REGISTERED NUMBER: |
MORGENROT GROUP PLC |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2024 |
REGISTERED NUMBER: |
MORGENROT GROUP PLC |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2024 |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30 APRIL 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Statement of Comprehensive Income | 10 |
Statement of Financial Position | 11 |
Statement of Changes in Equity | 12 |
Statement of Cash Flows | 13 |
Notes to the Statement of Cash Flows | 14 |
Notes to the Financial Statements | 16 |
MORGENROT GROUP PLC |
COMPANY INFORMATION |
FOR THE YEAR ENDED 30 APRIL 2024 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Accountants |
Statutory Auditors |
The Exchange |
5 Bank Street |
Bury |
BL9 0DN |
BANKERS: |
Parklands |
De Havilland Way |
Horwich |
Bolton |
Greater Manchester |
BL6 4YU |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30 APRIL 2024 |
The directors present their strategic report for the year ended 30 April 2024. |
REVIEW OF BUSINESS |
In the financial year ending April 2024, Morgenrot recorded total revenue of £11.34 million, a 12.3% increase from £10.09 million in 2022/23. Alongside this growth, the company achieved a net profit margin of 3.0%, up from 2.5% in the prior year, though still below the 3.8% margin recorded in 2021/22. This recovery reflects better management of rising operational costs, gradual improvements in overall product margins, and a more diverse product range. |
Operationally, Morgenrot continues to manage its distribution network primarily through its Manchester facilities. However, operations in Bristol and Brighton, aimed at enhancing service in the Southwest and Southeast of England, remain costly compared to the business and margin they generate. We are reviewing both operations as part of our future business strategy. |
The company's focus on premium wines, a refreshed entry-level selection, and lower-ABV beers has resonated well with market trends, driving both revenue and profitability. The growth reflects steady demand for our premium brands and innovative wine selection in the UK market. |
MARKET TRENDS AND STRATEGY |
UK On-Trade Market (Wine & Beer) Overview - 2023/24 |
Alcohol Duty Changes (Autumn 2023): |
The UK saw significant reforms in alcohol duty in August 2023, shifting the tax system to one based on Alcohol by Volume (ABV) across all categories. Key changes include: |
- | Increased duty on wines between 11.5% and 14.5% ABV, leading to a 20% rise in duty for typical wines (75cl bottle). |
- | Lower duty on sparkling wines, aligning it with still wine. |
- | Favourable rates for lower-ABV products (wines under 11%, beers under 3.5%), which may spur growth in this segment. |
- | Draught Relief for on-trade venues, providing a tax break on draught beer and cider, encouraging pub sales. |
While these changes aim to promote lower-ABV products and benefit on-trade venues, higher-strength products like fortified wines and spirits face steeper tax increases. |
General Market Conditions in the On-Trade (Wine & Beer): |
The broader UK on-trade market in 2023/24 continues to recover from pandemic-related disruptions but is facing pressures from inflation, rising costs, and changing consumer behaviour: |
- | Cost Pressures: Venues are struggling with higher energy, raw material, and labour costs, pushing up operating expenses. Despite tax breaks on draught products, brewers and distributors face price hikes, passed on to both businesses and consumers. |
- | Premiumisation & Experience-Driven Spending: Even with inflation, many consumers still prioritise quality over quantity. Pubs and restaurants have seen customers focusing on fewer, better-quality drinks, especially premium beers, craft wines, and cocktails. This shift has benefitted venues with strong premium offerings. |
- | Lower Alcohol Consumption Trends: There is a notable trend toward lower-alcohol drinks, particularly among younger, health-conscious consumers. The duty changes have incentivised brewers to reduce ABV levels in popular beers, such as Carlsberg lowering its flagship beer to 3.4% ABV to benefit from lower taxation. This also aligns with broader trends favouring more moderate drinking in the UK. |
- | Sales Performance: Despite cost pressures, the on-trade sector has shown resilience, with reports indicating on-premises drink sales were 7% ahead of June 2022 levels. However, the sector remains cautious, as the ongoing cost-of-living crisis may dampen further recovery in 2024. |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30 APRIL 2024 |
Premiumisation |
Consumers in the UK on-trade market are visiting establishments less frequently but are willing to spend more when they do, driving demand for premium experiences. To capture this trend, we have expanded our portfolio of organic and natural wines and are offering more premium beer selections. |
Diversification |
