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REGISTERED NUMBER: 04123657 (England and Wales)















PEACHKEY LTD

Strategic Report, Report of the Director and

Financial Statements for the Year Ended 31 December 2023






PEACHKEY LTD (REGISTERED NUMBER: 04123657)






Contents of the Financial Statements
for the year ended 31 December 2023




Page

Company Information 1

Strategic Report 2 to 4

Report of the Director 5 to 8

Report of the Independent Auditors 9 to 11

Income Statement 12

Other Comprehensive Income 13

Balance Sheet 14

Statement of Changes in Equity 15

Cash Flow Statement 16

Notes to the Cash Flow Statement 17

Notes to the Financial Statements 18 to 25


PEACHKEY LTD

Company Information
for the year ended 31 December 2023







Director: D Balcombe





Secretary: B Balcombe





Registered office: First Floor
Saggar House
Princes Drive
Worcester
Worcestershire
WR1 2PG





Registered number: 04123657 (England and Wales)





Auditors: Cooper Parry Group Limited
New Derwent House
69-73 Theobalds Road
London
WC1X 8TA

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Strategic Report
for the year ended 31 December 2023

The director presents his strategic report for the year ended 31 December 2023.

Review of business
The company operates eleven McDonald's franchised restaurants in South Wales employing over 1,390 members of staff.

As a result of the 2023 menu and marketing strategy, alongside the execution of incremental price rises, the company has seen increased sales growth as the company continues to operate against the backdrop of significant macro-economic challenges.

Given the direct link between our approach to pricing, the external environment, and our success in relation to our customers, we will continue to remain close to understanding this relationship and look constantly to evaluate how our internal actions are impacting our customers.

Despite the net current liabilities position, and a fall in net assets from £2.96m in 2022 to £2.59 million in 2023, the strength of the business remains strong and the directors consider the company to have adequate resources to meet liabilities as they fall due.

Key performance indicators
Sales for the year amounted to £55.03 million, an increase of £6.54 million from 2022 giving an overall sales increase of approximately 13.48%. The growth in sales is predominantly due to a full year of trading from the store acquired in March 2022 and incremental price rises throughout the year.

The gross profit margin is 63.59% compared to 63.34% in 2022 and is in line with expectations.

Future developments
2023 economic trends are broadly expected to continue into 2024.

As in 2023, sales growth in 2024 will be predominantly driven by year on year pricing benefit. This will particularly benefit Q1 (Quarter 1) before we annualise price moves made in 2023. To counter any potential negative GC (Guest Count) impact from price rises, we have a strong marketing calendar, with particular focus on value at key parts of the year. The calendar also includes a higher number of innovative promotional pies and new McFlurry flavour variants, both of which drove strong incremental sales and visits in 2023. Given the uncertain market environment, we will as ever need to remain flexible and adaptive should we begin to see any risks to this plan.

We also expect to see continued incremental sales benefit in 2024 from the MyMcDonald's application, with a greater customer base engaged with the MyMcDonald's Rewards scheme, and refined CRM communications to encourage customer frequency.

Instores and Drive Thrus are likely to see similar levels and phasing of sales growth in 2024, as we move away from any lingering COVID-19 impact. The percentage of sales and phasing coming through McDelivery is likely to remain stable year on year.

The 2023 pricing strategy has been bold, utilising a front-loaded approach, with five pricing rounds overall. From this, circa 5% MBI (Menu Board Index) benefit will be carried into 2024.

The Price Strategy Group will continue to take a strategic, customer-led approach throughout 2024, for which four price moves are planned. Rather than utilising a front-loaded approach, the price rounds are expected to be more balanced in 2024, with the timing, scale and menu items included in the pricing recommendations leveraging the exciting marketing plan that is in place. As with recent years, the group will remain agile against the backdrop of a challenging external environment.

The 2024 pricing strategy will ensure gross margin growth, whilst maintaining the business' value proposition. The group will focus on driving sustainable growth - for example, building upon the work which has been done so far on value and delivery, and refining the long-term view of pricing and menu architecture.

The company also plans to acquire more restaurants should the opportunity arise.


PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Strategic Report
for the year ended 31 December 2023

Principal risks and uncertainties
The company is continually assessing all risks with an aim to mitigate any future threats these may have on the business.

Economic risk
Following some very challenging times, we are optimistic about the economic future. Customer confidence continues to rise and unemployment rates are falling. A cautious approach is still required as real disposable income continues to decline as the cost of living and interest rates continue to rise. Principal risks are increasing commodity prices, increased utility costs and labour rates adding pressure to margins with significant upward movements in interest rates that may also increase costs. The first mentioned risk is controlled by McDonald's collective purchasing initiatives.

The level of borrowing is such that interest rate increases remain manageable.

Supply Chain Inflation
We have continued to work at mitigating the impact of food and paper inflation within our 2024 outlook - this has resulted in further improvement with a range of 3% - 6% food and paper inflation now anticipated for the UK. We are also continuing to see increased levels of cost certainty, with an expectation that circa 40% of our costs will be secured by the end of December.

As with previous outlook, we expect a relatively flat profile through the year. The increases we are expecting continue to be driven by commodity price on particular categories, as well as market labour increases. The focus of McDonald's negotiations remains on assured supply and to put farmers and growers in a position to continue developing alongside the business.

Our 2024 Forecast is made up of two elements:
- Baseline inflation of circa 1.5% carry over from 2023 increases.
- In-year inflation of 1.5% - 4.5% on prices negotiated for 2024.

Regulatory risks
The company's operations demand a high level of compliance within a wide range of regulatory requirements. In particular:
- Health and safety
- Hygiene procedures
- Employment laws
- Licensing
The above, along with a number of other areas, are monitored in detail by McDonald's, as being in the fast food industry brings a high level of regulatory concerns.

Consumer taste
Any material changes in the way the consumer views the fast food industry could have an adverse effect on the company. However, this can also work in the opposite direction and could assist the company to achieve growth. As a result, the company focuses, in detail, on recognising demographic trends, ensuring innovation and the use of the freshest and highest quality products through its stores. The company has strict policies to ensure that all stores are maintaining the McDonald's ethos.

Competitors
The fast food market is a very competitive market, with a high number of large competitors trading in the sector. In order to remain as one of the main players, McDonald's have dedicated teams who focus on ensuring they remain a leading company within the market. This allows them to compete with other large fast food chains.

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control, hence we are constantly assessing our plans in line with the current environment.


PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Strategic Report
for the year ended 31 December 2023

Section 172(1) statement
The board of directors take into account the likely consequences of long-term decisions; build relationships with stakeholders; understand the importance of engaging with our employees; understand the impact of our operations on the communities within which we operate; and attribute importance to behaving as a responsible business.

The board of directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 December 2023. In particular by reference to the approval of our business plan, which is updated on an annual basis. Our business plan was designed to have a long-term beneficial impact on the company and to contribute to its success in delivering high quality quick-service food.

Our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach the to pay and benefits our employees receive. The health, safety and wellbeing of our employees is one of our primary considerations in the way we do business.

As the Board of directors, our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours, and in doing so, will contribute to the delivery of our plan.

On behalf of the board:





D Balcombe - Director


5 November 2024

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Report of the Director
for the year ended 31 December 2023

The director presents his report with the financial statements of the company for the year ended 31 December 2023.

Principal activity
The principal activity of the company in the year under review was that of operation of fast food restaurants in accordance with the franchise agreements granted by McDonald's Restaurants Limited.

Dividends
The following interim dividends were paid in the year:

A Ordinary shares

05 April 2023 £739.75 per share
11 October 2023 £688.93 per share

B Ordinary shares

05 April 2023 £2,790.48 per share
11 October 2023 £2,630.52 per share

The total distribution of dividends for the year ended 31 December 2022 will be £242,646.

Research and development
The company does not carry out any independent research and development. However the franchisor, McDonald's Restaurants Limited, carries out its own research and development on behalf of all franchisees. The company makes a contribution towards this through its existing payments to the franchisor.

Director
D Balcombe held office during the whole of the period from 1 January 2023 to the date of this report.

