The directors present the strategic report for the year ended 30 June 2023.
The principal activity of the group during the year was the operation of unlicensed cafes and restaurants.
The directors aim to present a balanced and comprehensive review of the performance and development of the group during the year and its position at 30 June 2023. The review is consistent with the size and nature of the business and is written in the context of the risks and uncertainties it faces.
The directors consider that the key performance indicators are those that communicate the financial performance and strength of the group as a whole, turnover, gross profit and trading EBITDA.
The group's key performance indicators during the current and prior year were as follows:
| Year ended | Year ended |
| 30-Jun-23 | 30-Jun-22 |
| £ | £ |
Turnover | 19,620,150 | 17,750,690 |
Gross profit | 13,125,428 | 12,304,827 |
Trading EBITDA | 791,025 | 2,241,728 |
Trading EBITDA % | 4.0% | 12.6% |
|
|
|
The year ended 30 June 2023 was another record year of sales for the Bob & Berts Group, with sales of £19.6m. The group continued its expansion in both England and Scotland with the opening of an additional two stores (Perth and Carlisle). Further expansion of two stores in England (Blackpool and Wakefield) and one store in Northern Ireland has been completed in the first half of FY24.
During the year the group established a strong presence in England and by the year end had five sites opened with a further two sites scheduled to open in the first quarter of FY24.
The group’s continued expansion, including into England, has meant that there has been investment in infrastructure, specifically senior operational management, a stock management system, as well as an English based distributor for the English sites. These significant investment costs of £1.8m ahead of stores opening will benefit the group from FY24 onward.
Whilst sales and transactions remained strong for the group, this year’s accounts show a loss of £346,327. This was largely driven by an increase in cost of sales. Management have reacted well to this by decoupling the supply chain in England from the rest of the business. This has seen a significant margin improvement for the business in the first six months of FY24.
In assessing the performance of the stores, management measure performance against an adjusted trading profit before tax and depreciation (EBITDA). For the year the group posted an EBITDA of £791K.
Looking ahead the directors foresee that there is a stabilisation with regards food and drink inflation and energy costs. Store sales have remained strong throughout the current economic downturn, which demonstrates the strength of the brand and gives management confidence that sales for FY24 will continue to grow. The actions taken by management and significant investment for FY24 have had a positive impact and will allow the group to continue to grow profits into FY24 and onwards.
In terms of new site openings, the group has developed a strong pipeline of potential new stores. The group will have achieved their goal of opening their 30th store during FY24 with a total of four stores added to the business. Beyond FY24 the business has developed the structure and store pipeline to at least double in size over the next five years.
The key risks and uncertainties facing the group are considered to be:
1. Consumer Confidence
The group relies on consumer spend to deliver profits and is therefore sensitive to the wider economy. An economic downturn may lead to lower consumer spend in stores.
This risk is mitigated by the fact that the current offer and service is good value for money and the directors believe that this will provide the required resilience should there be an economic downturn.
2. Cost Inflation
The hospitality sector has seen significant cost pressures:
Food and drink inflation
Utilities inflation
Labour inflation
Given the group wants to deliver value for money these costs need to be tightly managed.
This risk is mitigated by:
Food and Drink - the group has taken steps to decouple its English regional supply chain from the remainder of the group and has negotiated strong supplier contracts for the next 12-24 months. As the group grows the attractiveness of the scale of supply means that it will be in a strong place to get further agreements in place.
Utilities - 95% of energy costs are in fixed contract through to 2027.
Wages - the group regularly benchmarks itself against competitors in the industry and continues to be a middle to top end payer.
The group will continue to monitor all elements of supply chain and labour costs with a view to achieving the most efficient and cost-effective model to continue to drive good value for money.
The implementation of a stock management system which focuses on utilisation and wastage.
3. Health & Safety and Food Safety
The health and safety of all guests and employees is a key concern and and the group is required to comply with all health and safety legislation including food safety.
This risk is mitigated by:
All government guidance with regards Health & Safety and Food Safety is followed.
Strong health & Safety and food safety policies and controls in place.
The group invests heavily in the training of employees with regard to these policies.
A third party specialist regularly monitors and audits the group's health and safety and food safety policies and controls.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2023.
The results for the year are set out on page 11.
Ordinary dividends were payable amounting to £100,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The auditor, GMcG BELFAST, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Bob & Berts Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where we are required to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing potential risks of material misstatement in respect of irregularities, including fraud and non-compliances with laws and regulations, we considered the following:
The nature of the industry and sector, control environment and business performance, including the company’s remuneration policies for directors, bonus levels and performance targets, if any;
Results of our enquiries of management about their own identification and assessment of the risks of irregularities;
Any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to:
Identifying, evaluating and complying with laws and regulations and whether they were aware of any instance of non-compliance;
Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
The internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
The matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud in revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, and local tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.
Our procedures to respond to the risks identified included the following:
Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
Enquiring of management concerning actual and potential litigation and claims;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
Reading minutes of meetings of those charged with governance and reviewing correspondence with tax authorities; and
In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,612k (2022 - £1,345k). The loss in the company reflects the central, head office and borrowing costs of the group.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Bob & Berts Group Limited (“the company”) is a private limited company domiciled and incorporated in Northern Ireland. The registered office is 15 Duke Street, Ballymena, Co Antrim, BT43 6BL.