We have diversified our entry-level product offerings, particularly by introducing a range of affordably priced Italian wines to complement our strong Spanish portfolio. This allows us to cater to a broader range of customers and price points, expanding our reach in both the on-trade and retail sectors. |
Sustainability and Health Trends |
In response to increasing consumer interest in health-conscious options, we have made significant strides in the "No/Low" alcohol category. This aligns with broader health and wellness trends, enabling us to tap into a growing market segment and reduce duty costs. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks to the business remain largely unchanged, but the following developments are expected to pose challenges in the coming year: |
- | Government Policy Changes: Potential new policies and regulations following a change in government in 2024 could impact import duties, taxes, and labour regulations, further increasing costs and requiring the company to adapt swiftly. |
- | Supply Chain Disruptions: Ongoing global supply chain issues, including increased shipping costs and delays, are expected to persist. We will continue to monitor this and adapt through inventory management strategies and supplier diversification. |
- | Rising Interest Rates: High interest rates are increasing borrowing costs for the business, necessitating careful management of financial risks, including currency fluctuations due to import reliance. |
FINANCIAL RISK MANAGEMENT |
Our financial risk management strategy focuses on maintaining strong revenue levels while controlling costs. In 2024/25, we will intensify efforts to: |
- | Hedge against currency fluctuations, which are impacting import costs due to exchange rate volatility. |
- | Maintain profitability through careful pricing strategies, ensuring our gross and net margins remain competitive despite rising costs. |
- | Strengthen cash flow management to ensure sufficient liquidity to meet operational demands as we scale. |
KEY PERFORMANCE INDICATORS |
The company will continue to measure performance using the following KPIs: |
- | Revenue Growth: Aim for a 10-12% annual increase in revenue to achieve the £21 million target by 2028/29. |
- | Net Profit Margin: Increase the net profit margin to 5% by focusing on cost management and high-margin product categories. |
- | Working Capital Management: Improve inventory turnover and shorten receivables periods to maintain effective working capital levels. |
- | Sales Channel Performance: Monitor and adjust performance across key channels (on-trade, retail, e-commerce) to maximise sales. |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30 APRIL 2024 |
FUTURE DEVELOPMENTS |
In 2024/25, we plan to: |
- | Expand our product range further into premium and health-conscious categories, including organic, natural, and "No/Low" alcohol products. |
- | Enhance our digital presence by investing in e-commerce platforms to capitalise on the growing demand for online alcohol purchases. |
- | Continue operational efficiency initiatives, including optimising logistics routes and leveraging technology for better warehouse management and order processing. |
- | Build long-term supplier relationships with key brands such as Alhambra and Krombacher to secure supply stability and favourable pricing. |
We remain confident in our strategy to grow the business in alignment with consumer trends while managing risks and maintaining financial health. |
SUSTAINABILITY AND CORPORATE RESPONSIBILITY |
As part of our long-term sustainability plan, we are committed to: |
- | Reducing our carbon footprint through more efficient logistics and exploring partnerships with environmentally conscious suppliers. |
- | Supporting responsible drinking by promoting our "No/Low" alcohol products and working with on-trade partners to encourage healthier choices among consumers. |
SUMMARY |
The path forward will not be without challenges. Rising costs, potential regulatory changes following the 2024 general election, and ongoing supply chain disruptions require us to remain agile and adaptive. However, with strong revenue growth of 12.3% and improvements in profitability seen in the past year, we have a solid foundation to build on. |
We aim to return our net profit margin to over 4% and continue double-digit sales growth in the coming years. Supported by a strategic plan focused on innovation, sustainability, and clear KPIs, we are confident in our ability to deliver value to shareholders, partners, and customers alike. |
As we move into 2024/25, Morgenrot Group PLC is poised for growth, ready to seize new opportunities, and committed to building a sustainable, profitable future. |
ON BEHALF OF THE BOARD: |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30 APRIL 2024 |
The directors present their report with the financial statements of the company for the year ended 30 April 2024. |
PRINCIPAL ACTIVITIES |