Going concern
The company is in a net current liabilities position at the balance sheet date, however this is a reflection on the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting in doing so they have considered the period from the date of this report until 31 December 2025. 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.

Employment of disabled persons
The company operates a policy of giving full and fair consideration to employment applications from disabled persons and to the continued employment and training of employees who become disabled.

Provision of information to employees
The company has a system for providing employees with information of concern to them . It also consults employees on a regular basis so that their views can be taken into account in making decisions affecting them. It regularly to explains to employees the financial and economic factors affecting the performance of the company and makes them aware of the provision of training, career development and promotion of disabled employees.

Engagement with employees
Our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach the to pay and benefits our employees receive. The health, safety and wellbeing of our employees is one of our primary considerations in the way we do business.

Engagement with suppliers, customers and others
The board of directors take into account the likely consequences of long-term decisions; build relationships with stakeholders; understand the impact of our operations on the communities within which we operate; and attribute importance to behaving as a responsible business.


PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Report of the Director
for the year ended 31 December 2023

Statement of corporate governance arrangements
The company is owned and controlled by a single director. By reference to the Corporate Governance Guidance and Principles for Unlisted Companies in the UK, published by the Institute of Directors, the director has established a framework of company processes and attitudes that add value to the business, help build its reputation and ensure its long-term continuity and success. This framework aligns with the business system and processes established by the franchisor and contributes to the continued success of the company.

Streamlined energy and carbon reporting
The McDonald's restaurants attributed to the company's greenhouse gas emissions, reportable under SECR from 1st January 2023 - 31st December 2023, were 1,602 tonnes of carbon dioxide equivalent (tCO2e). These include emissions associated with electricity and natural gas consumption. The number of sites contributing to this report has not changed from 2022 to 2023. The company's total greenhouse gas emissions increased by 44.1% compared to revised 2022 figures, because purchased electricity energy consumption (kWh) has increased by 19.1%, from 2022 to 2023 and natural gas energy consumption (kWh) has increased by 8.1%, from 2022 to 2023.

Notable factors that could have contributed to the movement in emissions are as follows:
- Increase in productivity (14.6% increase in revenue) which translated to an increase in total energy consumption.
- Revision of methodology to align consumption to McDonald's AI Track energy consumption figures for FY2023.
- The carbon intensity of the grid electricity increased in 2023 for the first time in a few years, by 7%
- The methodology for calculating electricity emissions was adjusted to reflect good practice for the inclusion of electrical transport and distribution of losses (T&D losses) under the SECR regulations.

As per SECR guidelines, the company's emission intensity is calculated as the ratio of annual emissions (tCO2e) to the turnover (in £million). For FY 2023, this resulted in an emission intensity of 29.13 tCO2e per £million, which represents a 9.5% increase compared to the previous year (26.60 tCO2e per £million).

Greenhouse Gas Emissions
Table 1: Greenhouse gas emissions by year (tCO2e) - location-based



Emissions Source


2022
2022 -
revised
(a


)


2023


% share


% change
Electricity 1,058 1,155 1467 91.6 27.0
Natural Gas 121 121 131 8.2 8.3
Purchased fuel (LPG) - - - - -
Refrigerants - - - - -
Transportation - direct - - 3 0.2 -
Transportation - indirect 1 1 1 0.1 -
Total Emissions (tC02e) 1,180 1,277 1,602 100 44.1
Turnover (£m) 48 48 55 - 14.6
Intensity (tC02e per £m) 24.58 26.60 29.13 - 9.5

Location-based reporting uses a national carbon emissions factor to calculate the emissions from the generation of electricity, reflecting the diverse source of electricity generation supplied to the national grid.

(a)The emissions reported for electricity in 2022 has been revised to include Transmission and Distribution losses(T&D) [UK Greenhouse Gas Conversion Factors (publishing.service.gov.uk) page 7 Transport and Distribution].

