43 false false false false true false false false false false false true false false false false false false 2022-11-01 Sage Accounts Production Advanced 2023 - FRS102_2023 1,806,417 15,192 25,820 49,447 xbrli:pure xbrli:shares iso4217:GBP NI648509 2022-11-01 2023-12-31 NI648509 2023-12-31 NI648509 2022-10-31 NI648509 2021-11-01 2022-10-31 NI648509 2022-10-31 NI648509 2021-10-31 NI648509 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2022-11-01 2023-12-31 NI648509 core:PatentsTrademarksLicencesConcessionsSimilar 2022-11-01 2023-12-31 NI648509 core:PlantMachinery 2022-11-01 2023-12-31 NI648509 core:FurnitureFittings 2022-11-01 2023-12-31 NI648509 bus:RegisteredOffice 2022-11-01 2023-12-31 NI648509 bus:OrdinaryShareClass1 2022-11-01 2023-12-31 NI648509 bus:LeadAgentIfApplicable 2022-11-01 2023-12-31 NI648509 bus:Director1 2022-11-01 2023-12-31 NI648509 bus:Director2 2022-11-01 2023-12-31 NI648509 core:WithinOneYear 2023-12-31 NI648509 core:WithinOneYear 2022-10-31 NI648509 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2023-12-31 NI648509 core:PatentsTrademarksLicencesConcessionsSimilar 2023-12-31 NI648509 core:PlantMachinery 2022-10-31 NI648509 core:FurnitureFittings 2022-10-31 NI648509 core:PlantMachinery 2023-12-31 NI648509 core:FurnitureFittings 2023-12-31 NI648509 core:ExternallyAcquiredIntangibleAssets core:PatentsTrademarksLicencesConcessionsSimilar 2022-11-01 2023-12-31 NI648509 core:ExternallyAcquiredIntangibleAssets 2022-11-01 2023-12-31 NI648509 core:DevelopmentCostsCapitalisedDevelopmentExpenditure core:InternallyGeneratedIntangibleAssets 2022-11-01 2023-12-31 NI648509 core:InternallyGeneratedIntangibleAssets 2022-11-01 2023-12-31 NI648509 core:AfterOneYear 2022-10-31 NI648509 core:RetainedEarningsAccumulatedLosses 2022-10-31 NI648509 core:RetainedEarningsAccumulatedLosses 2021-10-31 NI648509 core:RetainedEarningsAccumulatedLosses 2023-12-31 NI648509 core:RetainedEarningsAccumulatedLosses 2022-10-31 NI648509 core:ShareCapital 2023-12-31 NI648509 core:ShareCapital 2022-10-31 NI648509 core:BetweenOneFiveYears 2023-12-31 NI648509 core:BetweenOneFiveYears 2022-10-31 NI648509 core:UKTax 2021-11-01 2022-10-31 NI648509 core:DeferredTaxation 2022-11-01 2023-12-31 NI648509 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2022-10-31 NI648509 core:PatentsTrademarksLicencesConcessionsSimilar 2022-10-31 NI648509 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2022-10-31 NI648509 core:PatentsTrademarksLicencesConcessionsSimilar 2022-10-31 NI648509 core:AcceleratedTaxDepreciationDeferredTax 2022-10-31 NI648509 core:TaxLossesCarry-forwardsDeferredTax 2022-10-31 NI648509 core:PlantMachinery 2022-10-31 NI648509 core:FurnitureFittings 2022-10-31 NI648509 core:DeferredTaxation 2022-10-31 NI648509 bus:LeadAgentIfApplicable 2021-11-01 2022-10-31 NI648509 bus:Director1 2022-10-31 NI648509 bus:Director1 2023-12-31 NI648509 bus:Director2 2022-10-31 NI648509 bus:Director2 2023-12-31 NI648509 bus:Director1 2021-10-31 NI648509 bus:Director1 2022-10-31 NI648509 bus:Director2 2021-10-31 NI648509 bus:Director2 2022-10-31 NI648509 bus:Director1 2021-11-01 2022-10-31 NI648509 bus:Director2 2021-11-01 2022-10-31 NI648509 bus:MediumEntities 2022-11-01 2023-12-31 NI648509 bus:Audited 2022-11-01 2023-12-31 NI648509 bus:Medium-sizedCompaniesRegimeForAccounts 2022-11-01 2023-12-31 NI648509 bus:PrivateLimitedCompanyLtd 2022-11-01 2023-12-31 NI648509 bus:FullAccounts 2022-11-01 2023-12-31 NI648509 bus:OrdinaryShareClass1 2021-11-01 2022-10-31 NI648509 bus:OrdinaryShareClass1 2023-12-31 NI648509 bus:OrdinaryShareClass1 2022-10-31 NI648509 core:ShareCapital 2022-11-01 2023-12-31 NI648509 core:RetainedEarningsAccumulatedLosses 2022-11-01 2023-12-31 NI648509 1 2022-11-01 2023-12-31
COMPANY REGISTRATION NUMBER: NI648509
Drinksology Ltd
Financial Statements
31 December 2023
Drinksology Ltd
Financial Statements
Period from 1 November 2022 to 31 December 2023
Contents
Page
Strategic report
1
Directors' report
4
Independent auditor's report to the members
6
Statement of income and retained earnings
10
Statement of financial position
11
Statement of cash flows
12
Notes to the financial statements
13
Drinksology Ltd
Strategic Report
Period from 1 November 2022 to 31 December 2023
