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REGISTERED NUMBER: 00987162 (England and Wales)















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: V M Plath
C M Plath



SECRETARY: A E Southworth



REGISTERED OFFICE: Unit 2 Canary Way
Agecroft Commerce Park
Swinton
Manchester
M27 8AW



REGISTERED NUMBER: 00987162 (England and Wales)



AUDITORS: DJH Audit Limited
Accountants
Statutory Auditors
The Exchange
5 Bank Street
Bury
BL9 0DN



BANKERS: National Westminster Bank plc
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:





A E Southworth - Secretary


28 October 2024

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.

V M Plath
C M Plath

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:



A E Southworth - Secretary


28 October 2024

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.




Richard Taylor (Senior Statutory Auditor)
for and on behalf of DJH Audit Limited
Accountants
Statutory Auditors
The Exchange
5 Bank Street
Bury
BL9 0DN

29 October 2024

MORGENROT GROUP PLC (REGISTERED NUMBER: 00987162)

STATEMENT OF COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 APRIL 2024

2024 2023
Notes £    £   

REVENUE 3 11,335,424 10,091,186

Cost of sales (8,790,074 ) (7,858,568 )
GROSS PROFIT 2,545,350 2,232,618

Distribution costs (299,399 ) (279,400 )
Administrative expenses (1,917,320 ) (1,726,287 )
328,631 226,931

Other operating income 4 62,665 60,412
OPERATING PROFIT 6 391,296 287,343

Interest receivable and similar income 7 3,660 1,275
394,956 288,618

Interest payable and similar expenses 8 (53,565 ) (36,036 )
PROFIT BEFORE TAXATION 341,391 252,582

Tax on profit 9 (97,419 ) (58,473 )
PROFIT FOR THE FINANCIAL YEAR 243,972 194,109

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

243,972

194,109

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 1,226,507 1,196,474
1,226,507 1,196,474

CURRENT ASSETS
Inventories 13 2,101,095 1,720,498
Debtors 14 2,097,190 1,667,747
Cash at bank and in hand 60,639 28,495
4,258,924 3,416,740
CREDITORS
Amounts falling due within one year 15 (3,313,119 ) (2,589,087 )
NET CURRENT ASSETS 945,805 827,653
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,172,312

2,024,127

CREDITORS
Amounts falling due after more than one
year

16

(153,334

)

(233,342

)

PROVISIONS FOR LIABILITIES 20 (37,322 ) (25,101 )
NET ASSETS 1,981,656 1,765,684

CAPITAL AND RESERVES
Called up share capital 21 109,905 109,905
Share premium 10,403 10,403
Capital redemption reserve 2,250 2,250
Retained earnings 1,859,098 1,643,126
SHAREHOLDERS' FUNDS 1,981,656 1,765,684

The financial statements were approved by the Board of Directors and authorised for issue on 28 October 2024 and were signed on its behalf by:





C M Plath - Director


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 109,905 1,468,350 10,403 2,250 1,590,908

Changes in equity
Dividends - (19,333 ) - - (19,333 )
Total comprehensive income - 194,109 - - 194,109
Balance at 30 April 2023 109,905 1,643,126 10,403 2,250 1,765,684

Changes in equity
Dividends - (28,000 ) - - (28,000 )
Total comprehensive income - 243,972 - - 243,972
Balance at 30 April 2024 109,905 1,859,098 10,403 2,250 1,981,656

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 65,957 286,866
Interest paid (53,565 ) (35,432 )
Interest element of hire purchase or finance
lease rental payments paid

-

(604

)
Tax paid (54,055 ) (62,700 )
Net cash from operating activities (41,663 ) 188,130

Cash flows from investing activities
Purchase of property plant and equipment (106,350 ) (29,110 )
Interest received 3,660 1,275
Net cash from investing activities (102,690 ) (27,835 )

Cash flows from financing activities
Loan repayments in year (79,992 ) (79,992 )
Capital repayments in year - (7,945 )
Amounts introduced by directors 279,781 168,991
Amounts withdrawn by directors (397,919 ) (69,873 )
Net cash from financing activities (198,130 ) 11,181

(Decrease)/increase in cash and cash equivalents (342,483 ) 171,476
Cash and cash equivalents at beginning of
year

2

(311,532

)

(483,008

)

Cash and cash equivalents at end of year 2 (654,015 ) (311,532 )