The principal activities of the company in the year under review were those of importer, bonded warehouse keeper, national and regional wholesaler of wines, spirits, beers and related promotional products. |
DIVIDENDS |
The total distribution of dividends for the year ended 30 April 2024 will be £28,000 (2023: £19,333). |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 May 2023 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30 APRIL 2024 |
AUDITORS |
DJH Audit Limited has indicated its willingness to be reappointed for another term and appropriate arrangements are being made for it to be deemed reappointed as auditor in the absence of an Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MORGENROT GROUP PLC |
Opinion |
We have audited the financial statements of Morgenrot Group PLC (the 'company') for the year ended 30 April 2024 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MORGENROT GROUP PLC |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Auditors' 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 a Report of the Auditors 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: |
As part of our planning process: |
- | We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud. |
- | We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006, The Warehousekeepers and Owners of Warehoused Goods Regulation Act 1999, Producer Responsibility Obligations, Alcohol Wholesaler Registration Scheme, General Data Protection Regulation (GDPR) and Anti-Money Laundering Supervision. |
- | We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly. |
- | Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MORGENROT GROUP PLC |
The key procedures we undertook to detect irregularities including fraud during the course of the audit included: |
- | Identifying and testing journal entries, in particular those that were significant and unusual. |
- | Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied. |
- | Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to depreciation rates and estimated useful lives of assets, catagorising finance and operating leases, stock provisions and provision for bad debts. |
- | Assessing the extent of compliance, or lack of, with the relevant laws and regulations in particular those that are central to the entities ability to continue in operation. |
- | Testing key revenue lines, in particular cut-off, for evidence of management bias. |
- | Performing a physical verification of key assets, including stock. |
- | Obtaining third-party confirmation of material bank and loan balances. |
- | Documenting and verifying all significant related party balances and transactions. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Accountants |
Statutory Auditors |
The Exchange |
5 Bank Street |
Bury |
BL9 0DN |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STATEMENT OF COMPREHENSIVE |
INCOME |
FOR THE YEAR ENDED 30 APRIL 2024 |
2024 | 2023 |
Notes | £ | £ |
REVENUE | 3 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Distribution costs | ( |
) | ( |
) |
Administrative expenses | ( |
) | ( |
) |
328,631 | 226,931 |
Other operating income | 4 |
OPERATING PROFIT | 6 |
Interest receivable and similar income | 7 |
394,956 | 288,618 |
Interest payable and similar expenses | 8 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 9 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STATEMENT OF FINANCIAL POSITION |
30 APRIL 2024 |
2024 | 2023 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Property, plant and equipment | 12 |
CURRENT ASSETS |
Inventories | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 20 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Share premium |
Capital redemption reserve |
Retained earnings |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 30 APRIL 2024 |
Called up | Capital |
share | Retained | Share | redemption | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 May 2022 |
Changes in equity |
Dividends | - | ( |
) | - | - | ( |
) |
Total comprehensive income | - | - |
Balance at 30 April 2023 |
Changes in equity |
Dividends | - | ( |
) | - | - | ( |
) |
Total comprehensive income | - | - |
Balance at 30 April 2024 |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 30 APRIL 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase or finance lease rental payments paid |
( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of property plant and equipment | ( |
) | ( |
) |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Loan repayments in year | ( |
) | ( |
) |
Capital repayments in year | ( |
) |
Amounts introduced by directors | 279,781 | 168,991 |
Amounts withdrawn by directors | (397,919 | ) | (69,873 | ) |
Net cash from financing activities | ( |
) |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
(311,532 |
) |
(483,008 |
) |
Cash and cash equivalents at end of year | 2 | ( |
) | ( |
) |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 30 APRIL 2024 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
Profit before taxation |
Depreciation charges |
Finance costs | 53,565 | 36,036 |