Table 2: Greenhouse gas emissions by scope (tonnes CO2e) - location-based

Emissions Source Scope 1 Scope 2 Scope 3 Total
Electricity - 1,350 117 1,467
Natural Gas 131 - - 131
Purchased fuel (LPG) - - -
Refrigerants - - - -
Transportation 3 - 1 4
Total Emissions (tC02e) 134 1,350 118 1,602
Share of Total % 8.4 84.3 7.4 100

Scope 1: Natural gas and purchased fuel (LPG). Scope 2: Electricity (generation). Scope 3: Losses from electricity distribution and transmission (T&D). This only includes emissions reportable under SECR and may not reflect the entire carbon footprint of the organisation.


PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Report of the Director
for the year ended 31 December 2023





Energy Consumption
Table 3: Energy consumption per fuel type (kWh)

Emissions Source 2022 2023(b ) % share % change
Electricity 5,471,690 6,518,883 89.9 19.1
Natural Gas 660,270 713,742 9.8 8.1
Purchased fuel (LPG) - - - -
Refrigerants - - - -
Transportation - direct - 10,618 0.2 -
Transportation - indirect 2,906 4,424 0.1 52.2
Total 6,134,866 7,247,667 100 18.1
(b)Includes extrapolation carried out by Aligned Incentives.


Boundary, Methodology and Exclusions
An 'operational control' approach has been used to define the Greenhouse Gas emissions boundary[c].

This approach captures emissions associated with your operations in the restaurants. This report covers UK operations only, as required by SECR for Non-Quoted Large Companies.

This information was collected and reported in line with the methodology set out in the UK Government's Environmental Reporting Guidelines, 2019.

Emissions have been calculated using the latest conversion factors provided by the UK Government. No other material omissions from the mandatory reporting scope. For Refrigerant emissions, GWP conversion factors have been used [High-GWP Refrigerants | California Air Resources Board, Greenhouse Gas Inventory Guidance: Fugitive Emissions (epa.gov)]

The company's 2022 electricity emissions have been revised. This update and the inclusion of Transport and Distribution factors for emissions calculation is to reflect good practice in UK reporting as detailed in the GHG Conversion Factors [Greenhouse gas reporting: conversion factors 2023 - GOV.UK (www.gov.uk)]. This revision also incorporates updated conversion factors.

Energy consumption (in kWh) for periods 1st January 2023 - 31st December 2023 have been used to calculate emissions for the company's FY2023, ending in December 2023.

2023 consumption data from McDonald's AI Track were used for the gas, electricity, purchased fuel and refrigerants figures. Gas and electricity consumption includes extrapolation carried out by Aligned Incentives.

[c] An operational control approach to GHG emissions boundary is defined as: "Your organisation has operational control over an operation if it, or one of its subsidiaries, has the full authority to introduce and implement its operating policies at the operation".

Energy Efficiency Initiatives
The company has continued to seek and progress energy efficiency measures, within both the work processes and the use of work equipment. McDonald's are actively taking part in mandatory compliance schemes, such as the Energy Savings Opportunity Scheme, TCFD and considering the implementation of recommendations outlined in the ESOS audit reports.

The following approaches to energy efficiency are being undertaken by McDonald's Restaurants Limited and will be expanded over the following years:
- Baselining resource use by bringing online increased effort to collate the data on a range of resources.
- Implementation Strategy being developed and deployed to create significant energy and carbon reduction.
- Engagement Strategy with the Supply chain to reduce the associated emissions further.
- Developing Metrics and Targets to reflect performance across our portfolio at the most granular level and more in depth data tracking of the use of resources.
- Governance including Board oversight, culture, training and incentives being developed.

The following approaches to energy efficiency being undertaken by the company and will be expanded over the following years include:
- LED lighting
- Electric car charging points

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Report of the Director
for the year ended 31 December 2023


Statement of director's responsibilities
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors
The audit business of Haines Watts Birmingham LLP was acquired by Cooper Parry Group Limited on 14 November 2023. Haines Watts Birmingham LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place.

The auditors, Cooper Parry Group Limited, are deemed re-appointed under Section 487(2) of the Companies Act 2006.

