Refined Brands Limited 13175575 false 2023-01-30 2024-01-28 2024-01-28 The principal activity of the company is is a UK-based holding Company engaged in the investment and management activities of a prominent, digitally native, portfolio of ethically sourced, natural and sustainable British brands. The Group’s operating entities and brands include Frugi Limited (“Frugi”), Celtic & Co. Sheepskin Limited (“Celtic & Co.”), Turtle Doves (Not Just Gloves) Limited (“Turtle Doves”) and Kettlewell Colours Limited (“Kettlewell Colours”). In addition to the main four brands, the Group also operated the Morlands of Glastonbury brand (via Frugi Limited), inherited through the acquisition of Celtic & Co., which was being wound down throughout the financial period and ceased trading in March 2024. The brands design and manufacture clothing, outerwear, footwear and accessories for women, men and children, principally from natural fibres and materials. The Group operates its own website channels and across selected concession partner websites including John Lewis, Next and Marks & Spencer, as well as through wholesale channels. Each of the brands has a distinct brand image, with a focus on quality, ethical and sustainable manufacture and/or sourcing throughout. Frugi is the leading organic and ethically focused childrenswear brand in the UK. Known for vibrant prints, fun appliqués and clever clothes, Frugi’s designs focus on durability for everyday adventures, offering products to customers worldwide through online retail in 30 countries. Key products include garments made from organic cotton and outerwear from recycled plastics. 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. Turtle Doves is a British zero-waste ethos design and manufacturing Company, specialising in using post-consumer textile waste to create beautiful new garments and accessories. The entire range is proudly manufactured in the United Kingdom from upcycled cashmere and reclaimed woollen materials. The Turtle Doves manufacturing, warehouse and head office operations were relocated from their previous base in Shrewsbury, to the Group’s premises in Newquay (manufacturing) and Indian Queens (warehouse and head office) in Cornwall, after the financial period end, over the period from March to August 2024. Kettlewell Colours is a one-stop shop for people who love to wear colour with over 300 joyful shades, each one colour-coded to help best suit their customers. The brand offers colour analysis and styling, enabling customers to feel good and empowered in what they wear. This is supported by the design and retail of quality garments that last, ensuring customers want to and are able to, wear their clothes time and time again, with the brand having a “£1 per wear” ethos. 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Refined Brands Limited

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

Registration number: 13175575

 

Refined Brands Limited

Contents

Strategic Report

1 to 5

Directors' Report

6 to 7

Statement of Directors' Responsibilities

8

Independent Auditor's Report

9 to 12

Consolidated Income Statement

13

Consolidated Statement of Comprehensive Income

14

Consolidated Statement of Financial Position

15 to 16

Statement of Financial Position

17 to 18

Consolidated Statement of Changes in Equity

19

Statement of Changes in Equity

20

Consolidated Statement of Cash Flows

21

Statement of Cash Flows

22

Notes to the Financial Statements

23 to 52

 

Refined Brands Limited

Strategic Report

Period from 30 January 2023 to 28 January 2024

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

Principal activity

The principal activity of the Group is a UK-based holding Company engaged in the investment and management activities of a prominent, digitally native, portfolio of ethically sourced, natural and sustainable British brands. The Group’s operating entities and brands include Frugi Limited (“Frugi”), Celtic & Co. Sheepskin Limited (“Celtic & Co.”), Turtle Doves (Not Just Gloves) Limited (“Turtle Doves”) and Kettlewell Colours Limited (“Kettlewell Colours”). In addition to the main four brands, the Group also operated the Morlands of Glastonbury brand (via Frugi Limited), inherited through the acquisition of Celtic & Co., which was being wound down throughout the financial period and ceased trading in March 2024.

The brands design and manufacture clothing, outerwear, footwear and accessories for women, men and children, principally from natural fibres and materials. The Group operates its own website channels and across selected concession partner websites including John Lewis, Next and Marks & Spencer, as well as through wholesale channels.

Each of the brands has a distinct brand image, with a focus on quality, ethical and sustainable manufacture and/or sourcing throughout.

Frugi is the leading organic and ethically focused childrenswear brand in the UK. Known for vibrant prints, fun appliqués and clever clothes, Frugi’s designs focus on durability for everyday adventures, offering products to customers worldwide through online retail in 30 countries. Key products include garments made from organic cotton and outerwear from recycled plastics.

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.

Turtle Doves is a British zero-waste ethos design and manufacturing Company, specialising in using post-consumer textile waste to create beautiful new garments and accessories. The entire range is proudly manufactured in the United Kingdom from upcycled cashmere and reclaimed woollen materials. The Turtle Doves manufacturing, warehouse and head office operations were relocated from their previous base in Shrewsbury, to the Group’s premises in Newquay (manufacturing) and Indian Queens (warehouse and head office) in Cornwall, after the financial period end, over the period from March to August 2024.

Kettlewell Colours is a one-stop shop for people who love to wear colour with over 300 joyful shades, each one colour-coded to help best suit their customers. The brand offers colour analysis and styling, enabling customers to feel good and empowered in what they wear. This is supported by the design and retail of quality garments that last, ensuring customers want to and are able to, wear their clothes time and time again, with the brand having a “£1 per wear” ethos.

 

Refined Brands Limited

Strategic Report

Period from 30 January 2023 to 28 January 2024

Consolidated results and KPIs for the Group:
The Group's key financial and other performance indicators during the period were as follows:

 

Unit

2024

2023

Number of brands in Group

No

5

5

Turnover

£000

37,089

22,370

Growth in turnover

%

66

21

Adjusted EBITDA (adjusted for transaction costs)

£000

3,881

1,625

Adjusted EBITDA margin

%

10

7

Profit/(loss) before tax

£000

2,349

(159)

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

Included in the consolidated Group accounts for the period ending January 2024 are full period results for all brands, whereas the period ending January 2023 includes the results of Celtic & Co. for the full period but Frugi for 2 months, Kettlewell Colours for 2.5 months and Turtle Doves for 4.5 months.

As well as the KPIs above, the business monitors, stockholding, outstanding orders, returns rates, customer acquisition, marketing spend efficiency and overheads to assess the performance of the business. The business monitors these on a daily, weekly, monthly, and seasonal basis.

Fair review of the business

Following the evolution of the Group in the financial period ended January 2023, where three additional brands – Turtle Doves, Kettlewell Colours, and the trade and assets of Frugi – were acquired within the space of three months, the period ended January 2024 saw a period of consolidation, and in some aspects, normalisation of the businesses, as the effect of the boom in online shopping from the COVID-19 pandemic subsided.

