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Celtic Sheepskin & Co Limited

Annual Report and Financial Statements
Period from 30 January 2023 to 28 January 2024

Registration number: 08860746

 

Celtic Sheepskin & Co Limited

Contents

Company Information

1

Strategic Report

2 to 4

Directors' Report

5 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 11

Income Statement

12

Statement of Comprehensive Income

13

Statement of Financial Position

14 to 15

Statement of Changes in Equity

16

Notes to the Financial Statements

17 to 34

 

Celtic Sheepskin & Co Limited

Company Information

Directors

Mrs K A Whitworth

Mr N R Whitworth

Mr H T Bergs

Mr B L M Barnett

Mr J Williams

Mr S G Mackenzie

Ms A Fadeeva

Ms Z Bray

Mr T Sarucan

Registered office

Units 2 & 2a Indian Queens Industrial Estate
Indian Queens
St Columb
Cornwall
TR9 6TF

Auditors

PKF Francis Clark
Statutory Auditor
Unit 18, 23 Melville Building East
Royal William Yard
Plymouth
Devon
PL1 3GW

 

Celtic Sheepskin & Co Limited

Strategic Report for the Period from 30 January 2023 to 28 January 2024

The Directors present their report for the period from 30 January 2023 to 28 January 2024 for Celtic Sheepskin & Co. Limited (the "Company" or "Celtic & Co").

Celtic & Co. are digital pioneers of the ethical fashion movement, passionate about creating high quality investment pieces from sustainable natural fibres, designed to last a lifetime. The brand is situated in Cornwall, offering ethically sourced, sustainable knitwear, footwear, and outerwear and remains firmly committed to its heritage, with the in-house production of sheepskin boots and slippers continuing in its Newquay-based factory.

Fair review of the business

Period ended January 2024

Period ended January 2023

Turnover (£000)

14,900

16,941

Adjusted EBITDA (£000)

1,054

1,062

Adjusted EBITDA margin (%)

7

6

Profit before tax (£000)

1,060

655

Adjusted EBITDA is inclusive of depreciation and interest on the Right of Use Assets and Liabilities respectively, which reflect operating property costs.

The period ended 28 January 2024 saw a reduction in the top line revenue, as the Company focussed on more profitable sales, spending more efficiently on marketing, especially in the international markets, reducing the level of physical catalogue and voucher mailings, which have seen diminishing returns over the last couple of years and investing more into digital marketing via email, Facebook and Google.

We have also been able to further leverage the Company’s overhead base across the Group, with the warehouse, customer service and back office teams (e.g. marketing, finance and HR) at our head office in Indian Queens, Cornwall, forming dual-brand functions with Frugi, our sister brand also operated out of the same premises.

This, in turn, has led to a more profitable business and laid the foundation for future growth.

Building on successful launches in previous years, partner online sales (including Marks & Spencer, John Lewis and Next) grew 14% on the year and continue to be a key area of targeted growth.

Sustainability
Celtic & Co. continued to make good progress with sustainability initiatives, including publishing an annual sustainability report and currently has a pending application for B Corp accreditation.
 

 

Celtic Sheepskin & Co Limited

Strategic Report for the Period from 30 January 2023 to 28 January 2024

Principal risks and uncertainties

Celtic & Co. is a well-established brand, with a growing product range, loyal customer following, and distinct handwriting that has performed well against its peers However, it does remain primarily tailored for colder seasons, which does pose a risk in the event of a mild winter impacting sales. In recent years we have been successfully expanding our spring-summer range to combat this. Furthermore, the Company can also respond quickly to changes in product demand as the overwhelming majority of our range is manufactured in the UK and Europe.

In this competitive market, where the cost of living and high inflation are influencing consumer behaviour, the Directors maintained their focus on preserving and enhancing the brand's ethical and sustainable positioning, along with the differentiator of British manufacturing. We aim to expand our customer base, both through our own websites and via partnerships, both within the UK and internationally.

Financial Risk

Our materials cost base is somewhat exposed to exchange rate fluctuations, in particular, we have some supply in USD and in EUR. As we operate within a wider Group of brands that continue to expand their consumer offering internationally, with a significant element of the revenue from sister brands, Kettlewell Colours and Frugi, earned in USD and EUR respectively, this acts as a natural hedge to offset these exchange rate fluctuations.