The group consists of Bob & Berts Group Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Bob & Berts Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
These financial statements have been prepared on the going concern basis, notwithstanding the fact that the group incurred as loss of £346,327 in the year ended 30 June 2023. The loss was a result of several contributing factors and, in the period since the year end, trading performance has improved and the group has returned to profit. At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future 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 the 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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Capitalisation of staff costs
Directly attributable costs in relation to store fit-outs include employee costs that are capitalised, only when it is probably that future economic benefits that are attributable to the asset will flow to the entity, the cost of the asset can be measured reliably and the costs are directly attributable to the creation of the asset. Capitalisation of costs ceases when the asset is capable of operating in the manner intended by management.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Intangible assets are measured at cost less any accumulated amortisation over the useful life of the asset and any accumulated impairment losses. Both the useful life and the impairment of such assets involves some estimation uncertainty.
Tangible assets are measured at cost less any accumulated depreciation over the useful life of the asset and any accumulated impairment losses. Both the useful life and the impairment of such assets involves some estimation uncertainty.
Judgements are made in relation to the calculation of certain aspects of the year end tax provisions and the respective tax charge. The management used external professional advice to support the year end provisions.
All turnover is derived in the United Kingdom from the group's principal activity.
Opening costs in the year relate to the cost of opening stores in Perth, Carlisle, Bury, Blackpool and Wakefield.
Opening costs include £87,394 (£124,746) of employee costs included as staff remuneration in note 8.
Earnings before interest, taxation, depreciation, amortisation, exceptional and non-recurring items was £791,025 (2022 - £2,241,728).
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 3).
Directors' remuneration includes £74,200 (2022 - £64,921) of costs that have been capitalised and included as additions to leasehold improvements in note 13.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Staff remuneration includes £106,722 (2022 - £89,442) of costs that have been capitalised and included as additions to leasehold improvements in note 13.
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
An increase in the UK corporation tax rate from 19% to 25% came into effect from 1 April 2023.
This will have a consequential effect on the group's future tax charge.
Dividends due for payment will be paid after the company has received sufficient distributions from its subsidiary companies. On a consolidated basis the group headed by the company has sufficient distributable reserves to make the payment.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Staff remuneration costs of £106,722 (2022 - £89,442) have been capitalised and included in leasehold improvement additions of the group.
Details of the company's subsidiaries at 30 June 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Bank loans are secured by an unlimited cross company guarantee between Bob & Berts Group Limited and its subsidiary companies, supported by a debenture held against each company that is subject to the guarantee.
Obligations under finance leases are secured upon the assets acquired.
Bank borrowings are secured by an unlimited cross company guarantee between Bob & Berts Group Limited and its subsidiary companies, supported by a debenture held against each company that is subject to the guarantee.
Other borrowings relates to an unsecured fixed rate loan note of £500,000. Interest is charged at 8% per annum and payable on a quarterly basis. The loan note is repayable in two six monthly instalments commencing February 2024.
Interest on bank loans is charged at between 2.5% and 2.95% per annum over Base Rate and is payable on a quarterly basis. Capital is repaid by monthly instalments, with all instalments falling due for payment within five years of the balance sheet date.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Ordinary shares have full voting rights, and rights to dividends and capital distributions, including on winding up. The shares do not confer any rights of redemption.
Ordinary A shares have full voting and dividend rights. The shares have priority over the ordinary shares in respect of a long term dividend and distributions on an exit or winding up in accordance with the company Articles of Association. The shares do not confer any rights of redemption.
Ordinary B shares have full voting and dividend rights. The shares have priority over the ordinary shares in respect of a long term dividend and distributions on an exit or winding up in accordance with the company's Articles of Association. The shares do not confer any rights of redemption.
Ordinary C shares do not have rights to vote or participate in a distribution of dividends. The shares have restricted rights to participate in a distribution on an exit or winding up in accordance with the company's Articles of Association. The shares do not confer any rights of redemption.
The share premium account represents the difference between the nominal value of shares issued and the value of consideration received (net of professional fees).
Other reserves represents the difference between the nominal value of shares issued as part of a group reconstruction and the nominal value of the shares received in exchange.
Profit and loss reserves represent the accumulated profits of the group.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The key management personnel of the group is considered to be the directors. Details of directors' remuneration is disclosed in note 7.
In a prior year the company issued an unsecured fixed rate loan note of £1,000,000 to an owner holding a participating interest in the company. During the year the company repaid £500,000 of the loan note. Interest charged on the loan note during the year was £66,630. The entire loan note outstanding at 30 June 2023 is £500,000 and is repayable in two six monthly instalments commencing February 2024. In addition, the same entity charged the company £57,682 (2022 - £56,002) in management charges during the year and a dividend was payable to this entity of £95,018. There was an amount due to this entity of £95,018 as at 30 June 2023.
Ostara Consultancy Limited is a company registered in United Kingdom that is significantly influenced by a director of the company. During the year the company was charged £18,000 (2022 - £18,000) by Ostara Consultancy Limited for consultancy services.
The company has taken advantage of the exemption from disclosing related party transactions with other wholly owned group companies.
Dividends totalling £4,982 (2022 - £0) were payable in the year in respect of shares held by the company's directors.