
£

2022
£

Remuneration

615,287

839,650

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

7

Auditor's remuneration

2023
£

2022
£

Audit of the financial statements

69,710

54,400

Total audit fees

69,710

54,400

Taxation compliance services

11,485

10,725

Statutory accounts preparation

5,780

5,400

Total non-audit fees

17,265

16,125


 

8

Exceptional items

2023
£

2022
£

Exceptional items - staff costs

-

200,465

-

200,465

The fundamental reorganisation costs include staff costs of £Nil (2022 - £200,465), as shown in note 5.

9

Exceptional income

2023
£

2022
£

Supplier settlements

-

73,226

During 2021 Harding Brothers Retail Limited launched a Company Voluntary Arrangement (CVA) with the purpose of restructuring its debt. The CVA was successful, and it was agreed that compromised creditors would receive 80% of the debt. The balance showing as supplier settlements is the 20% of the compromised debt that was agreed to be written off, as well as 100% of the debt of some suppliers that did not claim a debt. Following the final payment to creditors in January 2024 the CVA has now closed.
 

10

Other interest receivable and similar income

2023
£

2022
£

Other finance income

-

36,993

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

11

Interest payable and similar expenses

2023
£

2022
£

Interest on borrowings

6,979,600

3,732,139

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

12

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Deferred taxation

Arising from origination and reversal of timing differences

-

7,054,325

On 1 April 2023 there was an increase in the main rate of corporation tax to 25%, with the rate prior to that date being 19%. Consequently there has been an increase in the applicable tax rate to 23.5% (2022 - 19%), being the average rate for the year.

The tax on profit before tax for the period is lower than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 23.5% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Loss before tax

(19,962,568)

(13,131,918)

Corporation tax at standard rate

(4,692,024)

(2,495,064)

Effect of revenues exempt from taxation

-

(13,913)

Effect of expense not deductible in determining taxable profit (tax loss)

2,925,504

39,563

UK deferred tax credit relating to changes in tax rates or laws

(113,085)

(827,781)

Deferred tax expense from unrecognised tax loss or credit

1,915,202

10,515,320

Deferred tax credit from unrecognised temporary difference from a prior period

(25,278)

(11,906)

Tax (decrease)/increase from effect of capital allowances and depreciation

(10,319)

3,624

Other permanent differences

-

1,028

Other tax effects for reconciliation between accounting profit and tax expense (income)

-

(156,546)

Total tax charge

-

7,054,325

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated tax depreciation

-

415,514

Tax losses carry-forwards

415,514

-

415,514

415,514

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

2022

Asset
£

Liability
£

Accelerated tax depreciation

-

976,976

Tax losses carry-forwards

976,976

-

976,976

976,976

The directors do not consider there to be sufficient certainty over future taxable profits to utilise the tax asset in full. As a result of this the company has unrecognised deferred tax assets of £12,430,522 in relation to losses (2022 - £10,515,320).

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

13

Tangible assets

Short leasehold
£

Improvements to property
£

Plant and machinery
 £

Furniture, fittings and equipment
 £

Shop fixtures and fittings
 £

Computer equipment
 £

Total
£

Cost or valuation

At 31 December 2022

7,093,496

234,540

208,588

85,311

2,865,743

4,592,580

15,080,258

Additions

92,596

-

-

21,622

4,004,887

1,643,182

5,762,287

Disposals

-

-

(40,687)

(24,846)

(258,422)

(142,383)

(466,338)

At 31 December 2023

7,186,092

234,540

167,901

82,087

6,612,208

6,093,379

20,376,207

Depreciation

At 31 December 2022

6,016,398

215,349

204,482

79,104

1,282,929

1,139,196

8,937,458

Charge for the period

606,991

19,191

1,902

4,576

1,461,424

1,165,265

3,259,349

Eliminated on disposal

-

-

(40,687)

(24,846)

(181,354)

(135,799)

(382,686)

Impairment

-

-

-

-

1,124,653

-

1,124,653

At 31 December 2023

6,623,389

234,540

165,697

58,834

3,687,652

2,168,662

12,938,774

Carrying amount

At 31 December 2023

562,703

-

2,204

23,253

2,924,556

3,924,717

7,437,433

At 30 December 2022

1,077,098

19,191

4,106

6,207

1,582,814

3,453,384

6,142,800

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

Impairment

Shop fixtures and fittings
The impairment loss recognised on tangible fixed assets in the period was £1,124,653 (2022 - £nil) and is included in administrative expenses in the Profit and Loss Account. It arose as a result of operations being discontinued after the period due to a decision during the period where tangible fixed assets have been written down to their recoverable amount being the higher of their fair value less costs to sell and value in use.