On behalf of the board:





D Balcombe - Director


5 November 2024

Report of the Independent Auditors to the Members of
Peachkey Ltd

Opinion
We have audited the financial statements of Peachkey Ltd (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
_
In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, 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 Director 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 Director have been prepared in accordance with applicable legal requirements.

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 Director.

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 director's remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Report of the Independent Auditors to the Members of
Peachkey Ltd


Responsibilities of director
As explained more fully in the Statement of Director's Responsibilities set out on page eight, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the industry, we identified that the principal risks of non-compliance related to breaches of health and safety, including food hygiene. We considered the extent to which non-compliance might have a material affect on the financial statements.

We also considered those laws and regulations that have a direct impact on preparation of the financial statements, such as the Companies Act 2006. We examined management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of overriding of controls) and determined that the principal risks were relating to management bias in accounting estimates, in particular those of accrued liabilities and the useful life of tangible assets.

We also discussed with management the possibility of non-compliance with health and safety and food hygiene regulations and reviewed the management controls in place to detect such irregularities. Audit procedures included challenging assumptions made by management in their significant accounting estimates. There are inherent limitations in the Audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions described in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one due to error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

In assessing the potential risks of material misstatement we obtained an understanding of; the entities operations, including the nature of its revenue sources and services and of its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement.

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.

Report of the Independent Auditors to the Members of
Peachkey Ltd


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.




Nicola Pearson ACA (Senior Statutory Auditor)
for and on behalf of Cooper Parry Group Limited
New Derwent House
69-73 Theobalds Road
London
WC1X 8TA

5 November 2024

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Income Statement
for the year ended 31 December 2023

2023 2022
Notes £ £

Turnover 3 55,027,102 48,491,219

Cost of sales (20,033,900 ) (17,779,129 )
Gross profit 34,993,202 30,712,090

Administrative expenses (34,961,470 ) (32,330,584 )
Operating profit/(loss) 5 31,732 (1,618,494 )

Interest receivable and similar income - 4,086
31,732 (1,614,408 )

Interest payable and similar expenses 6 (120,336 ) (71,719 )
Loss before taxation (88,604 ) (1,686,127 )

Tax on loss 7 (39,781 ) 283,538
Loss for the financial year (128,385 ) (1,402,589 )

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Other Comprehensive Income
for the year ended 31 December 2023

2023 2022
Notes £ £

Loss for the year (128,385 ) (1,402,589 )


Other comprehensive income - -
Total comprehensive loss for the year (128,385 ) (1,402,589 )

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Balance Sheet
31 December 2023

2023 2022
Notes £ £ £ £
Fixed assets
Intangible assets 9 2,569,668 2,801,616
Tangible assets 10 3,477,222 4,054,059
Investments 11 13,750 13,750
6,060,640 6,869,425

Current assets
Stocks 12 293,537 279,926
Debtors 13 599,158 728,223
Cash at bank and in hand 2,316,918 2,379,903
3,209,613 3,388,052
Creditors
Amounts falling due within one year 14 5,541,696 6,855,035
Net current liabilities (2,332,083 ) (3,466,983 )
Total assets less current liabilities 3,728,557 3,402,442

Creditors
Amounts falling due after more than one year 15 (707,314 ) -

Provisions for liabilities 19 (428,055 ) (438,193 )
Net assets 2,593,188 2,964,249

Capital and reserves
Called up share capital 20 100 100
Retained earnings 21 2,593,088 2,964,149
Shareholders' funds 2,593,188 2,964,249

The financial statements were approved by the director and authorised for issue on 5 November 2024 and were signed by:





D Balcombe - Director


PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Statement of Changes in Equity
for the year ended 31 December 2023

Called up
share Retained Total
capital earnings equity
£ £ £
Balance at 1 January 2022 100 4,514,738 4,514,838

Changes in equity
Dividends - (148,000 ) (148,000 )
Total comprehensive loss - (1,402,589 ) (1,402,589 )
Balance at 31 December 2022 100 2,964,149 2,964,249

Changes in equity
Dividends - (242,676 ) (242,676 )
Total comprehensive loss - (128,385 ) (128,385 )
Balance at 31 December 2023 100 2,593,088 2,593,188