The Directors present their strategic report on the company for the period ended 31 December 2023. Fair Review of the Company's Business The principal activity of the company during the period under review has been the sale, distribution and marketing of wines and spirits, the creation and distribution of own brand spirits and the provision of creative design services to the spirit alcohol industry . The Drinksology portfolio is distributed on a growing international basis. Key Performance Indicators The financial results of the company are set out on pages 12 through to 29 and show an operating loss amounting to £497,430 (2022: operating profit £99,942). After interest charges, the loss on ordinary activities before taxation is £1,832,237 (2022: profit on ordinary activities before taxation £4,633). The shareholders' deficit for the company is £1,126,010 (2022: shareholders' funds £580,178). The financial results are in line with expectations. Development, Performance and Position of the Company During the period, the company's strategy was the development of its own brand and product portfolio of premium spirits on an international scale, alongside the expansion of its e-commerce platform Spiritly.com, which provides wholesaling, trading and direct-to-consumer sales of spirits and wine. In parallel, the creative design services and projects - for which the company has an international reputation - continued to develop. This strategy requires investment in strengthening the capability of the business, an inevitable factor of which is the up-front incurrence of many of the associated costs, in advance of the delivery of the expected revenues which are expected to develop and accrue over subsequent years. This requires supportive relationships with experienced funding partners which the company has been successful in establishing. The financial results reflect the borrowing costs associated with the continued investment in the business in terms of our people and premises, brand and product development and working capital. 2023 was a difficult year for the global beverage alcohol Industry. Although revenues increased 2% in terms of total value, this represented a 1% decreased by volume. It became apparent that reduced consumer demand arising from cost-of-living pressures was to be a limiting factor in terms of volume growth, whilst inventory levels remaining strong. Against this backdrop, it is particularly pleasing that the company's own brand and product portfolio experienced solid revenue growth. Industry market conditions have remained subdued into 2024 and, although more positive indications are starting to become evident, growth is expected to remain modest into 2025. Principal Risks and Uncertainties of the Business The Directors consider that the Company faces the following risks on a day to day basis: Competition risk The directors consider that the company and its brands and products will continue to penetrate and compete effectively within target markets. The focus on supply chain security and sustainability, and cost base efficiency enables the company to position its brands and products attractively within chosen market segments and across channels. The Spiritly e-commerce channel is showing increasing potential, and progress has been very encouraging, and the creative design capability remains market-leading. The directors are confident that the company will grow sales and gain market share. Financial risk management The company uses various financial instruments, including - amongst others - cash and debt finance, trade debtors, trade creditors and amounts owed to and from related companies that arise directly from operations. The main purpose of these financial instruments is to maintain a balance with regard to working capital and reinvestment, ultimately to secure long-term viability. The company does not make use of derivative transactions to minimise exposure to interest rates or foreign exchange. The company's operations expose it to a variety of financial risks that includes liquidity risk, interest rate risk, credit risk and foreign currency risk. The directors review and agree policies for managing each of these risks, which are summarised below: Liquidity risk and Cash flow risk The liquidity and cashflow position of the company is closely managed to ensure that the business has the resources it needs to deliver products and services when required. The funding position of the company is monitored and relationships with funders developed and managed to ensure that there are adequate facilities available to meet the financing needs associated with the growth ambitions of the business. Since the end