The Directors regularly monitor the foreign exchange market and if we ever deemed it necessary, we would look to hedge any specific risks.

Inflation and Interest rate risk:

The high inflation rates experienced over the past couple of years have of course impacted our supply chain, both in relation to supply from the UK and internationally. From a direct cost perspective, this is being managed through careful consideration of our supply base, and how we can work with our partners to ensure any cost increases can work for both parties.

Combined with this we are continuously monitoring our overheads and keep tight control over our fixed cost base to ensure that it is appropriate and flexible to respond.

The company does not have any external debt and hence has little-to-no interest rate risk.

Cash flow risk:

As previously noted, the revenue is weighted towards the autumn and winter months, with production and warehouse/head office functions working all year round. The Group in which Celtic & Co. operate, have non-winter sister brands, Kettlewell Colours and Frugi, which generate cash all year round. Hence if needed, there is cash support available from the Group during the summer months.
 

 

Celtic Sheepskin & Co Limited

Strategic Report for the Period from 30 January 2023 to 28 January 2024

Operational Risk
The principal operational risks are those affecting the integrity and continuity of our supply chain. The supply chain is managed in a transparent and open manner. Regular dialogue with suppliers ensures that the products are created to the high standards which the Company and its customers expect.

IT Risk
As an online retailer, with a strong D2C offering, a significant failure in IT systems could result in the Company being unable to operate effectively. The Company continues to invest in the necessary technology to provide resilience to the risk associated with IT. Data security is extremely important to the Company and security measures are continuously reviewed and tested to mitigate potential breaches.

Internal training on data and IT security is provided to the employees across the Company and spontaneous testing is carried out to warn of possible cyber attacks.

External bodies are engaged to monitor and test our networks to provide expert, objective assessment of our network security.

Employees
The Company is an equal opportunities employer providing employment and development opportunities to suitably skilled people regardless of age, race, religion, colour, gender, marital status, or disability.

During the period, we carried out an employee engagement survey, which showed positive responses and provided senior management with recommendations and actions, which were taken, including enhancement of leave policies and additional employee benefits.

Future Developments
Looking ahead, Celtic & Co.’s strategy remains to focus on the design and manufacture of exceptional clothing and accessories, exclusively made using natural fabrics and materials. In order to support our future growth, we have invested heavily in our warehouse in Indian Queens in Cornwall, with additional capacity gained. We are also investing in the internal design and product teams to aid the elevation of the brand.
 

Approved by the Board on 28 October 2024 and signed on its behalf by:
 

.........................................
Mr J Williams
Director

 

Celtic Sheepskin & Co Limited

Directors' Report for the Period from 30 January 2023 to 28 January 2024

The Directors present their report and the financial statements for the period from 30 January 2023 to 28 January 2024.

Directors' of the Company

The Directors, who held office during the period, were as follows:

Mrs K A Whitworth

Mr N R Whitworth

Mr H T Bergs

Mr L E Harlow (ceased 22 May 2023)

Mr B L M Barnett

Mr J Williams

Mr S G Mackenzie

Ms A Fadeeva (appointed 22 May 2023)

Ms Z Bray

The following Director was appointed after the period end:

Mr T Sarucan (appointed 30 January 2024)

Dividends
The Directors do not recommend the payment of a dividend (2023: £Nil). The profit for the period will be taken to reserves.

Political contributions
The Company made no political donations or incurred no political expenditure during the period (2023: £Nil).

Charitable donations
During the period the Company made no significant charitable donations (2023: £Nil).

Principal activity

The principal activity of the Company is to design, manufacture and create clothing, outerwear, footwear and accessories for women and men from natural fibres and materials. The Company operates across its own website channel and concession partner websites including John Lewis, Next and Marks & Spencer.

Financial instruments

The Company has a normal level of exposure to foreign exchange, credit, liquidity and cash flow interest rate risk that arise from trading activities which are conducted mainly in Sterling. Foreign currency transactions are not currently covered by foreign currency contracts as the board do not deem it necessary to minimise exposure to exchange rate volatility at the current time. There is low exposure to interest rate risk as the Company has no significant borrowings at the current time.