The challenging macroeconomic environment continued throughout the period, with the impact of the cost-of-living crisis impacting consumer confidence, along with an unseasonably warm autumn impacting the Group’s winter-biased brands, Celtic & Co. and Turtle Doves.

A strategic approach to reducing customer acquisition spend, especially moving away from traditional offline marketing methods, such as catalogue and mailing vouchers, more towards email and online marketing e.g. through Meta and Google, resulted in a more efficient approach. The Group’s overall marketing-to-sales spend in the period ended January 2024 was 23.1%, a reduction from 31.6% in the period ended January 2023.

A fundamental element of our strategy lies in our ability to build cross-brand marketing within the Group, establishing our Refined Rewards programme during the period ended January 2024. This allows our consumers that shop our brands to benefit from offerings and rewards when shopping cross-brand.

 

Refined Brands Limited

Strategic Report

Period from 30 January 2023 to 28 January 2024

During the period ended January 2024 we continued our successful partnerships with third-party online channels, including John Lewis, Next and Marks & Spencer, with revenue increasing in this channel to £3,419,225, from £2,066,902 in the period ended January 2023 (+65%).

The Group ended the financial period with a strong brand portfolio and an increasing online presence (both direct and through third parties), led by an increasingly established senior team.

We cautiously recognise the uncertainty in economic conditions but remain confident in our outlook and the opportunity for synergies to be realised across our Group of brands.

Post the financial period ended January 2024, the Group re-located the Turtle Doves brand (production, warehousing and head office operations) from Shrewsbury to the Refined Brands headquarters in Cornwall.

Sustainability
The brands we have acquired and integrated into our Group have played a pivotal role in advancing our sustainability initiatives.

Turtle Doves creates beautiful accessories from 100% post-consumer waste manufactured solely in the United Kingdom.

Frugi has established itself as the UK’s leading ethical organic cotton childrenswear brand and in March 2024 was awarded with the Best Circularity Initiative at the Drapers Sustainable Fashion Awards, for pioneering the world’s first certified childrenswear collection with the Circular Textiles Foundation. Frugi is currently in the process of applying for B Corp accreditation.

Aligned with these brands, the Group continues to make good progress at Celtic & Co. including publishing an annual sustainability report and currently has a pending application for B Corp accreditation.
 

Principal Risks and uncertainties
Among the brands within the Group, Turtle Doves and Celtic & Co. are primarily tailored for colder seasons, which does pose a risk in the event of a mild winter impacting sales. Nevertheless, the Group’s strategic move to introduce a spring-summer range at Celtic & Co. along with the inclusion of Kettlewell Colours and Frugi, both of which cater to year-round demand, serves to enhance the Group’s resilience and diversify its offerings.

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 brands' 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. In addition, the Group continues to diversify by introducing the brands to new customers via third-party concessions online. These partnerships and additional routes to market help raise brand awareness as well as assisting in introducing the brands to new customers.
 

 

Refined Brands Limited

Strategic Report

Period from 30 January 2023 to 28 January 2024

Financial Risk
Foreign exchange risk:
Our materials cost base is somewhat exposed to exchange rate fluctuations, in particular, we have supply into Frugi and Celtic & Co. in USD and into Kettlewell in EUR. As all the brands continue to expand their consumer offering internationally, with a significant element of the Kettlewell revenue earned in USD and Frugi revenue earned in EUR, 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 Group has historically raised funds through equity predominantly and this reduces the risk of interest rates on borrowings. Our balance sheet debt comprises a balance of variable and fixed rate instruments, with our overall exposure to interest rate fluctuation considered low.

The one variable-rate debt instrument we have (linked with the Bank of England base rate), has not had any negative variance post-Balance Sheet date and it is widely expected that the base rate will hold or decrease over the near-to-mid-term. As the debt is due to be fully repaid by November 2025, the exposure to any significant interest rate risk over the life left on the term, is deemed low.

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. As noted previously in this report, we have taken steps to reduce our overheads base by relocating the Turtle Doves brand to our Group headquarters in Cornwall.
 

Cash flow risk:
The combined Group revenue is currently weighted towards the winter months, with production taking place all year round. Cash flow projections are carefully monitored, and we ensure that sufficient facility headroom is in place to draw down on if and when required to fund production over the summer months.

 

Refined Brands Limited

Strategic Report

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 Group 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 Group 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 Group 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 total number of employees across the Group at the end of the financial period was 250 (or 216 FTE) a reduction in headcount from the prior period’s 271 but stable on an FTE basis.

The Group 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
The Directors, board and senior team believe prospects for the Group to be promising with further potential to be realised from Group growth and cost synergies, the development of cross-brand marketing, the launch on further third-party online channels and international expansion. Over time the Group has developed internal digital talent allowing for much of the previous agency-related operations to be taken in-house and scaled across the portfolio of brands.

Further growth will be achieved across the brands by broadening the ranges sold, developing existing selling channels with investment in digital customer retention and acquisition, and partnering with further selected third-party digital retailers, both in the UK and internationally.

The Group is also set up for further acquisitive growth, with the infrastructure, team and digital platforms in place to add further brands as and when the opportunities arise.
 

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

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

 

Refined Brands Limited

Directors' Report

Period from 30 January 2023 to 28 January 2024

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

Directors of the Group

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

Mr S G Mackenzie

Mr H T Bergs

Mr N R Whitworth

Mrs K A Whitworth

Mr B L M Barnett

Mr J Williams

Mr G R Holbrook (resigned 9 April 2024)

Ms A Fadeeva (appointed 22 May 2023)

Ms M J Nicholson

Mr L E Harlow (resigned 22 May 2023)

The following Director was appointed after the period end:

Mr T Sarucan (appointed 30 January 2024)

Dividends

Interim dividends paid during the period of Nil in respect of the period ended 28 Jan 2024 (2023: Nil). The Directors do not recommend the payment of a final dividend for the period.

Political Contributions

The Group made no political donations or incurred any political expenditure during the period (2023: Nil).

Financial Risk Management Objectives and Policies
The Group's 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 Group 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 Group’s finance departments. Foreign exchange, credit liquidity and interest rate risk are managed at CFO Level.

Price Risk

Refined Brands Limited review their 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 the Group’s success.

 

Refined Brands Limited

Directors' Report

Period from 30 January 2023 to 28 January 2024

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.

Going concern

Whilst the Group saw an impact on trading due to market and macro-economic factors there was growth in the concession partner channels. The Directors have reviewed forecasts and budgets considering the above and are confident of the Group’s ability to continue trading as a going concern for the foreseeable future.

The Group has a positive current and net asset base, as well as a large cash balance held at the period end.