of the financial year, the directors have increased the debt funding facilities available to the company, to ensure that adequate headroom exists to meet the funding requirements of the company's strategy. Interest rate risk The growth in the business will give rise to higher levels of funding. The cost of funds is monitored by the directors, including the requirement for any hedging of interest rate exposure, that may be considered appropriate. Credit risk Uncertainties in the economic climate can give rise to bad debt risk. The board seeks to mitigate this risk by adhering to robust credit control procedures. Credit insurance is taken out where available and all debtors are reviewed on a regular basis and provision is made for bad or doubtful debts should they arise. Foreign Currency risk The company trades predominantly in sterling but is exposed to payment and receipts in other currencies, and in particular Euro and US dollar. The company aims to balance receipts and payments in each currency. As the business grows, and to the extent required and considered appropriate by the directors, currency exposures may be managed by forward buying and selling. There are no financial instruments in place at the financial year end. Company strategy and Future developments The company strategy remains unchanged - to develop the own-brand spirit portfolio and to expand its reach into new markets and channels. In parallel, the company aims to continue the development and growth of its e-commerce wholesale, trading and wine business, and to grow the internationally-recognised creative design division. Financial Performance Indicators The directors use both financial and non-financial performance indicators to monitor the performance of the business, including the preparation of regular management accounts, review of customer satisfaction and maintenance of supplier relationships amongst the measures employed.
This report was approved by the board of directors on 25 November 2024 and signed on behalf of the board by:
Mr R Ryan
Mr S Pattison
Director
Director
Registered office:
13 Lombard Street
Belfast
BT1 1RB
Drinksology Ltd
Directors' Report
Period from 1 November 2022 to 31 December 2023
The directors present their report and the financial statements of the company for the period ended 31 December 2023 .
Directors
The directors who served the company during the period were as follows:
Mr R Ryan
Mr S Pattison
Dividends
The directors do not recommend the payment of a dividend.
Events after the end of the reporting period
Particulars of events after the reporting date are detailed in note 27 to the financial statements.
Director's responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure of information in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Sch. 7 to the Large and Medium-sized Companies to be contained in the directors' report. It has done so in respect of future developments and financial risk management (credit risk, liquidity risk, foreign currency risk and cash flow risk).
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial period. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 25 November 2024 and signed on behalf of the board by:
Mr R Ryan
Mr S Pattison
Director
Director
Registered office:
13 Lombard Street
Belfast
BT1 1RB
Drinksology Ltd
Independent Auditor's Report to the Members of Drinksology Ltd
Period from 1 November 2022 to 31 December 2023
Opinion
We have audited the financial statements of Drinksology Ltd (the 'company') for the period ended 31 December 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, 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 FRS 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 period then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 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 directors' report for the financial period 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.
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 directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with trustees and other management; -we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: -performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; and - assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - reading the minutes of meetings of those charged with governance; and - enquiring of management as to actual and potential litigation and claims. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.