Finance income | (3,660 | ) | (1,275 | ) |
467,613 | 354,076 |
Increase in inventories | ( |
) | ( |
) |
(Increase)/decrease in trade and other debtors | ( |
) |
Increase in trade and other creditors |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 30 April 2024 |
30.4.24 | 1.5.23 |
£ | £ |
Cash and cash equivalents | 60,639 | 28,495 |
Bank overdrafts | ( |
) | ( |
) |
(654,015 | ) | (311,532 | ) |
Year ended 30 April 2023 |
30.4.23 | 1.5.22 |
£ | £ |
Cash and cash equivalents | 28,495 | 5,549 |
Bank overdrafts | ( |
) | ( |
) |
(311,532 | ) | (483,008 | ) |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 30 APRIL 2024 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.5.23 | Cash flow | At 30.4.24 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 28,495 | 32,144 | 60,639 |
Bank overdrafts | (340,027 | ) | (374,627 | ) | (714,654 | ) |
(311,532 | ) | ( |
) | (654,015 | ) |
Debt |
Debts falling due within 1 year | (80,000 | ) | (16 | ) | (80,016 | ) |
Debts falling due after 1 year | (233,342 | ) | 80,008 | (153,334 | ) |
(313,342 | ) | 79,992 | (233,350 | ) |
Total | (624,874 | ) | (262,491 | ) | (887,365 | ) |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30 APRIL 2024 |
1. | STATUTORY INFORMATION |
Morgenrot Group PLC is an unlisted public company, limited by shares, registered in England and Wales. The registered number is 00987162. The registered office address is Unit 2, Canary Way, Agecroft Commerce Park, Swinton, Manchester, M27 8AW. |
2. | ACCOUNTING POLICIES |
Basis of preparation |
The company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. |
The company meets the day-to-day working capital requirements using an agreed overdraft facility as required. The directors' expectations, which include increases in revenue and taking account of reasonable possible changes in trading performance, indicate that the company should be able to operate within the level of its current facility. |
The company is in regular contact with its finance providers. During these discussions about the company's future borrowing needs, no matters have been drawn to the directors' attention that suggest that the existing facilities will not continue on acceptable terms beyond the current arrangement. |
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. |
Significant judgements and estimates |
In the application of the company's accounting policies, the directors are required to make estimates and judgements. The estimates are based on historical experience and other relevant factors. Actual results may differ from these estimates. |
The estimates are continually evaluated. Revisions to accounting estimates are recognised in the period in which the estimate is revised. |
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below. |
Estimating the useful economic life of an asset and the anticipated residual value are considered key estimates in calculating an appropriate depreciation charge. |
In categorising leases as finance or operating leases, the directors make judgements as to whether significant risks and rewards of ownership have transferred to the company as lessee. |
Making judgement based on historical experience on the level of provision required for impairment of inventories. Further information received after the statement of financial position date may impact on the level of provision required. |
Determining the recoverability of trade debtors is considered the key judgement in calculating the bad debt provision at the year end. |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
2. | ACCOUNTING POLICIES - continued |
Revenue |
Revenue represents sales of goods, excluding value added tax. Sale of goods are recognised when the company has delivered products to the customer, the customer has accepted the products and collectability of the related receivables is fairly assured. |
Goodwill |
Goodwill has been amortised evenly over its estimated useful life of 10 years. |
Property, plant and equipment |
Freehold property | - |
Land | - |
Office equipment and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Bar and pub equipment | - |
The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each statement of financial position date. The effects of any revision are recognised in the income statement when the change arises. |
Inventories |
Inventories are valued at the lower of cost and net realisable value on a first-in, first-out basis, after making due allowance for obsolete and slow moving items. Cost is based on the invoice value of goods plus a variable charge for duty, levy and delivery and stocking costs. Net realisable value is estimated selling price less costs to complete and sell. |
Financial instruments |
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties and loans to related parties. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement. |
Basic financial liabilities are initially measured at transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Cash and cash equivalents |