Purchase of own shares

During the period the Company purchased 1,634 of its own Ordinary E shares with a nominal value of £1,634. The Ordinary E shares were purchased for a consideration of £5,470 and represent 7% of the called up share capital of that class of share. The transaction was made to repurchase shares held by former employees. The maximum percentage of called up shares of that class held in the period is 7%.

The maximum number of its own shares held by the Company during the period was 1,634 having a maximum aggregate nominal value of £1,634.

Disclosure of information to the auditor

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 Group'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

 

Refined Brands 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 UK adopted international accounting standards. 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 International Financial Reporting Standards (IFRSs) as adopted by the UK 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 Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Group and 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.

 

Refined Brands Limited

Independent Auditor's Report to the Members of Refined Brands Limited

Opinion

We have audited the financial statements of Refined Brands Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the period from 30 January 2023 to 28 January 2024, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, Statement of Cash Flows, 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion the financial statements:

give a true and fair view of the state of the Group's and the Parent Company's affairs as at 28 January 2024 and of the Group's profit for the period then ended;

have been properly prepared in accordance with IFRS as adopted by the UK; 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 Group 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 Group or Parent 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.

 

Refined Brands Limited

Independent Auditor's Report to the Members of Refined Brands Limited

We have nothing to report in this regard.

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 Group and the Parent 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

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

certain disclosures of Directors’ remuneration specified by law are not made; or

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

Responsibilities of Directors

As explained more fully in the Statement of Directors' Responsibilities, set out on page 8, 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 Group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 

 

Refined Brands Limited

Independent Auditor's Report to the Members of Refined Brands 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 (IFRS 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 Group’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.

 

Refined Brands Limited

Independent Auditor's Report to the Members of Refined Brands 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

 

Refined Brands Limited

Consolidated Income Statement

Period from 30 January 2023 to 28 January 2024

Note

2024
£

2023
£

Revenue

4

37,089,057

22,369,993

Cost of sales

 

(17,547,533)

(12,236,336)

Gross profit

 

19,541,524

10,133,657

Distribution costs

 

(1,975,271)

(763,251)

Administrative expenses

 

(14,641,958)

(8,514,516)

Other operating income

5

9,763

36,249

Acquisition costs

 

-

(665,296)

Operating profit

6

2,934,058

226,843

Finance income

7

3,491

3,206

Finance costs

 

(588,586)

(389,399)

Net finance cost

7

(585,095)

(386,193)

Profit/(loss) before tax

 

2,348,963

(159,350)

Income tax expense

11

(531,345)

(62,962)

Profit/(loss) for the period

 

1,817,618

(222,312)

Profit attributable to:

 

Owners of the Company

 

1,817,618

(222,312)

The above results were derived from continuing operations.

 

Refined Brands Limited

Consolidated Statement of Comprehensive Income

Period from 30 January 2023 to 28 January 2024

2024
£

2023
£

Profit/(loss) for the period

1,817,618

(222,312)

Total comprehensive income for the period

1,817,618

(222,312)

Total comprehensive income attributable to:

Owners of the Company

1,817,618

(222,312)

 

Refined Brands Limited

Consolidated Statement of Financial Position as at 28 January 2024

Note

28 January
2024
£

29 January
2023
£

Assets

Non-current assets

 

Property, plant and equipment

12

867,023

845,929

Right of use assets

13

1,463,284

1,741,434

Intangible assets

14

12,599,226

12,610,434

 

14,929,533

15,197,797

Current assets

 

Inventories

17

7,038,683

6,568,549

Trade and other receivables

18

1,786,442

887,656

Income tax asset

 

-

109,669

Cash and cash equivalents

19

4,925,720

3,791,022

Other current financial assets

16

677,275

677,275

 

14,428,120

12,034,171

Total assets

 

29,357,653

27,231,968

Equity and liabilities

Equity

 

Share capital

20

(6,560,519)

(6,547,356)

Share premium

 

(5,214,661)

(3,388,976)

Treasury shares

 

1,634

-

Other reserves

 

(3,226,919)

(3,226,919)

Retained earnings

 

(2,158,868)

(345,086)

Equity attributable to owners of the Company

 

(17,159,333)

(13,508,337)

Non-current liabilities

 

Deferred income

 

(3,805)

(4,425)

Loans and borrowings

21

(3,187,094)

(3,821,008)

Deferred tax liabilities

11

(1,369,463)

(1,475,534)

Long term lease liabilities

22

(1,258,001)

(1,527,543)

 

(5,818,363)

(6,828,510)

Current liabilities

 

Trade and other payables

23

(4,651,966)

(5,631,921)

Deferred income

 

(8,898)

(721)

Income tax liability

 

(463,089)

(62,217)

Loans and borrowings

21

(986,463)

(929,156)

Current portion of long term lease liabilities

22

(269,541)

(271,106)

 

(6,379,957)

(6,895,121)

 

Refined Brands Limited

Consolidated Statement of Financial Position as at 28 January 2024

Note

28 January
2024
£

29 January
2023
£

Total liabilities

 

(12,198,320)

(13,723,631)

Total equity and liabilities

 

(29,357,653)

(27,231,968)

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

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

Company Registration Number: 13175575

 

Refined Brands Limited

Statement of Financial Position

28 January 2024

Note

28 January
2024
£

29 January
2023
£

Assets

Non-current assets

 

Property, plant and equipment

12

528

528

Intangible assets

14

311,475

-

Investments in subsidiaries, joint ventures and associates

15

22,700,682

22,700,682

Loans to related parties

 

2,566,621

2,566,621

 

25,579,306

25,267,831

Current assets

 

Cash and cash equivalents

19

701,712

855,757

Other current financial assets

16

677,275

677,275

Trade and other receivables

 

243,165

62,803

 

1,622,152

1,595,835

Total assets

 

27,201,458

26,863,666

Equity and liabilities

Equity

 

Share capital

20

(6,560,519)

(6,547,356)

Share premium

 

(5,214,661)

(3,388,976)

Treasury shares

 

1,634

-

Other reserves

 

(3,226,919)

(3,226,919)

Retained earnings

 

1,774,554

501,055

Total equity

 

(13,225,911)

(12,662,196)

Non-current liabilities

 

Loans and borrowings

21

(3,187,094)

(3,821,008)

Amounts due to related parties

 

(7,710,640)

(8,402,828)

 

(10,897,734)

(12,223,836)

Current liabilities

 

Trade and other payables

23

(2,091,350)

(1,048,478)

Loans and borrowings

21

(986,463)

(929,156)

 

(3,077,813)

(1,977,634)

Total liabilities

 

(13,975,547)

(14,201,470)

Total equity and liabilities

 

(27,201,458)

(26,863,666)

 

Refined Brands Limited

Statement of Financial Position

28 January 2024

The Company made a loss for the financial period of £1,269,663 (2023: loss of £267,215). The Company has taken the exemption in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.