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Cash Flow Statement
for the year ended 31 December 2023

2023 2022
Notes £ £
Cash flows from operating activities
Cash generated from operations 1 1,881,640 1,980,953
Interest paid (120,336 ) (71,719 )
Tax paid 72,138 (264,707 )
Net cash from operating activities 1,833,442 1,644,527

Cash flows from investing activities
Purchase of intangible fixed assets - (90,000 )
Purchase of tangible fixed assets (685,139 ) (1,976,678 )
Purchase of fixed asset investments - (1,250 )
Sale of tangible fixed assets 10,700 -
Interest received - 4,086
Net cash from investing activities (674,439 ) (2,063,842 )

Cash flows from financing activities
New loans in year - 869,000
Loan repayments in year (1,051,641 ) (1,594,928 )
Amount introduced by directors 242,676 148,000
Amount withdrawn by directors (170,347 ) (147,105 )
Equity dividends paid (242,676 ) (148,000 )
Net cash from financing activities (1,221,988 ) (873,033 )

Decrease in cash and cash equivalents (62,985 ) (1,292,348 )
Cash and cash equivalents at beginning of year 2 2,379,903 3,672,251

Cash and cash equivalents at end of year 2 2,316,918 2,379,903

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Cash Flow Statement
for the year ended 31 December 2023

1. Reconciliation of loss before taxation to cash generated from operations

2023 2022
£ £
Loss before taxation (88,604 ) (1,686,127 )
Depreciation charges 1,482,311 2,040,045
Loss on disposal of fixed assets 913 -
Finance costs 120,336 71,719
Finance income - (4,086 )
1,514,956 421,551
Increase in stocks (13,611 ) (110,489 )
Decrease/(increase) in trade and other debtors 7,008 (124,134 )
Increase in trade and other creditors 373,287 1,794,025
Cash generated from operations 1,881,640 1,980,953

2. Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2023
31/12/23 1/1/23
£ £
Cash and cash equivalents 2,316,918 2,379,903
Year ended 31 December 2022
31/12/22 1/1/22
£ £
Cash and cash equivalents 2,379,903 3,672,251


3. Analysis of changes in net (debt)/funds

At 1/1/23 Cash flow At 31/12/23
£ £ £
Net cash
Cash at bank and in hand 2,379,903 (62,985 ) 2,316,918
2,379,903 (62,985 ) 2,316,918
Debt
Debts falling due within 1 year (2,562,609 ) 1,758,955 (803,654 )
Debts falling due after 1 year - (707,314 ) (707,314 )
(2,562,609 ) 1,051,641 (1,510,968 )
Total (182,706 ) 988,656 805,950

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements
for the year ended 31 December 2023

1. Statutory information

Peachkey Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. Accounting policies

Basis of preparing the financial statements
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.

Going concern
The company is in a net current liabilities position at the balance sheet date, however this is a reflection on the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting in doing so they have considered the period from the date of this report until 31 December 2025. 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.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover is measured at the fair value of the consideration received or receivable for goods at its restaurants in the ordinary course of the company's activities. Turnover is shown net of discounts and Value Added Tax.

The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the company, and specific criteria have been met for each of the company's activities.

Franchise rights and fees
Franchise rights and fees, being the amounts paid on acquisition of restaurants are being written off evenly over the terms of the franchise agreements.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Short leasehold - at varying rates on cost
Restaurant equipment - at varying rates on cost
Fixtures and fittings - at varying rates on cost
Motor vehicles - at varying rates on cost

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

Cash at bank and in hand
Cash at bank and in hand are basic financial assets comprising of cash in hand, demand deposits with bank, other short-term liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within current liabilities.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 balance sheet date.


PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

2. Accounting policies - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss 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.

Impairment of fixed assets
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to each asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted cost of the future holiday entitlement so accrued at the Balance Sheet date.