 

Celtic Sheepskin & Co Limited

Directors' Report for the Period from 30 January 2023 to 28 January 2024

Objectives and policies

The Company operations expose it to a variety of financial risks that include the effects of changes in foreign currency exchange rates, liquidity risk and interest rate risk. The Company seeks to limit the adverse effects on the financial performance where possible by monitoring levels of cash holdings, debt finance and related finance costs. The policies are set by the Board of Directors and implemented by the Company’s finance department. Foreign exchange, credit liquidity and interest rate risk are managed at CFO Level.

Price risk, credit risk, liquidity risk and cash flow risk

Price Risk
The Company reviews its prices on a seasonal basis, as well as always exploring cross costing exercises and working closely with suppliers on innovation to mitigate the impact of this. We value our suppliers and work collaboratively on a long-term basis, jointly planning all aspects of production, delivery, and quality control. As the business continues to expand internationally there is a risk of foreign exchange fluctuations with turnover acquired through multiple currencies. However, the Directors have several strategies in place to regularly monitor the foreign exchange market and minimise risk through trading opportunities, and hence are confident that this will not impact on the Company’s success.

Liquidity Risk
Liquidity risk is managed through conscious financial planning and analysis and by forecasting cash flow regularly, monitoring and optimising net working capital, and managing existing credit facilities.

Cash flow Risk
The business monitors the cash flow of the business daily, weekly, and monthly and has strategies in place to ensure adequate future cash flows.

Credit Risk
The credit risk exposure to the Company is managed by the Board which sets out how credit risk is measured, managed, monitored and reported and are implemented by the finance department. The credit risk exposure is mitigated by utilising prompt debtor payment terms and having a continual monitoring of counterparty risk. Cash balances are held with high quality investment grade counterparties.

Going concern

The Directors have reviewed forecasts and budgets considering future trading and are confident of the Company’s ability to continue trading as a going concern for the foreseeable future. The Company has a current and overall net asset base at the period end.

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 auditor is aware of that information. The Directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved by the Board on 28 October 2024 and signed on its behalf by:
 

.........................................
Mr J Williams
Director

 

Celtic Sheepskin & Co 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 period. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 101 'Reduced Disclosure Framework' ('FRS 101'). 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 FRS 101 has 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.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Celtic Sheepskin & Co Limited

Independent Auditor's Report to the Members of Celtic Sheepskin & Co Limited

Opinion

We have audited the financial statements of Celtic Sheepskin & Co Limited (the 'Company') for the period from 30 January 2023 to 28 January 2024, which comprise the Income Statement, Statement of Comprehensive Income, Statement of Financial Position, 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 (United Kingdom Generally Accepted Accounting Practice), including FRS 101 'Reduced Disclosure Framework'.

In our opinion the financial statements:

give a true and fair view of the state of the Company's affairs as at 28 January 2024 and of its profit 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 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 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.

 

Celtic Sheepskin & Co Limited

Independent Auditor's Report to the Members of Celtic Sheepskin & Co Limited

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 on page 7, 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:

 

Celtic Sheepskin & Co Limited

Independent Auditor's Report to the Members of Celtic Sheepskin & Co Limited

We considered those laws and regulations that have a direct impact on the preparation of the financial statements, including, but not limited to the reporting framework (FRS101 and Companies Act 2006) and the relevant tax compliance regulations in the UK.

As part of our planning procedures, we assessed the risk of any non-compliance with laws and regulations on the entity’s ability to continue operating and the risk of material misstatement to the accounts. Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved the following:
• Reviewing legal and professional costs to identify legal costs in respect of non compliance;
• Making enquiries with management whether there have been any known instances, allegations or suspicions of fraud or non-compliance with laws and regulations;
• Review of tax compliance; and
• Reviewing board minutes where available.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to fraudulent financial reporting. Our procedures involved the following;
• Substantive testing of sales occurrence;
• Reviewing nominal journal entries for reasonableness;
• Reviewing significant accounting estimates for bias; and
• Reviewing inventories for evidence of impairment.

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.