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

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

Company Registration Number: 13175575

 

Refined Brands Limited

Consolidated Statement of Changes in Equity

Period from 30 January 2023 to 28 January 2024

Share capital
£

Share premium
£

Treasury shares
£

Other reserves
£

Retained earnings
£

Total
£

At 30 January 2023

6,547,356

3,388,976

-

3,226,919

345,086

13,508,337

Profit for the period

-

-

-

-

1,817,618

1,817,618

Total comprehensive income

-

-

-

-

1,817,618

1,817,618

New share capital subscribed

13,163

1,825,685

-

-

-

1,838,848

Purchase of own share capital

-

-

(1,634)

-

(3,836)

(5,470)

At 28 January 2024

6,560,519

5,214,661

(1,634)

3,226,919

2,158,868

17,159,333

Share capital
£

Share premium
£

Treasury shares
£

Other reserves
£

Retained earnings
£

Total
£

At 1 February 2022

6,499,499

-

-

-

567,398

7,066,897

Loss for the period

-

-

-

-

(222,312)

(222,312)

Total comprehensive income

-

-

-

-

(222,312)

(222,312)

New share capital subscribed

47,857

3,388,976

-

3,226,919

-

6,663,752

At 29 January 2023

6,547,356

3,388,976

-

3,226,919

345,086

13,508,337

 

Refined Brands Limited

Statement of Changes in Equity

Period from 30 January 2023 to 28 January 2024

Share capital
£

Share premium
£

Treasury shares
£

Merger reserve
£

Retained earnings
£

Total
£

At 30 January 2023

6,547,356

3,388,976

-

3,226,919

(501,055)

12,662,196

Loss for the period

-

-

-

-

(1,269,663)

(1,269,663)

Total comprehensive income

-

-

-

-

(1,269,663)

(1,269,663)

New share capital subscribed

13,163

1,825,685

-

-

-

1,838,848

Purchase of own share capital

-

-

(1,634)

-

(3,836)

(5,470)

At 28 January 2024

6,560,519

5,214,661

(1,634)

3,226,919

(1,774,554)

13,225,911

Share capital
£

Share premium
£

Treasury shares
£

Merger reserve
£

Retained earnings
£

Total
£

At 1 February 2022

6,499,499

-

-

-

(233,840)

6,265,659

Loss for the period

-

-

-

-

(267,215)

(267,215)

Total comprehensive income

-

-

-

-

(267,215)

(267,215)

New share capital subscribed

47,857

3,388,976

-

3,226,919

-

6,663,752

At 29 January 2023

6,547,356

3,388,976

-

3,226,919

(501,055)

12,662,196

 

Refined Brands Limited

Consolidated Statement of Cash Flows

Period from 30 January 2023 to 28 January 2024

Note

2024
£

2023
£

Cash flows from operating activities

Profit/(loss) for the period

 

1,817,618

(222,312)

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

748,464

452,637

Depreciation on right of use assets

6

278,150

230,482

(Profit)/loss on disposal of property plant and equipment

(372)

7,944

Finance income

7

(3,491)

(3,206)

Finance costs

7

588,586

389,399

Income tax expense

11

531,345

62,962

 

3,960,300

917,906

Increase in inventories

17

(470,134)

(1,905,732)

(Increase)/decrease in trade and other receivables

18

(898,786)

79,113

Decrease in trade and other payables

23

(979,955)

(269,368)

Increase/(decrease) in deferred income

 

7,557

(838)

Cash generated from operations

 

1,618,982

(1,178,919)

Income taxes paid

 

(126,874)

(295,609)

Net cash flow from operating activities

 

1,492,108

(1,474,528)

Cash flows from investing activities

 

Interest received

7

3,491

3,206

Acquisitions of property plant and equipment

(284,829)

(460,734)

Proceeds from sale of property plant and equipment

 

1,309

-

Acquisition of intangible assets

14

(474,458)

(255,307)

Payments to acquire subsidiaries less cash acquired

 

-

(4,561,864)

Net cash flows from investing activities

 

(754,487)

(5,274,699)

Cash flows from financing activities

 

Interest paid

7

(548,593)

(163,099)

Proceeds from issue of ordinary shares, net of issue costs

 

1,838,848

3,413,752

Payments for purchase of own shares

 

(5,470)

-

Proceeds from bank borrowing draw downs

 

-

3,000,000

Repayment of bank borrowing

 

(576,607)

(179,151)

Payments to finance lease creditors

 

(311,101)

(185,116)

Net cash flows from financing activities

 

397,077

5,886,386

Net increase/(decrease) in cash and cash equivalents

 

1,134,698

(862,841)

Cash and cash equivalents at 30 January

19

3,791,022

4,653,863

Cash and cash equivalents at 28 January

19

4,925,720

3,791,022

 

Refined Brands Limited

Statement of Cash Flows

Period from 30 January 2023 to 28 January 2024

Note

2024
£

2023
£

Cash flows from operating activities

Loss for the period

 

(1,269,663)

(267,215)

Adjustments to cash flows from non-cash items

 

Finance costs

 

989,267

236,784

 

(280,396)

(30,431)

Working capital adjustments

 

Increase in trade and other receivables

18

(180,362)

(3,305,030)

(Decrease)/increase in trade and other payables

23

(131,213)

471,632

Net cash flow from operating activities

 

(591,971)

(2,863,829)

Cash flows from investing activities

 

Acquisition of subsidiaries

15

-

(10,908,809)

Acquisitions of property plant and equipment

-

(528)

Acquisition of intangible assets

14

(311,475)

-

Net cash flows from investing activities

 

(311,475)

(10,909,337)

Cash flows from financing activities

 

Interest paid

 

(989,267)

(10,483)

Proceeds from issue of ordinary shares, net of issue costs

 

1,838,848

3,413,744

Payments for purchase of own shares

 

(5,470)

-

Proceeds from bank borrowing draw downs

 

-

3,000,000

Repayment of bank borrowing

 

(576,607)

(179,151)

Proceeds from other borrowing draw downs

 

481,897

8,402,828

Net cash flows from financing activities

 

749,401

14,626,938

Net (decrease)/increase in cash and cash equivalents

 

(154,045)

853,772

Cash and cash equivalents at 30 January

 

855,757

1,985

Cash and cash equivalents at 28 January

 

701,712

855,757

 

Refined Brands 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

Statement of compliance

The Group financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations adopted by the UK ("adopted IFRS's").