John Magee
(Senior Statutory Auditor)
For and on behalf of
Aubrey Campbell & Company
Chartered Accountants & Statutory Auditors & statutory auditor
631 Lisburn Road
Belfast
BT9 7GT
25 November 2024
Drinksology Ltd
Statement of Income and Retained Earnings
Period from 1 November 2022 to 31 December 2023
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
Note
£
£
Turnover
4
20,614,622
17,191,549
Cost of sales
17,063,991
14,222,279
-------------
-------------
Gross profit
3,550,631
2,969,270
Administrative expenses
4,048,061
2,869,328
------------
------------
Operating (loss)/profit
5
( 497,430)
99,942
Other interest receivable and similar income
9
484
1
Interest payable and similar expenses
10
1,335,291
95,310
------------
------------
(Loss)/profit before taxation
( 1,832,237)
4,633
Tax on (loss)/profit
11
( 25,820)
( 10,559)
------------
--------
(Loss)/profit for the financial period and total comprehensive income
( 1,806,417)
15,192
------------
--------
Retained earnings at the start of the period
580,178
564,986
------------
---------
Retained (losses)/earnings at the end of the period
( 1,226,239)
580,178
------------
---------
All the activities of the company are from continuing operations.
Drinksology Ltd
Statement of Financial Position
31 December 2023
31 Dec 23
31 Oct 22
Note
£
£
Fixed assets
Intangible assets
12
845,733
427,623
Tangible assets
13
248,487
260,246
------------
---------
1,094,220
687,869
Current assets
Stocks
14
5,427,750
3,405,052
Debtors
15
5,891,494
4,231,488
Cash at bank and in hand
440,495
200,526
-------------
------------
11,759,739
7,837,066
Creditors: amounts falling due within one year
17
14,080,098
7,202,170
-------------
------------
Net current (liabilities)/assets
( 2,320,359)
634,896
------------
------------
Total assets less current liabilities
( 1,226,139)
1,322,765
Creditors: amounts falling due after more than one year
18
716,667
Provisions
19
25,820
------------
------------
Net (liabilities)/assets
( 1,226,139)
580,278
------------
------------
Capital and reserves
Called up share capital
23
100
100
Profit and loss account
24
( 1,226,239)
580,178
------------
---------
Shareholders (deficit)/funds
( 1,226,139)
580,278
------------
---------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 25 November 2024 , and are signed on behalf of the board by:
Mr R Ryan
Mr S Pattison
Director
Director
Company registration number: NI648509
Drinksology Ltd
Statement of Cash Flows
Period from 1 November 2022 to 31 December 2023
31 Dec 23
31 Oct 22
Note
£
£
Cash flows from operating activities
(Loss)/profit for the financial period
( 1,806,417)
15,192
Adjustments for:
Depreciation of tangible assets
102,319
86,747
Amortisation of intangible assets
93,971
Other interest receivable and similar income
( 484)
( 1)
Interest payable and similar expenses
1,335,291
95,310
Gains on disposal of tangible assets
( 10,003)
Gains on disposal of intangible assets
( 8,333)
Tax on (loss)/profit
( 25,820)
( 10,559)
Accrued (income)/expenses
( 397,172)
340,568
Changes in:
Stocks
( 2,022,698)
( 1,308,472)
Trade and other debtors
( 1,660,006)
( 747,743)
Trade and other creditors
( 1,275,520)
1,836,577
------------
------------
Cash generated from operations
( 5,674,872)
307,619
Interest paid
( 1,335,291)
( 95,310)
Interest received
484
1
Tax (paid)/received
( 201,220)
116,246
------------
---------
Net cash (used in)/from operating activities
( 7,210,899)
328,556
------------
---------
Cash flows from investing activities
Purchase of tangible assets
( 103,421)
( 170,853)
Proceeds from sale of tangible assets
22,864
Purchase of intangible assets
( 589,464)
( 364,578)
Proceeds from sale of intangible assets
85,716
------------
---------
Net cash used in investing activities
( 584,305)
( 535,431)
------------
---------
Cash flows from financing activities
Proceeds from borrowings
( 1,632,667)
182,667
------------
---------
Net cash (used in)/from financing activities
( 1,632,667)
182,667
------------
---------
Net decrease in cash and cash equivalents
( 9,427,871)
( 24,208)
Cash and cash equivalents at beginning of period
(1,656,586)
(1,632,378)
-------------
------------
Cash and cash equivalents at end of period
16
( 11,084,457)
( 1,656,586)
-------------
------------
Drinksology Ltd
Notes to the Financial Statements
Period from 1 November 2022 to 31 December 2023
1. General information