14

Investments

Loans to group undertakings

Total

£

£

Cost

At 31 December 2022

-

-

Reclassification

2,198,005

2,198,005

At 31 December 2023

2,198,005

2,198,005

Provisions for impairment

At 31 December 2022 and 2023

-

-

Carrying amount

At 31 December 2023

2,198,005

2,198,005

At 30 December 2022

-

-

Although amounts owed by group undertakings is repayable on demand it is not expected that the amount will be realised within the next 12 months and as such are held on a continuing basis.

15

Stocks

2023
£

2022
£

Finished goods and goods for resale

63,734,615

63,745,555

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

16

Debtors

2023
£

2022
£

Trade debtors

24,232,281

22,163,824

Amounts owed by group undertakings

-

1,659,524

Other debtors

3,081,727

6,668,700

Prepayments

2,403,713

3,690,052

 

29,717,721

34,182,100

Details of trade and other debtors

£Nil (2022 - £22,450) of prepayments is classified as non current.

Non-current

2023
£

2022
£

Amounts owed by group undertakings

2,198,005

-

Although amounts owed by group undertakings is repayable on demand it is not expected that the amount will be realised within the next 12 months and as such are held on a continuing basis.

17

Cash and cash equivalents

2023
£

2022
£

Cash on hand

-

1,878

Cash at bank

3,226,956

240,062

3,226,956

241,940

18

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

19

59,040,765

57,234,543

Trade creditors

 

29,079,227

39,511,084

Amounts due to group undertakings

24

8,326,813

7,850,389

Social security and other taxes

 

447,247

285,505

Other creditors

 

4,031,746

3,575,664

Accruals

 

7,140,012

6,178,444

Deferred income

 

7,320,362

35,640

 

115,386,172

114,671,269

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

19

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank borrowings

59,040,765

57,234,543

Bank borrowings

The asset-based lending agreement was entered in to on 31 January 2020 and amended and restated on 17 November 2020, 2 February 2021, 17 November 2021, 29 March 2022 and 29 November 2022. This facility was renewed on 30 June 2023 to increase the loan cap to £70m and amended and restated on 27 October 2023. The carrying amount at period end is £59,040,765 (2022 - £57,234.543).

In relation to advances and/or other amounts denominated in GBP, interest of 6% per annum above Bank Base Rate provided that if at any time Bank Base Rate is less than 1%, Bank Base Rate shall be deemed to be 1%;

In relation to advances and/or other amounts denominated in USD, interest of 7% per annum provided that if and for so long as the Screen Rate for US LIBOR is higher than 173bps, the Interest Rate for Advances denominated in USD shall be increased by the number of basis points by which the Screen Rate exceeds 173bps;

In relation to advances and/or other amounts denominated in EUR, interest of 6% per annum above EURIBOR provided that if at any time EURIBOR is less than 1%, EURIBOR shall be deemed to be 1%;

In relation to advances and/or other amounts denominated in AUD, interest of 6% per annum above the BBSW rate provided that if at any time the BBSW rate is less than 1% the BBSW rate shall be deemed to be 1%; or

In relation to an over advance denominated in GBP, interest of 15% per annum or in relation to any amount drawn under the overdraft facility in GBP or USD, 15% per annum.

Multiple financial covenants with respect to this agreement have been breached in the financial year. However, a waiver with respect to these breaches has been obtained post year end.

The facility is due to expire on 30 June 2025 with security held over assets of the company.

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

20

Obligations under leases

Operating leases

The total of future minimum lease payments under non-cancellable operating leases are as follows:

2023
£

2022
£

Not later than one year

148,500

201,789

Later than one year and not later than five years

-

148,500

148,500

350,289

The amount of non-cancellable operating lease payments recognised as an expense during the period was £201,789 (2022 - £234,777).