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term liquid investments with original maturities of three months or less. |
Foreign currencies |
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to the income statement over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to the income statement on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Dividends |
Equity dividends are recognised when they become legally payable and are no longer at the discretion of the company. |
3. | REVENUE |
The revenue and profit before taxation are attributable to the principal activities of the company. |
All revenue is generated in the United Kingdom. |
4. | OTHER OPERATING INCOME |
2024 | 2023 |
£ | £ |
Rents received |
Sundry receipts | 48,095 | 46,072 |
62,665 | 60,412 |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
5. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2024 | 2023 |
Administration and selling | 21 | 19 |
Directors | 2 | 2 |
During the year, a total of key management personnel compensation of £330,336 (2023: £282,966) was paid. |
2024 | 2023 |
£ | £ |
Directors' remuneration |
6. | OPERATING PROFIT |
The operating profit is stated after charging: |
2024 | 2023 |
£ | £ |
Depreciation - owned assets |
Auditors' remuneration |
7. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2024 | 2023 |
£ | £ |
Bank account interest |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Bank interest |
Bank loan interest |
Hire purchase interest |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax |
Tax on profit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2023 - |
Effects of: |
Expenses not deductible for tax purposes | ( |
) |
Depreciation in excess of capital allowances |
Change in tax rate to 25% | - | 1,245 |
Deferred tax in respect of capital allowances | - | 4,343 |
Deferred tax in respect of prior periods | - | 76 |
Pension timing difference | 289 | - |
Total tax charge | 97,419 | 58,473 |
10. | DIVIDENDS |
2024 | 2023 |
£ | £ |
Ordinary shares of 10p each |
Interim |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
11. | INTANGIBLE FIXED ASSETS |
Goodwill |
£ |
COST |
At 1 May 2023 |
and 30 April 2024 |
AMORTISATION |
At 1 May 2023 |
and 30 April 2024 |
NET BOOK VALUE |
At 30 April 2024 |
At 30 April 2023 |
12. | PROPERTY, PLANT AND EQUIPMENT |
Office |
equipment |
Freehold | and |
property | Land | machinery |
£ | £ | £ |
COST |
At 1 May 2023 |
Additions |
At 30 April 2024 |
DEPRECIATION |
At 1 May 2023 |
Charge for year |
At 30 April 2024 |
NET BOOK VALUE |
At 30 April 2024 |
At 30 April 2023 |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
12. | PROPERTY, PLANT AND EQUIPMENT - continued |
Fixtures | Bar and |
and | Motor | pub |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 May 2023 |
Additions |
At 30 April 2024 |
DEPRECIATION |
At 1 May 2023 |
Charge for year |
At 30 April 2024 |
NET BOOK VALUE |
At 30 April 2024 |
At 30 April 2023 |
13. | INVENTORIES |
2024 | 2023 |
£ | £ |
Finished goods |
14. | DEBTORS |
2024 | 2023 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Other debtors |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Other debtors |
Aggregate amounts |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Trade creditors |
Other creditors | 272,000 | 380,618 |
Corporation tax |
Social security and other taxes |
Directors' current accounts | 109,768 | 201,906 |
Accrued expenses |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans (see note 17) |
17. | LOANS |
An analysis of the maturity of loans is given below: |
2024 | 2023 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank overdrafts |
Bank loan | 80,016 | 80,000 |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
18. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2024 | 2023 |
£ | £ |
Within one year |
Between one and five years |
MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 APRIL 2024 |
19. | SECURED DEBTS |
The following secured debts are included within creditors: |
2024 | 2023 |
£ | £ |
Bank overdrafts |
Bank loans |
The bank overdraft and bank loan are secured by a fixed charge over the company's freehold land and buildings and plant and machinery. |
20. | PROVISIONS FOR LIABILITIES |
2024 | 2023 |
£ | £ |
Deferred tax |
Accelerated capital allowances | 37,322 | 25,101 |
Deferred |
tax |
£ |
Balance at 1 May 2023 |
Movement in the year | 12,221 |
Balance at 30 April 2024 |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
Ordinary | 10p | 109,905 | 109,905 |
22. | PENSION COMMITMENTS |
The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension costs charge represents contributions payable by the company to the fund and amounted to £39,467 (2023: £37,172). |
23. | CONTINGENT LIABILITIES |
The company has given a guarantee in favour of HM Revenue and Customs for £20,000 (2023: £20,000). |
24. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party are members of the Plath family holding shares. |