 

Celtic Sheepskin & Co Limited

Independent Auditor's Report to the Members of Celtic Sheepskin & Co Limited

......................................
James Barrett (Senior Statutory Auditor)
For and on behalf of PKF Francis Clark, Statutory Auditor

Unit 18, 23 Melville Building East
Royal William Yard
Plymouth
Devon
PL1 3GW

29 October 2024

 

Celtic Sheepskin & Co Limited

Income Statement

Period from 30 January 2023 to 28 January 2024

Note

2024
£

2023
£

Turnover

4

14,900,029

16,941,422

Cost of sales

 

(8,128,096)

(8,790,803)

Gross profit

 

6,771,933

8,150,619

Distribution costs

 

(325,653)

(323,234)

Administrative expenses

 

(5,586,607)

(7,158,673)

Other operating income

5

9,763

36,249

Operating profit

6

869,436

704,961

Interest receivable and similar income

7

225,664

-

Interest payable and similar expenses

8

(35,494)

(49,484)

 

190,170

(49,484)

Profit before tax

 

1,059,606

655,477

Tax on profit

12

(255,091)

(10,317)

Profit for the period

 

804,515

645,160

The above results were derived from continuing operations.

 

Celtic Sheepskin & Co Limited

Statement of Comprehensive Income

Period from 30 January 2023 to 28 January 2024

2024
£

2023
£

Profit for the period

804,515

645,160

Total comprehensive income for the period

804,515

645,160

 

Celtic Sheepskin & Co Limited

Statement of Financial Position

28 January 2024

Note

28 January
2024
£

29 January
2023
£

Assets

Non-current assets

 

Property, plant and equipment

14

525,268

593,910

Right of use assets

15

1,308,314

1,507,011

Intangible assets

13

55,515

12,467

Trade and other receivables

17

2,133,554

2,825,742

 

4,022,651

4,939,130

Current assets

 

Inventories

16

2,972,605

2,878,292

Trade and other receivables

17

1,542,170

1,557,272

Income tax asset

 

-

109,609

Cash and cash equivalents

1,503,902

378,566

 

6,018,677

4,923,739

Total assets

 

10,041,328

9,862,869

Equity and liabilities

Equity

 

Called up share capital

19

300,100

300,100

Retained earnings

 

5,897,684

5,093,169

 

6,197,784

5,393,269

Non-current liabilities

 

Long term lease liabilities

20

1,172,990

1,365,638

Deferred income

 

3,805

4,425

Deferred tax liabilities

12

55,352

78,097

 

1,232,147

1,448,160

Current liabilities

 

Current portion of long term lease liabilities

20

192,647

187,650

Trade and other payables

18

2,349,182

2,833,069

Income tax liability

 

68,227

-

Deferred income

 

1,341

721

 

2,611,397

3,021,440

Total liabilities

 

3,843,544

4,469,600

Total equity and liabilities

 

10,041,328

9,862,869

 

Celtic Sheepskin & Co Limited

Statement of Financial Position

28 January 2024

Approved by the Board and authorised for use on 28 October 2024 and signed on its behalf by:

.........................................

Mr J Williams

Director

Company registration number: 08860746

 

Celtic Sheepskin & Co Limited

Statement of Changes in Equity

Period from 30 January 2023 to 28 January 2024

Share capital
£

Retained earnings
£

Total
£

At 30 January 2023

300,100

5,093,169

5,393,269

Profit for the period

-

804,515

804,515

Total comprehensive income

-

804,515

804,515

At 28 January 2024

300,100

5,897,684

6,197,784

Share capital
£

Retained earnings
£

Total
£

At 1 February 2022

300,100

4,448,009

4,748,109

Profit for the period

-

645,160

645,160

Total comprehensive income

-

645,160

645,160

At 29 January 2023

300,100

5,093,169

5,393,269

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

1

General information

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

The address of its registered office is:
Units 2 & 2a Indian Queens Industrial Estate
Indian Queens
St Columb
Cornwall
TR9 6TF

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 periods presented, unless otherwise stated.

Basis of preparation

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework.

Summary of disclosure exemptions
The Company has taken advantage of the following disclosure exemptions:
(1) Cash flow statement
(2) Key management personnel remuneration
(3) Transactions with Parent Company and wholly owned subsidiaries
(4) Applicable financial instrument and fair value disclosure
(5) Impact of new IFRS standards that have been issued but are not yet effective.