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

2. Accounting policies - continued

Financial instruments
The Company only enters into basic financial instruments that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

For financial assets measured at amortised cost, the impairment cost is measured at the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the assets effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Finance costs
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Dividends
Equity dividends are recognised when they legally become payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Judgements in applying accounting policies and key sources of estimation uncertainty
In the process of applying the company's accounting policies, management are required to make certain estimates and judgements. The key estimates and judgements are as follows:

Depreciation and residual values
The director has reviewed the asset lives and associated residual values of all fixed asset classes, and has concluded that asset lives and residual values are appropriate.

Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted cost of the future holiday entitlement so accrued at the Balance Sheet date.

3. Turnover

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2023 2022
£ £
Food 54,203,683 47,721,301
Non product 823,419 769,918
55,027,102 48,491,219

The whole of turnover is derived from the United Kingdom.

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

4. Employees and directors
2023 2022
£ £
Wages and salaries 15,258,291 13,699,560
Social security costs 604,090 556,613
Other pension costs 149,883 131,133
16,012,264 14,387,306

The average number of employees during the year was as follows:
2023 2022

Crew labour 1,348 1,215
Management 45 47
1,393 1,262

2023 2022
£ £
Director's remuneration - -

5. Operating profit/(loss)

The operating profit (2022 - operating loss) is stated after charging:

2023 2022
£ £
Hire of plant and machinery 10,879 22,897
Other operating leases 6,212,173 6,239,466
Depreciation - owned assets 1,250,363 1,807,347
Loss on disposal of fixed assets 913 -
Franchise rights amortisation 216,948 216,948
Franchise fees amortisation 15,000 15,750
Auditors' remuneration 10,800 10,000
Taxation compliance services 2,130 3,950
Other non- audit services 25,901 21,597

6. Interest payable and similar expenses
2023 2022
£ £
Bank interest 120,336 71,719

7. Taxation

Analysis of the tax charge/(credit)
The tax charge/(credit) on the loss for the year was as follows:
2023 2022
£ £
Current tax:
UK corporation tax 49,919 (461,770 )

Deferred tax (10,138 ) 178,232
Tax on loss 39,781 (283,538 )

UK corporation tax has been charged at 25% (2022 - 19%).

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

7. Taxation - continued

Reconciliation of total tax charge/(credit) 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:

2023 2022
£ £
Loss before tax (88,604 ) (1,686,127 )
Loss multiplied by the standard rate of corporation tax in the UK of 25% (2022 -
19%)

(22,151

)

(320,364

)

Effects of:
Expenses not deductible for tax purposes 2,125 1,472
Capital allowances in excess of depreciation - (142,878 )
Depreciation in excess of capital allowances 73,510 -
Deferred taxation (10,138 ) 178,232
Change in UK corporation tax rate (3,565 ) -
Total tax charge/(credit) 39,781 (283,538 )

The UK's main corporation tax rate increased from 19% to 25%, effective from 1 April 2023. The effective rate of tax is 23.5%.

Deferred tax has been calculated at 25% (2022 - 25%).

8. Dividends
2023 2022
£ £
Ordinary A shares of £1 each
Interim 107,151 74,000
Ordinary B shares of £1 each
Interim 135,525 74,000
242,676 148,000

9. Intangible fixed assets
Franchise Franchise
rights fees Totals
£ £ £
Cost
At 1 January 2023
and 31 December 2023 4,669,362 330,000 4,999,362
Amortisation
At 1 January 2023 2,054,871 142,875 2,197,746
Amortisation for year 216,948 15,000 231,948
At 31 December 2023 2,271,819 157,875 2,429,694
Net book value
At 31 December 2023 2,397,543 172,125 2,569,668
At 31 December 2022 2,614,491 187,125 2,801,616

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

10. Tangible fixed assets
Fixtures
Short Restaurant and Motor
leasehold equipment fittings vehicles Totals
£ £ £ £ £
Cost
At 1 January 2023 112,812 9,679,933 6,900,635 139,007 16,832,387
Additions - 640,134 45,005 - 685,139
Disposals - - - (16,995 ) (16,995 )
At 31 December 2023 112,812 10,320,067 6,945,640 122,012 17,500,531
Depreciation
At 1 January 2023 39,848 7,573,495 5,095,175 69,810 12,778,328
Charge for year 9,543 770,158 454,012 16,650 1,250,363
Eliminated on disposal - - - (5,382 ) (5,382 )
At 31 December 2023 49,391 8,343,653 5,549,187 81,078 14,023,309
Net book value
At 31 December 2023 63,421 1,976,414 1,396,453 40,934 3,477,222
At 31 December 2022 72,964 2,106,438 1,805,460 69,197 4,054,059