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

The financial statements have been prepared in accordance with adopted IFRSs and under historical cost accounting rules.

The financial statements are presented in Sterling, which is the functional currency of the Group and Company.

Going concern

Whilst the Group saw an impact on trading due to market and macro-economic factors there was growth in the concession partner channels. The Directors have reviewed forecasts and budgets considering the above and are confident of the Group’s ability to continue trading as a going concern for the foreseeable future.

The Group has a positive current and net asset base, as well as a large cash balance held at the period end.

The financial statements have therefore been prepared on a going concern basis.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to the period end.

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the period are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the Group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-Company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.

Intra-Group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

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.

None of the standards, interpretations and amendments which are effective for periods beginning after 30 January 2023 and which have not been adopted early, are expected to have a material effect on the financial statements.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Group'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 Group does not offer an option to purchase a warranty. This revenue is recognised in the accounting period when control of the product has been transferred, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for fulfilling its performance obligations to customers.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

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 Group 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 consolidated financial statements and on unused tax losses or tax credits in the Group. 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 statement of financial position 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.

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

10% - 33% straight line

Furniture, fittings and equipment

20 - 50% straight line or reducing balance

Motor vehicles

20 - 25% straight line or reducing balance

Other property, plant and equipment

15% - 25% straight line or reducing balance

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Right-of-use asset

Right-of-use assets consist of a lease for a property under IFRS16. These assets are depreciated over the shorter of the lease term and the useful life of the underlying asset. Depreciation starts at the
commencement date of the lease and has been charged at 11 - 17% straight line.

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

Goodwill is capitalised, classified as an asset on the balance sheet and reviewed for impairment at the end of each full financial period.

Website development costs, brand and other intangibles 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 and software costs

33 - 50% straight line

Brand and other intangibles

7% - 10% straight line

Investments

Fixed asset investments are measured at cost less impairment.

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 year 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 Group will not be able to collect all amounts due according to the original terms of the receivables.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Inventories

Inventory 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.

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.

Borrowings

All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group 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.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

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 Group 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.

Defined contribution pension obligation

The Group 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.

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 Group recognises financial assets and financial liabilities in the statement of financial position when, and only when, the Group 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.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Derecognition

Financial assets

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

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.

3

Critical accounting judgements and key sources of estimation uncertainty

Sales return provision
The Group 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 £231,911 (2023: £450,201).

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 judgement and uncertainty was increased in the prior financial period as the Group acquired a significant amount of aged stock as part of a trade and asset purchase, some of which remains unsold at the current financial period end. The carrying value of the provision at period end is £1,429,590 (2023: £2,913,420).

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

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 Group 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

Revenue

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

2024
£

2023
£

Sale of goods

37,089,057

22,369,993

The analysis of the Group's revenue from continuing operations for the period , broken down by geographical location, is as follows:

2024

2023

UK

28,661,637

 

14,588,204

Europe

2,063,714

 

1,170,897

Rest of world

6,363,706

 

6,610,892

 

37,089,057

 

22,369,993

5

Other operating income

The analysis of the Group'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

2024
£

2023
£

Depreciation expense

262,798

153,940

Depreciation on right of use assets - property

278,150

230,482

Amortisation expense

485,666

298,697

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

(372)

7,944

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

7

Finance income and costs

2024
£

2023
£

Finance income

Interest income on bank deposits

3,491

3,206

Finance costs

Interest on bank overdrafts and borrowings

(223,660)

(115,842)

Interest on obligations under finance leases and hire purchase contracts

(39,993)

(47,256)

Interest expense on loan notes

(324,933)

(226,301)

Total finance costs

(588,586)

(389,399)

Net finance costs

(585,095)

(386,193)

8

Staff costs

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

2024
£

2023
£

Wages and salaries

5,986,612

3,078,678

Social security costs

545,863

274,112

Pension costs, defined contribution scheme

176,249

73,120

6,708,724

3,425,910

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

2024
No.

2023
No.

Product and sourcing

54

49

Administration and support

65

31

Sales

28

18

Marketing

29

17

Distribution

73

32

249

147

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

9

Directors' remuneration

The Directors' remuneration for the period was as follows:

2024
£

2023
£

Remuneration

477,131

281,171

Contributions paid to money purchase schemes

15,436

3,619

Sums paid to third parties for Directors' services

62,286

19,000

554,853

303,790

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

During the period a number of Directors and other senior employees received Ordinary M shares at nominal value. These shares participate in a capital distribution, on sale or wind up, only after the initial distribution of £140.76 per share, to participating Ordinary shareholders of other classes. The proceeds received for other Ordinary share classes issued during the period was £140.76. The value of the Ordinary M shares to individual holders will increase in line with the underlying increases in the share price of the Group.

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.

10

Auditors' remuneration

2024
£

2023
£

Audit of these financial statements

10,675

10,000


 

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

11

Income tax

Tax charged in the income statement

2024
£

2023
£

Current taxation

UK corporation tax

668,255

131,235

UK corporation tax adjustment to prior periods

(30,840)

-

637,415

131,235

Deferred taxation

Arising from origination and reversal of temporary differences

(106,070)

(68,273)

Tax expense in the income statement

531,345

62,962

The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2023 - higher than the standard rate of corporation tax in the UK) of 24.02% (2023 - 19%).

The differences are reconciled below:

2024
£

2023
£

Profit/(loss) before tax

2,348,963

(159,350)

Corporation tax at standard rate

564,251

(30,276)

Decrease in current tax from adjustment for prior periods

(30,840)

-

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

8,100

167,998

Deferred tax credit from unrecognised tax loss or credit

-

(1,494)

Deferred tax credit relating to changes in tax rates or laws

(292)

(11,259)

Increase from effect of tax incentives

-

(7,451)

Other tax effects for reconciliation between accounting profit and tax income

(9,874)

(54,556)

Total tax charge

531,345

62,962

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Deferred tax

Group

Deferred tax assets and liabilities

2024

Asset
£

Liability
£

Net deferred tax
£

Accelerated tax depreciation

-

(130,179)

(130,179)

Provisions

-

6,260

6,260

Revaluation of intangible assets

-

(1,255,203)

(1,255,203)

Tax losses carry-forwards

-

9,659

9,659

-

(1,369,463)

(1,369,463)

2023

Asset
£

Liability
£

Net deferred tax
£

Accelerated tax depreciation

-

(142,516)

(142,516)

Provisions

-

9,152

9,152

Revaluation of intangible assets

-

(1,354,315)

(1,354,315)

Tax losses carry-forwards

-

12,145

12,145

-

(1,475,534)