Going concern

The financial statements have been prepared on a going concern basis. The Directors have carefully considered the Company’s financial position, liquidity and future cash-flow requirements. Accordingly based on the forecasts the Directors have prepared for the Company and Group, they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and they believe it is appropriate to apply the going concern basis of accounting in preparing the financial statements. The Group remain profitable as a whole and there has been reassurances received from the Director's of the Group companies that support would be forthcoming if needed by the Company.

Changes in accounting policy

None of the standards, interpretations and amendments effective for the first time from 30 January 2023 have had a material effect on the financial statements.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

Revenue is recognised at point of dispatch for sale of goods. There are no contracts whose performance obligations are satisfied over time. Contracts with customers do not contain a financing component or any element of variable consideration. The Company does not offer an option to purchase a warranty.

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 rates prevailing on the initial transaction dates. Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred 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 income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Property, plant and equipment

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

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

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

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

Leasehold land and buildings

14% straight line

Furniture, fittings and equipment

50% straight line

Motor vehicles

25% reducing balance

Other property, plant and equipment

15% reducing balance

Intangible assets

Positive goodwill is capitalised, classified as an asset on the balance sheet and reviewed for impairment at the end of each financial period following the acquisition.

Website development costs are stated in the balance sheet at cost, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their expected useful economic life as follows:

Asset class

Amortisation method and rate

Goodwill

Annual review for impairment

Website development costs

50% straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Trade receivables

Trade receivables are amounts due from customers for merchandise sold in the ordinary course of business. If collection is expected in one period or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables.

Inventories

Stock and work in progress are valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period in which the write-down or loss occurs.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material.

Related parties
For the purposes of these financial statements, a related party could be a person or an entity. Careful consideration is given to the definition of a related party to ensure that all related party relationships, transactions and balances are identified.

Leases

At inception of the contract, the Company assesses whether a contract is, or contains, a lease. It recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee. The right-of-use assets and the lease liabilities are presented as separate line items in the statement of financial position.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. It is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, plus lease payments made on or before the commencement day, less any lease incentives received and plus any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

The Company operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account in the period in which they become payable in accordance with the rules of the scheme.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Financial instruments

Initial recognition

Financial assets and financial liabilities comprise all assets and liabilities reflected in the statement of financial position, although excluding property, plant and equipment, investment properties, intangible assets, deferred tax assets, prepayments, deferred tax liabilities and employee benefits plan.

The Company recognises financial assets and financial liabilities in the statement of financial position when, and only when, the Company becomes party to the contractual provisions of the financial instrument.

Financial assets are initially recognised at fair value. Financial liabilities are initially recognised at fair value, representing the proceeds received net of premiums, discounts and transaction costs that are directly attributable to the financial liability.

Subsequent to initial measurement, financial assets and financial liabilities are measured at either amortised cost or fair value.

Derecognition

Financial assets

The Company derecognises a financial asset when;
- the contractual rights to the cash flows from the financial asset expire,
- it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred; or
- the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

On derecognition of a financial asset, the difference between the carrying amount of the asset and the sum of the consideration received is recognised as a gain or loss in the profit or loss.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire.

Accounting estimates and assumptions

Fair value of financial assets and liabilities

Where the fair value of financial assets and liabilities cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is derived from observable markets where available, but where this is not feasible, a degree of judgement is required in determining assumptions used in the models. Changes in assumptions used in the models could affect the reported fair value of financial assets and liabilities.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

3

Critical accounting judgements and key sources of estimation uncertainty

Sales return provision
The Company recognises a provision for estimated sales returns as at the period end. This is informed by the historic pattern of returns and the actual returns received between the balance sheet date and the date of approval of the financial statements. The carrying value of the provision at period end is £141,040 (2023 - £331,911).

Stock provision
The Directors judge whether any impairment is required of the period end inventories balance on a line by line basis. This is informed by both historical sales and actual sales between the balance sheet date and the date of approval of the financial statements. The carrying value of the provision at period end is £103,075 (2023 - £106,762).

Right of use asset and liability
The lease liability and right of use asset is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The discount rate is a key accounting estimate due to the fact that a small difference in the discount rate used will have a significant impact on the present value of the lease liability and right of use asset initially recognised and the subsequent finance charges.