11. Fixed asset investments
Unlisted
investments
£
Cost
At 1 January 2023
and 31 December 2023 13,750
Net book value
At 31 December 2023 13,750
At 31 December 2022 13,750

Fixed asset investments consists of 13,750 (2022 - 13,750) ordinary shares of £1 each in Fries Holding Company Limited, a company registered in Guernsey. The investments are included in the accounts at cost.

12. Stocks
2023 2022
£ £
Stocks 293,537 279,926

13. Debtors: amounts falling due within one year
2023 2022
£ £
Trade debtors 1,782 251
Other debtors 26,614 25,789
Corporation tax 411,851 533,908
Prepayments 158,911 168,275
599,158 728,223

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

14. Creditors: amounts falling due within one year
2023 2022
£ £
Bank loans and overdrafts (see note 16) 803,654 2,562,609
Trade creditors 2,187,146 1,523,368
Social security and other taxes 179,600 113,858
VAT 1,281,389 1,481,394
Other creditors 549,035 29,133
Directors' current accounts 73,262 933
Accrued expenses 467,610 1,143,740
5,541,696 6,855,035

15. Creditors: amounts falling due after more than one year
2023 2022
£ £
Bank loans (see note 16) 707,314 -

16. Loans

An analysis of the maturity of loans is given below:

2023 2022
£ £
Amounts falling due within one year or on demand:
Bank loans 803,654 2,562,609

Amounts falling due between one and two years:
Bank loans - 1-2 years 359,396 -

Amounts falling due between two and five years:
Bank loans - 2-5 years 347,918 -

The loans are due for repayment in equal monthly instalments with terms as stated above. They are unsecured with interest charged at rates between 1% and 1.9% above the Bank of England base rate.

17. Leasing agreements

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£ £
Within one year 1,133,172 1,022,380
Between one and five years 4,346,935 4,014,977
In more than five years 9,912,318 11,488,239
15,392,425 16,525,596

Lease payments recognised as an expense during the year £6,212,173 (2022 - £6,239,466).

The Company's restaurant premises are leased from McDonalds Restaurants Limited under non-cancellable leases with expiry terms of more than five years. Rent is calculated as a percentage of sales above base, the above operating lease commitment only relates to base rent. This is due to sales being an unknown figure and therefore not possible to calculate.

PEACHKEY LTD (REGISTERED NUMBER: 04123657)

Notes to the Financial Statements - continued
for the year ended 31 December 2023

18. Financial instruments

Financial Assets 2023 2022
£    £   
Financial assets as an equity instrument 13,750 13,750
Financial assets that are debt instruments measured at amortised cost 2,345,314 2,405,943
2,359,064 2,419,693


Financial Liabilities 4,788,020 5,259,783
4,788,020 5,259,783

19. Provisions for liabilities
2023 2022
£ £
Deferred tax 428,055 438,193

Deferred tax
£
Balance at 1 January 2023 438,193
Credit to Income Statement during year (10,138 )
Balance at 31 December 2023 428,055

20. Called up share capital

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £ £
75 Ordinary A £1 75 75
25 Ordinary B £1 25 25
100 100

21. Reserves
Retained
earnings
£

At 1 January 2023 2,964,149
Deficit for the year (128,385 )
Dividends (242,676 )
At 31 December 2023 2,593,088

22. Related party disclosures

During the year, total dividends of £107,151 (2022 - £74,000) were paid to the director. As at the balance sheet date, the balance owed to the director by the company amounts to £73,262 (2022 - £933).

This balance bears no fixed rate of interest and is repayable on demand.

23. Ultimate controlling party

The ultimate controlling party is D Balcombe.