(1,475,534)

Deferred tax movement during the period:

At 1 February 2022
£

Recognised in income statement
£

Recognised on business combination
£

At
29 January 2023
£

Accelerated tax depreciation

(68,819)

(73,697)

-

(142,516)

Provisions

1,039

8,113

-

9,152

Revaluation of intangible assets

(872,433)

70,047

(551,929)

(1,354,315)

Tax losses carry-forwards

-

12,145

-

12,145

(940,213)

16,608

(551,929)

(1,475,534)

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

12

Property, plant and equipment

Group

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

212,029

14,495

163,970

634,057

Acquired through business combinations

212,227

302,379

16,246

7,195

538,047

Additions

41,822

108,916

-

309,996

460,734

Disposals

(2,343)

(8,912)

-

-

(11,255)

At 29 January 2023

495,269

614,412

30,741

481,161

1,621,583

At 30 January 2023

495,269

614,412

30,741

481,161

1,621,583

Additions

102,952

155,104

-

26,773

284,829

Disposals

-

(2,475)

-

-

(2,475)

At 28 January 2024

598,221

767,041

30,741

507,934

1,903,937

Depreciation

At 1 February 2022

65,616

168,882

2,502

48,406

285,406

Acquired through business combinations

113,056

205,927

16,246

4,389

339,618

Charge for period

38,967

67,060

2,676

45,238

153,941

Eliminated on disposal

(35)

(3,276)

-

-

(3,311)

At 29 January 2023

217,604

438,593

21,424

98,033

775,654

At 30 January 2023

217,604

438,593

21,424

98,033

775,654

Charge for the period

66,154

135,505

2,081

59,058

262,798

Eliminated on disposal

-

(1,538)

-

-

(1,538)

At 28 January 2024

283,758

572,560

23,505

157,091

1,036,914

Carrying amount

At 28 January 2024

314,463

194,481

7,236

350,843

867,023

At 29 January 2023

277,665

175,819

9,317

383,128

845,929

At 1 February 2022

177,947

43,147

11,993

115,564

348,651

Included within the net book value of land and buildings above is £314,463 (2023: £277,665) in respect of short leasehold properties.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Company

Other property, plant and equipment
£

Total
£

Cost or valuation

At 1 February 2022

-

-

Additions

528

528

At 29 January 2023

528

528

At 30 January 2023

528

528

At 28 January 2024

528

528

Depreciation

Carrying amount

At 28 January 2024

528

528

At 29 January 2023

528

528

At 1 February 2022

-

-

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

13

Right of use assets

Group

Property
£

Cost or valuation

At 1 February 2022

2,049,135

Acquired through business combination

525,272

Disposals

(62,170)

At 29 January 2023

2,512,237

At 30 January 2023

2,512,237

At 28 January 2024

2,512,237

Depreciation

At 1 February 2022

341,216

Acquired through business combinations

261,275

Charge for period

230,482

Eliminated on disposal

(62,170)

At 29 January 2023

770,803

At 30 January 2023

770,803

Charge for the period

278,150

At 28 January 2024

1,048,953

Carrying amount

At 28 January 2024

1,463,284

At 29 January 2023

1,741,434

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

14

Intangible assets

Group

Goodwill
£

Brand and other intangibles
£

Website and software
£

Total
£

Cost or valuation

At 1 February 2022

1,792,759

3,739,000

223,343

5,755,102

Acquired through business combinations

5,184,851

2,214,752

93,975

7,493,578

Additions

-

200,000

55,307

255,307

At 29 January 2023

6,977,610

6,153,752

372,625

13,503,987

At 30 January 2023

6,977,610

6,153,752

372,625

13,503,987

Additions

-

-

474,458

474,458

At 28 January 2024

6,977,610

6,153,752

847,083

13,978,445

Amortisation

At 1 February 2022

51,542

249,267

206,227

507,036

Acquired through business combinations

7,788

3,051

76,982

87,821

Amortisation charge

437

280,426

17,833

298,696

At 29 January 2023

59,767

532,744

301,042

893,553

At 30 January 2023

59,767

532,744

301,042

893,553

Amortisation charge

1,050

411,153

73,463

485,666

At 28 January 2024

60,817

943,897

374,505

1,379,219

Carrying amount

At 28 January 2024

6,916,793

5,209,855

472,578

12,599,226

At 29 January 2023

6,917,843

5,621,008

71,583

12,610,434

At 1 February 2022

1,741,217

3,489,733

17,116

5,248,066

Goodwill, other intangibles and Group property, plant and equipment are considered a single aggregate cash-generating-unit (CGU) for each trading business. The Directors considered the cash-flow forecasts for each CGU and are satisfied that no impairment is required to the asset balance as at 28 January 2024. Amortisation expense is included in administrative expenses.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Individually material intangible assets

Brand 1

The carrying amount of this asset is £2,991,200 (2023 - £3,240,466) and the remaining amortisation period is 12 years (2023 - 13 years).

Brand 2

The carrying amount of this asset is £1,505,463 (2023 - £1,614,292) and the remaining amortisation period is 14 years (2023 - 15 years).

Brand 3

The carrying amount of this asset is £524,149 (2023 - £562,501) and the remaining amortisation period is 14 years (2023 - 15 years).

Company

Website and software
£

Total
£

Cost or valuation

At 30 January 2023

-

-

Additions

311,475

311,475

At 28 January 2024

311,475

311,475

Amortisation

Carrying amount

At 28 January 2024

311,475

311,475

At 29 January 2023

-

-

At 1 February 2022

-

-

Amortisation expense is included in administrative expenses.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

15

Investments

Group subsidiaries

Details of the Group subsidiaries as at 28 January 2024 are as follows:

Name of subsidiary
 

Principal activity
 

Registered office
 

Proportion of ownership interest and voting rights held
2024

2023

Whitworth CS Holdings Ltd

Holding Company

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

England and Wales

100% / 100%

Celtic Sheepskin & Co Limited

Design, manufacture and create clothing

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

England and Wales

100% / 100%

Frugi Limited

Sale of ethical and organic children's clothing

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

England and Wales

100% / 100%

Kettlewell Colours Limited*

Online clothing retail sales

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

England and Wales

100% / 100%

Turtle Doves Holdings Limited*

Holding Company

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

England and Wales

100% / 100%

Turtle Doves (Not Just Gloves) Limited

Sale of recycled clothing and accessories

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

England and Wales

100% / 100%

* indicates direct investment of the Company

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Summary of the Company investments

28 January
2024
£

29 January
2023
£

Investments in subsidiaries

22,700,682

22,700,682

Subsidiaries

£

Cost or valuation

At 1 February 2022

8,541,865

Additions

14,158,817

At 29 January 2023

22,700,682

At 30 January 2023

22,700,682

At 28 January 2024

22,700,682

Carrying amount

At 28 January 2024

22,700,682

At 29 January 2023

22,700,682

At 1 February 2022

8,541,865

16

Other financial assets

 

Group

Company

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Current financial assets

Financial asset for shares receivable

677,275

677,275

677,275

677,275

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

17

Inventories

 

Group

Company

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Raw materials and consumables

663,052

525,269

-

-

Work in progress

160,384

296,950

-

-

Finished goods and goods for resale

6,215,247

5,746,330

-

-

7,038,683

6,568,549

-

-

The cost of Group inventories recognised as an expense in the period amounted to £11,591,307 (2023 - £8,664,144). This is included within cost of sales.