4

Turnover

The analysis of the Company's turnover for the period from continuing operations is as follows:

2024
£

2023
£

Sale of goods

14,900,029

16,941,422

The analysis of the Company's turnover for the period by market is as follows:

2024
£

2023
£

UK

11,260,980

11,628,778

Europe

743,987

971,548

Rest of world

2,895,062

4,341,096

14,900,029

16,941,422

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

5

Other operating income

The analysis of the Company's other operating income for the period is as follows:

2024
£

2023
£

Other grants

6,825

989

Sub lease rental income

2,938

35,260

9,763

36,249

6

Operating profit

Arrived at after charging/(crediting)

2024
£

2023
£

Depreciation expense

139,099

129,588

Depreciation on right of use assets - property

198,697

200,908

Amortisation expense

17,463

12,436

Foreign exchange losses

2,947

14,404

7

Interest receivable and similar income

2024
£

2023
£

Other finance income

225,664

-

8

Interest payable and similar expenses

2024
£

2023
£

Interest on bank overdrafts and borrowings

145

9,267

Interest on right of use liabilities

35,349

40,217

35,494

49,484

9

Staff costs

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

2024
£

2023
£

Wages and salaries

1,756,383

1,984,158

Social security costs

163,746

192,218

Pension costs, defined contribution scheme

47,518

48,040

1,967,647

2,224,416

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

The average number of persons employed by the Company (including Directors) during the period, analysed by category was as follows:

2024
No.

2023
No.

Product and sourcing

18

29

Administration and support

24

19

Sales

12

14

Marketing

14

13

Distribution

18

19

86

94

10

Directors' remuneration

The Directors' remuneration for the period was as follows:

2024
£

2023
£

Remuneration

295,186

229,111

Contributions paid to money purchase schemes

15,436

3,619

310,622

232,730

During the period the number of Directors who were receiving benefits and share incentives was as follows:

2024
No.

2023
No.

Received or were entitled to receive shares under long term incentive schemes

2

-

Accruing benefits under money purchase pension scheme

4

4

In respect of the highest paid Director:

2024
£

2023
£

Remuneration

132,943

115,271

Company contributions to money purchase pension schemes

11,343

1,321

During the period the highest paid Director received or was entitled to receive shares under a long term incentive scheme.

11

Auditors' remuneration

2024
£

2023
£

Audit of the financial statements

15,330

13,390

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024


 

12

Income tax

Tax charged/(credited) in the statement of profit or loss

2024
£

2023
£

Current taxation

UK corporation tax

277,836

-

Deferred taxation

Arising from origination and reversal of temporary differences

(22,745)

10,317

Tax expense in the statement of profit or loss

255,091

10,317

The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of 23.99% (2023 - 19%).

The differences are reconciled below:

2024
£

2023
£

Profit before tax

1,059,606

655,477

Corporation tax at standard rate

254,247

124,541

Increase from effect of expenses not deductible in determining taxable profit/(tax loss)

1,846

3,287

Decrease arising from Group relief tax reconciliation

-

(114,111)

Deferred tax (credit)/expense relating to changes in tax rates or laws

(920)

2,476

Increase from effect of tax incentives

-

(5,876)

Other tax effects for reconciliation between accounting profit and tax income

(82)

-

Total tax charge

255,091

10,317

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Deferred tax

Deferred tax assets and liabilities

2024

Asset
£

Liability
£

Net deferred tax
£

Accelerated tax depreciation

-

59,089

59,089

Provisions

(3,737)

-

(3,737)

(3,737)

59,089

55,352

2023

Asset
£

Liability
£

Net deferred tax
£

Accelerated tax depreciation

-

79,258

79,258

Provisions

(1,161)

-

(1,161)

(1,161)

79,258

78,097

Deferred tax movement during the period:

At 30 January 2023
£

Recognised as expense
£

At
28 January 2024
£

Accelerated tax depreciation

79,258

(20,169)

59,089

Provisions

(1,161)

(2,576)

(3,737)

78,097

(22,745)

55,352

Deferred tax movement during the prior period:

At 1 February 2022
£

Recognised as expense
£

At
29 January 2023
£

Accelerated tax depreciation

68,819

10,439

79,258

Provisions

(1,039)

(122)

(1,161)