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 341,391 252,582
Depreciation charges 76,317 66,733
Finance costs 53,565 36,036
Finance income (3,660 ) (1,275 )
467,613 354,076
Increase in inventories (380,597 ) (134,591 )
(Increase)/decrease in trade and other debtors (429,443 ) 12,912
Increase in trade and other creditors 408,384 54,469
Cash generated from operations 65,957 286,866

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 (714,654 ) (340,027 )
(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 (340,027 ) (488,557 )
(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 ) (342,483 ) (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
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

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
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Freehold property - 2% straight line on valuation
Land - Not provided
Office equipment and machinery - 25% on cost and 7.5% on cost
Fixtures and fittings - 25% on cost
Motor vehicles - 25% on reducing balance
Bar and pub equipment - 33% on cost

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 14,570 14,340
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 731,193 677,822
Social security costs 62,857 65,804
Other pension costs 39,468 37,172
833,518 780,798

The average number of employees during the year was as follows:
2024 2023

Administration and selling 21 19
Directors 2 2
23 21

During the year, a total of key management personnel compensation of £330,336 (2023: £282,966) was paid.

2024 2023
£    £   
Directors' remuneration 66,750 68,500

6. OPERATING PROFIT

The operating profit is stated after charging:

2024 2023
£    £   
Depreciation - owned assets 76,317 66,733
Auditors' remuneration 7,000 7,000

7. INTEREST RECEIVABLE AND SIMILAR INCOME
2024 2023
£    £   
Bank account interest 3,660 1,275

8. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Bank interest 28,177 10,342
Bank loan interest 25,388 25,090
Hire purchase interest - 604
53,565 36,036

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 85,199 54,054

Deferred tax 12,220 4,419
Tax on profit 97,419 58,473

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 341,391 252,582
Profit multiplied by the standard rate of corporation tax in the UK of 25%
(2023 - 19%)

85,348

47,991

Effects of:
Expenses not deductible for tax purposes - (171 )
Depreciation in excess of capital allowances 11,782 4,989
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 28,000 19,333

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 106,213
AMORTISATION
At 1 May 2023
and 30 April 2024 106,213
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 1,287,150 260,000 231,086
Additions - - 5,200
At 30 April 2024 1,287,150 260,000 236,286
DEPRECIATION
At 1 May 2023 442,828 - 224,365
Charge for year 25,743 - 3,907
At 30 April 2024 468,571 - 228,272
NET BOOK VALUE
At 30 April 2024 818,579 260,000 8,014
At 30 April 2023 844,322 260,000 6,721

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 192,780 120,022 745,758 2,836,796
Additions 28,000 - 73,150 106,350
At 30 April 2024 220,780 120,022 818,908 2,943,146
DEPRECIATION
At 1 May 2023 183,903 83,407 705,819 1,640,322
Charge for year 2,885 9,154 34,628 76,317
At 30 April 2024 186,788 92,561 740,447 1,716,639
NET BOOK VALUE
At 30 April 2024 33,992 27,461 78,461 1,226,507
At 30 April 2023 8,877 36,615 39,939 1,196,474

13. INVENTORIES
2024 2023
£    £   
Finished goods 2,101,095 1,720,498

14. DEBTORS
2024 2023
£    £   
Amounts falling due within one year:
Trade debtors 1,950,875 1,498,413
Other debtors 19,741 28,393
Prepayments and accrued income 44,809 55,316
2,015,425 1,582,122

Amounts falling due after more than one year:
Other debtors 81,765 85,625

Aggregate amounts 2,097,190 1,667,747

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) 794,670 420,027
Trade creditors 1,514,759 1,070,572
Other creditors 272,000 380,618
Corporation tax 85,199 54,055
Social security and other taxes 485,773 412,013
Directors' current accounts 109,768 201,906
Accrued expenses 50,950 49,896
3,313,119 2,589,087

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2024 2023
£    £   
Bank loans (see note 17) 153,334 233,342

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 714,654 340,027
Bank loan 80,016 80,000
794,670 420,027

Amounts falling due between one and two years:
Bank loans - 1-2 years 80,000 80,000

Amounts falling due between two and five years:
Bank loans - 2-5 years 73,334 153,342

18. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2024 2023
£    £   
Within one year 7,235 7,097
Between one and five years 11,824 17,558
19,059 24,655

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 714,654 340,027
Bank loans 233,350 313,342
948,004 653,369

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 25,101
Movement in the year 12,221
Balance at 30 April 2024 37,322

21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
1,099,050 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.