The inventories provision at period end is £1,429,590 (2023: £2,913,420).

18

Trade and other receivables

 

Group

Company

Current

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Net trade receivables

907,849

299,680

-

-

Receivables from related parties

-

-

147,148

43,395

Prepayments

836,017

493,413

96,017

5,600

Other receivables

42,576

94,563

-

13,808

 

1,786,442

887,656

243,165

62,803

 

Group

Company

Non-current

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Loans to related parties

-

-

2,566,621

2,566,621

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 Group recognises a credit loss provision for receivables on a case by case basis. At period end trade receivables of £Nil were determined to be impaired (2023: £Nil).

The loan due to related parties are repayable between 17/09/2032 and 15/12/2032. 6% interest is charged on outstanding balances payable on the final repayment date.

The Group's exposure to credit and market risks, relating to receivables is disclosed in Note 26.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

19

Cash and cash equivalents

 

Group

Company

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Cash on hand

2,896

2,013

-

-

Cash at bank

4,922,824

3,789,009

701,712

855,757

4,925,720

3,791,022

701,712

855,757

20

Share capital

Allotted, called up and fully paid shares

 

28 January
2024

29 January
2023

 

No.

£

No.

£

Ordinary A shares of £1 each

18,844

18,844

18,844

18,844

Ordinary B shares of £1 each

35,819

35,819

23,212

23,212

Ordinary C shares of £1 each

29,835

29,835

29,835

29,835

Ordinary D shares of £1 each

18,320

18,320

18,320

18,320

Ordinary E shares of £1 each

22,968

22,968

23,400

23,400

Ordinary F shares of £1 each

5,328

5,328

5,328

5,328

Ordinary G shares of £1 each

17,761

17,761

17,761

17,761

Ordinary H shares of £1 each

11,544

11,544

10,656

10,656

Ordinary M shares of £0.01 each

10,000

100

-

-

Ordinary redeemable preference shares of £1 each

6,400,000

6,400,000

6,400,000

6,400,000

 

6,570,419

6,560,519

6,547,356

6,547,356

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

New shares allotted

During the period 12,175 Ordinary B shares having an aggregate nominal value of £12,175 were allotted for an aggregate consideration of £1,713,753. Issued to finance acquisitions.

During the period 888 Ordinary H shares having an aggregate nominal value of £888 were allotted for an aggregate consideration of £124,995. Issued to finance acquisitions.

During the period 10,000 Ordinary M shares having an aggregate nominal value of £100 were allotted for an aggregate consideration of £100. Issued to incentivise management.

Redeemable preference shares

The redeemable preference shares are redeemable at the option of the Company. They are redeemable at £1 per share and carry no voting rights. Mandatory redemption occurs on a listing of the Company, a sale of the Company or substantial part of its assets. Each preference share is entitled to a fixed, cumulative, preferential cash dividend of 6%, compounding in arrears on 16th February each year.

As at period end the preference share holders were entitled to a dividend of £1,200,043 (2023: £775,428) which has not yet been declared as the Company has negative distributable reserves.

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 participating ordinary share classes rank pari passu with regard to the Company's residual assets and voting. The Ordinary M shares are not participating shares and have no right to the initial distribution of assets, being £140.76. Each ordinary share class has different rights in regards to appointment of Directors to the board.

Purchase of own shares

During the period the Company purchased 1,634 of its own Ordinary E shares at a nominal value of £1,634. The Ordinary E shares were purchased for a consideration of £5,470 and represent 7% of the called up share capital of that class of share. The transaction was made to repurchase shares held by former employees. The maximum percentage of called up shares of that class held in the period is 7%.

The maximum number of its own shares held by the Company during the period was 1,634 having a maximum aggregate nominal value of £1,634.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

21

Loans and borrowings

 

Group

Company

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Non-current loans and borrowings

Bank borrowings

932,847

1,891,693

932,847

1,891,693

Loan notes

2,254,247

1,929,315

2,254,247

1,929,315

3,187,094

3,821,008

3,187,094

3,821,008

 

Group

Company

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Current loans and borrowings

Bank borrowings

986,463

929,156

986,463

929,156

Group

Bank borrowings

Bank loan is denominated in £ sterling with a nominal interest rate of base rate + 2.5%, and with the final instalment due on 16 November 2025. The carrying amount at period end is £1,919,310 (2023 - £2,820,849).

The bank loan is secured by a fixed and floating charge over all the assets of the Group held by HSBC UK Bank PLC.

Other borrowings

The loan notes secured by a fixed and floating charge over all the assets of the Group held by KSL Holding EHF.

The loan notes accrue interest at 10% per annum. Interest is compounded from the anniversary of the issue date (15th February). Repayment is due at the latest in February 2026.

The Group's exposure to market and liquidity risks, including maturity analysis, relating to loans and borrowings is disclosed in note 26 "Financial risk review".

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

22

Leases

Group

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

302,334

311,099

2 years

258,500

302,334

3 years

258,500

258,500

4 years

239,000

258,500

5 years

223,000

239,000

6 years

223,000

223,000

7 years

130,000

223,000

8 years

-

130,000

Total lease liabilities (undiscounted)

1,634,334

1,945,433

Reconciliation to balance sheet

Reconciliation to amounts presented in balance sheet at present value:

Analysed as

28 January
2024
£

29 January
2023
£

Interest

106,792

146,784

Current lease liabilities

269,541

271,106

Non-current lease liabilities

1,258,001

1,527,543

Total cash outflow

1,634,334

1,945,433

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

23

Trade and other payables

 

Group

Company

28 January
2024
£

29 January
2023
£

28 January
2024
£

29 January
2023
£

Trade payables

2,091,566

1,855,040

29,781

1,706

Amounts due to related parties

-

-

1,950,398

776,312

Social security and other taxes

1,521,995

1,750,097

34,679

-

Outstanding defined contribution pension costs

47,667

67,449

-

-

Other payables

434,134

1,561,662

2

264,460

Accrued expenses

556,604

397,673

76,490

6,000

4,651,966

5,631,921

2,091,350

1,048,478

The fair value of the trade and other payables classified as financial instruments are disclosed in the financial instruments note (Note 27).