67,780

10,317

78,097

An increase in the long-term UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. In the prior period deferred tax balances have been remeasured to reflect this higher long-term rate, with differences recognised in the current period tax charge.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

13

Intangible assets

Goodwill
£

Website development costs
£

Total
£

Cost or valuation

At 1 February 2022

51,542

135,898

187,440

Additions

-

7,787

7,787

At 29 January 2023

51,542

143,685

195,227

At 30 January 2023

51,542

143,685

195,227

Additions

-

60,511

60,511

At 28 January 2024

51,542

204,196

255,738

Amortisation

At 1 February 2022

51,542

118,782

170,324

Amortisation charge

-

12,436

12,436

At 29 January 2023

51,542

131,218

182,760

At 30 January 2023

51,542

131,218

182,760

Amortisation charge

-

17,463

17,463

At 28 January 2024

51,542

148,681

200,223

Carrying amount

At 28 January 2024

-

55,515

55,515

At 29 January 2023

-

12,467

12,467

At 1 February 2022

-

17,116

17,116

Amortisation expense is included in administrative expenses.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

14

Property, plant and equipment

Leasehold land and buildings
£

Furniture, fittings and equipment
£

Motor vehicles
£

Other property, plant and equipment
£

Total
£

Cost or valuation

At 1 February 2022

243,563

209,549

14,495

163,970

631,577

Additions

41,394

73,985

-

259,468

374,847

At 29 January 2023

284,957

283,534

14,495

423,438

1,006,424

At 30 January 2023

284,957

283,534

14,495

423,438

1,006,424

Additions

15,384

37,169

-

17,904

70,457

At 28 January 2024

300,341

320,703

14,495

441,342

1,076,881

Depreciation

At 1 February 2022

65,616

166,402

2,502

48,406

282,926

Charge for period

30,784

51,175

2,676

44,953

129,588

At 29 January 2023

96,400

217,577

5,178

93,359

412,514

At 30 January 2023

96,400

217,577

5,178

93,359

412,514

Charge for the period

35,846

53,648

2,081

47,524

139,099

At 28 January 2024

132,246

271,225

7,259

140,883

551,613

Carrying amount

At 28 January 2024

168,095

49,478

7,236

300,459

525,268

At 29 January 2023

188,557

65,957

9,317

330,079

593,910

At 1 February 2022

177,947

43,147

11,993

115,564

348,651

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

15

Right of use assets

Property
£

Total
£

Cost or valuation

At 1 February 2022

2,035,861

2,035,861

Disposals

(48,896)

(48,896)

At 29 January 2023

1,986,965

1,986,965

At 30 January 2023

1,986,965

1,986,965

At 28 January 2024

1,986,965

1,986,965

Depreciation

At 1 February 2022

327,942

327,942

Charge for period

200,908

200,908

Eliminated on disposal

(48,896)

(48,896)

At 29 January 2023

479,954

479,954

At 30 January 2023

479,954

479,954

Charge for the period

198,697

198,697

At 28 January 2024

678,651

678,651

Carrying amount

At 28 January 2024

1,308,314

1,308,314

At 29 January 2023

1,507,011

1,507,011

16

Inventories

28 January
2024
£

29 January
2023
£

Raw materials and consumables

374,659

341,402

Work in progress

134,934

68,158

Finished goods and goods for resale

2,463,012

2,468,732

2,972,605

2,878,292

The cost of inventories recognised as an expense in the period amounted to £5,179,037 (2023 - £5,218,295). This is included within cost of sales.

The inventories provision in period decreased to £103,075 (2023 - £106,762).

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

17

Trade and other receivables

Trade and other receivables falling due within one year

28 January
2024
£

29 January
2023
£

Trade receivables

209,562

151,113

Receivables from related parties

1,238,928

1,149,482

Prepayments

93,002

246,045

Other receivables

678

10,632

1,542,170

1,557,272

The majority of customers pay for goods in advance. The average credit period on sale of goods to trade customers is 30 days. No interest is charged on outstanding trade receivables. The Company does not hold any collateral. The carrying amount of trade and other receivables approximates the fair value.

The Company recognises a credit loss provision for receivables on a case by case basis. At 28 January 2024 trade receivables of £Nil (2023 - £Nil) were determined to be impaired. At period end 96% (2023 - 99%) of the trade receivables balance was due in less than 30 days.