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

21

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £0.10 each

10,020

1,002

10,009

1,001

         

On 5 January 2023, the company issued 1 Ordinary share of £0.10 at a premium of £2,000,000.

On 1 February 2023, the company issued 1 Ordinary share of £0.10 at a premium of £1,250,000.

On 28 March 2023, the company issued 1 Ordinary share of £0.10 at a premium of £5,000,000.

On 14 April 2023, the company issued 1 Ordinary share of £0.10 at a premium of £750,000.

On 27 April 2023 the company issued 1 Ordinary share of £0.10 at a premium of £750,000.

On 2 May 2023, the company issued 1 Ordinary share of £0.10 at a premium of £1,500,000.

On 21 June 2023, the company issued 1 Ordinary share of £0.10 at a premium of £2,000,000.

On 29 June 2023, the company issued 1 Ordinary share of £0.10 at a premium of £1,600,000.

On 31 July 2023, the company issued 1 Ordinary share of £0.10 at a premium of £1,600,000.

On 29 August 2023, the company issued 1 Ordinary share of £0.10 at a premium of £2,500,000.

On 11 September 2023, the company issued 1 Ordinary share of £0.10 at a premium of £2,300,000.

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

22

Parent and ultimate parent undertaking

The company's immediate parent is Harding Brothers Holdings Limited, incorporated in England and Wales.

The company is ultimately beneficially owned by five charities registered in the Republic of Ireland with no single ultimate controlling party. Walkers Global Shareholding Services Limited hold the shares on trust on behalf of the five Irish charities.

The parent of the largest group in which these financial statements are consolidated is Harding Retail IHC Limited, incorporated in England and Wales.

The address of Harding Retail IHC Limited is:
Avonmouth Way, Avonmouth, Bristol, United Kingdom, BS11 8DD

Harding Retail IHC Limited is the largest and smallest group in which these accounts are consolidated. The consolidated accounts can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
 

23

Employee benefits

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £247,604 (2022 - £186,415).

 

Harding Brothers Retail Limited

Notes to the Financial Statements

Period from 31 December 2022 to 31 December 2023 (continued)

24

Related party transactions


The Company has taken advantage of the exemption, under the terms of FRS 102, not to disclose related party transactions with wholly owned subsidiaries within the Group.

The total remuneration for the key management personnel for the year totalled £982,082 (2022 - £1,156,142). Included in this amount is £179,500 in respect of termination benefits.

A director of the Company is also a director of Harding Bros (Shipping Contractors) Limited, a company incorporated in England and Wales. During the year Harding Brothers Retail Limited rented property from Harding Bros (Shipping Contractors) Limited, at the cost of £217,800 (2022 - £212,857). At the end of the year Harding Brothers Retail Limited owed £Nil (2022 - £Nil). The amounts received from Harding Bros (Shipping Contractors) Limited for sales made during the year was £63,975 (2022 - £58,455). At the end of the year Harding Brothers Retail Limited was owed £80,169 (2022 - £16,194).

A director of the Company is also a director of Admiral Harding Limited, a company incorporated in England and Wales. During the year, Harding Brothers Retail Limited purchased goods and provisions from Admiral Harding Limited at the cost of £26,654 (2022 - £24,916). At the end of the year Harding Brothers Retail Limited owed £3,440 (2022 - £18,199). The income from Admiral Harding Limited for sales made during the year was £369 (2022 - £1,724). At the end of the year Harding Brothers Retail Limited was owed £Nil (2022 - £1,407).

Harding Brothers Retail Limited and Breal Zeta (BZ) Commercial Finance Designated Activity Company entered into a loan facility that is secured against 85% of trade receivables and 85% of inventory as part of the group restructure. BZ is a connected party through common ownership. Under the agreement, BZ agreed to lend to Harding Brothers Retail Limited up to £30m, with the option to increase up to £40m.This facility has been renewed during the year to increase the loan cap to £70m. The outstanding amount at balance sheet date is £59,040,765 (2022 - £57,234,543).