The Group's exposure to market and liquidity risks, including maturity analysis, related to trade and other payables is disclosed in the financial risk management and impairment note (Note 26).

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 amounts due to related parties are repayable on demand. No interest is charged on outstanding balances.

24

Pension and other schemes

Defined contribution pension scheme

The Group operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the Group to the scheme and amounted to £176,249 (2023 - £73,120. Contributions totalling £47,667 (2023 - £67,449) were payable to the scheme at the end of the period and are included in creditors.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

25

Reconciliation of liabilities arising from financing activities

Group

         

At 30 January 2023
£

Financing cash flows
£

Other changes
£

At 28 January 2024
£

Cash and cash equivalents

Cash

3,791,022

1,009,698

-

4,800,720

3,791,022

1,009,698

-

4,800,720

Borrowings

Long term borrowings

(3,821,008)

901,539

(267,625)

(3,187,094)

Short term borrowings

(929,156)

-

(57,307)

(986,463)

Lease liabilities

(1,798,649)

311,100

(39,993)

(1,527,542)

(6,548,813)

1,212,639

(364,925)

(5,701,099)

 

(2,757,791)

2,222,337

(364,925)

(900,379)

26

Financial risk review

Group

The Group has a financial asset for shares receivable accounted at fair value through the income statement. This was settled post period end at the amount recognised in the financial statements.

Risk management

The Group is exposed to market risk (including foreign currency risk and interest rate risk), credit risk, and liquidity risk in the normal course of business. These risks are limited by the Group's financial management policies and practices described below. There has been no change to the Group's exposure to financial risks or the manner in which these risks are managed and measured.

Market risk

 

Foreign exchange risk

Our materials cost base is somewhat exposed to exchange rate fluctuations, in particular, we have supply into Frugi and Celtic & Co. in USD and into Kettlewell in EUR. As all the brands continue to expand their consumer offering internationally, with a significant element of the Kettlewell revenue earned in USD and Frugi revenue earned in EUR, 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.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

 

Interest rate risk

The Group has historically raised funds through equity predominantly and this reduces the risk of interest rates on borrowings. Our balance sheet debt comprises a balance of variable and fixed rate instruments, with our overall exposure to interest rate fluctuation considered low.

The one variable-rate debt instrument we have (linked with the Bank of England base rate), has not had any negative variance post-Balance Sheet date and it is widely expected that the base rate will hold or decrease over the near-to-mid-term. As the debt is due to be fully repaid by November 2025, the exposure to any significant interest rate risk over the life left on the term, is deemed low.

The high inflation rates experienced over the past couple of period 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. As noted previously in this report, we have taken steps to reduce our overheads base by relocating the Turtle Doves brand to our Group headquarters in Cornwall.

 

Credit spread risk

In order to minimise credit risk, the Group has adopted a policy of only dealing with creditworthy counterparties (banks and debtors) The most significant credit risk relates to customers that may default in making payments for goods they have purchased. This risk is significantly reduced by the fact that the majority of customers pay for goods in advance of dispatch.

 

Other specific risk

The Directors regularly monitor forecast and actual cash flows and match the maturity profiles of financial assets and liabilities to ensure proper liquidity risk management and to maintain adequate reserves, and borrowing facilities.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

27

Financial instruments

Group

2024
£

2023
£

Amortised cost

Cash and short-term deposits

4,925,720

3,791,022

Trade and other receivables excluding prepayments

950,425

394,459

Trade and other payables

(4,651,966)

(5,631,921)

Bank borrowings current

(986,463)

(929,156)

Bank borrowings non-current

(932,847)

(1,891,693)

Loan notes

(2,254,247)

(1,929,315)

Fair value through income statement

Financial asset for shares receivable

677,275

677,275

Company
Amortised cost

2024
£

2023
£

Cash and short-term deposits

701,712

855,757

Trade and other receivables excluding prepayments

147,148

57,203

Trade and other payables

(2,091,350)

(1,048,480)

Bank borrowings current

(986,463)

(929,156)

Bank borrowings non current

(932,847)

(1,891,693)

Amounts due to related parties non current

(7,710,640)

(8,402,828)

Loan notes

(2,254,247)

(1,929,315)

Fair value through income statement

Financial asset for shares receivable

677,275

677,275

28

Related party transactions

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

Key management personnel

The key management personnel are considered to be the Directors whose remuneration is disclosed in Note 9.

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Transactions with Directors

Loans, transactions and guarantees with Directors

2024

At 30 January 2023
£

Advances to Director
£

Repayments by Director
£

At 28 January 2024
£

Director 1

Director's loan balance

383

(409)

26

-

         

The maximum amount outstanding during the period from the arrangements with the Director was the opening balance. The loan account is interest free and repayable on demand.

       

Director 2

Director's loan balance

(27,776)

(2,873)

30,649

-

         

The maximum amount outstanding during the period from the arrangements with the Director was the opening balance. The loan account is interest free and repayable on demand.

       

 

2023

At 1 February 2022
£

Advances to directors
£

Repayments by director
£

Other payments made to Company by Director
£

At 29 January 2023
£

Director 1

Director's loan balance

310

(440)

513

-

383

           

         

Director 2

Director's loan balance

-

(27,776)

-

-

(27,776)

           

         

Summary of transactions with other related parties

Transactions with companies under control of one or more Directors of the Group, or their close family.
 

 

Refined Brands Limited

Notes to the Financial Statements

Period from 30 January 2023 to 28 January 2024

Expenditure with and payables to related parties

2024

Other related parties
£

Receipt of services

9,300

2023

Other related parties
£

Receipt of services

2,306

29

Application of new and revised International Financial Reporting Standards (IFRSs)

New and amended Standards and Interpretations applied
None of the new or amended IFRS Standards, effective from 1 January 2023, had an effect on the financial statements:

• 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 IAS12)
• International Tax Reform-Pillar Two Model Rules (Amendments to IAS 12)
• IFRS 17 Insurance Contracts

New and revised Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not early adopted the following amendments to Standards and Interpretations that have been issued but are not yet effective:

Supplier Finance Arrangements - effective 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements - effective 1 January 2024
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) - effective 1 January 2024

None of the above amendments are anticipated to have a material impact on future financial statements.