Trade and other receivables falling due after more than one year

28 January
2024
£

29 January
2023
£

Loans to related parties

2,133,554

2,825,742

The loans to related parties is due for final repayment on 12/09/2032 and 30/11/2032 with interest rate charged on the loan of 6%.

18

Trade and other payables

28 January
2024
£

29 January
2023
£

Trade payables

1,236,319

1,117,197

Amounts due to related parties

-

5,065

Social security and other taxes

756,662

1,064,610

Outstanding defined contribution pension costs

27,353

9,860

Other payables

160,836

366,822

Accrued expenses

168,012

269,515

2,349,182

2,833,069

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Trade payables and accruals comprise amounts outstanding for trade purchases and ongoing costs. The average credit period for trade purchases is 30-60 days. No interest is charged on overdue amounts.

The carrying amount of the trade and other payables approximates the fair value.

The Company's overdraft facility is secured by a fixed and floating charge over all the assets of the Company. The assets of the Company are also secured by a charge provided to the holder of loan
notes, Kvika Banki HF, in the ultimate Parent Company, Refined Brands Limited.

19

Share capital

Allotted, called up and fully paid shares

 

28 January
2024

29 January
2023

 

No.

£

No.

£

Ordinary shares of £1 each

300,100

300,100

300,100

300,100

         

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company's residual assets.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

20

Leases

Lease liabilities maturity analysis

A maturity analysis of lease liabilities based on undiscounted gross cash flow is reported in the table below:

28 January
2024
£

29 January
2023
£

Less than one year

223,000

223,000

2 years

223,000

223,000

3 years

223,000

223,000

4 years

223,000

223,000

5 years

223,000

223,000

6 years

223,000

223,000

7 years

130,000

223,000

8 years

-

130,000

Total lease liabilities (undiscounted)

1,468,000

1,691,000

Total cash outflows related to leases

Total cash outflows related to leases are presented in the table below:

Payment

28 January
2024
£

29 January
2023
£

Interest

102,363

137,712

Current lease liability

192,647

187,650

Non-current lease liability

1,172,990

1,365,638

Total cash outflow

1,468,000

1,691,000

21

Pension and other schemes

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 £47,518 (2023 - £48,041).

Contributions totalling £27,353 (2023 - £9,860) were payable to the scheme at the end of the period and are included in payables.

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

22

Related party transactions

The Company has taken advantage of the exemption in FRS101 "Related Party Disclosures" from disclosing transactions with other wholly owned members of the Group.

Key management personnel
The Company has taken the disclosure exemption in FRS101 for key management personnel remuneration.

Transactions with Directors

Loans, transactions and guarantees with Directors

2024

At 30 January 2023
£

Advances to Directors
£

Repayments by Director
£

At 28 January 2024
£

Director 1

Directors' loan balance

383

(409)

26

-

         

.

       

 

2023

At 1 February 2022
£

Advances to Directors
£

Repayments by Director
£

At 29 January 2023
£

Director 1

Directors' loan balance

310

(440)

513

383

         

.

       

 

Celtic Sheepskin & Co Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Summary of transactions with other related parties
Purchases from companies under control of some of the Board of Directors.

Expenditure with and payables to related parties

2024

No transactions.

2023

Other related parties
£

Receipt of services

2,306

23

Parent and ultimate parent undertaking

Relationship between entity and parents

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

The address of Refined Brands Limited is:
Units 2 & 2a Indian Queens Industrial Estate, Indian Queens, St. Columb, England, TR9 6TF

A copy of the accounts of Refined Brands Limited is available on request from the registered address.

24

Application of new and revised International Financial Reporting Standards

New and amended Standards and Interpretations applied
The following new and amended Standards and Interpretations have been issued and are effective for the current financial period of the Company. The following changes were in effect from 1 January 2023:

• Disclosure of Accounting policies (Amendments to IAS 1 and IFRS Practice Statement 2)
• Definition of Accounting Estimates (Amendments to IAS 8)
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
• International Tax Reform-Pillar Two Model Rules (Amendments to IAS 12)
• IFRS 17 Insurance Contracts

There are no other relevant standards or amendments issued that are first effective for the annual period beginning 29 January 2023.