The company is a private company limited by shares, registered in Northern Ireland. The address of the registered office is 13 Lombard Street, Belfast, BT1 1RB.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The directors have considered a number of factors in order assess the continued applicability of the going concern basis of preparation. Per the Strategic Report, the historic and current financial performance and position of the company (to include management information up to the date of signature) have been in line with expectations. The company's trading and cash forecasts for the year to December 2025, based on management's assumptions, suggest that the company will remain comfortably within the limits of its debt financing facilities. As confirmed on 5 November 2024, it is notable that, following a rigorous due diligence process, the company successfully attracted an equity investment of £5M (per note 27 below). This will support the ongoing growth strategy of the company by facilitating a restructuring of its financing and a material reduction in borrowing costs. The investment not only justifies the strategy established by the directors - that being investment in strengthening the capability of the business, necessitating the up-front incurrence of associated costs in advance of resultant revenues, for which supportive relationships with experienced funding partners was key - but has realigned the balance sheet to a net assets position. In light of all these factors, the directors are confident that it remains appropriate to prepare these financial statements on a going concern basis.
Judgements and key sources of estimation uncertainty
Revenue recognition The timing of revenue depends on the assessed stage of completion of service activity at the balance sheet date. This assessment requires that revenues which do not arise until the occurrence of a specified future event or outcome which is outside the control of the company are not recognised until that event occurs. Impairment Goodwill is tested for impairment in accordance with the accounting policy for goodwill set out below. The recoverable amount of goodwill is determined based on value in use. This calculation requires the use of estimates and projections. Depreciation The company's statement of financial position reflects a tangible fixed asset class which is subject to depreciation. Depreciation rates are based upon the expected economic lives of the related tangible fixed assets. Any variation in the useful economic lives of the asset class will have an impact on the balance sheet and financial position of the company. The useful economic lives of tangible fixed assets are uncertain and, therefore, the actual economic life of an asset may be shorter or longer than expected. There have been no significant revisions to the estimated lives during the current financial year. Going concern In order to assess whether it is appropriate for the company to be reported as a going concern, the directors apply judgement, having undertaken appropriate enquiries and having considered the business activities and the company's principal risks and uncertainties. In arriving at this judgement there are a large number of assumptions and estimates invo lved.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Development costs
-
10% straight line
Patents, trademarks and licences
-
10% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Research and development
Research expenditure is written off in the period in which it is incurred. Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met: - It is technically feasible to complete the intangible asset so that it will be available for use or sale; - There is the intention to complete the intangible asset and use or sell it; - There is the ability to use or sell the intangible asset; - The use or sale of the intangible asset will generate probable future economic benefits; - There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and - The expenditure attributable to the intangible asset during its development can be measured reliably. Expenditure that does not meet the above criteria is expensed as incurred.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
25% reducing balance
Fixtures and fittings
-
25% reducing balance
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. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those u nits.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Short term employee benefits
The company provides short term benefits including holiday pay to their employees. These are recognised as an expense in the period in which the service is received.
4. Turnover
Turnover arises from:
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Sale of goods
19,526,472
16,190,898
Rendering of services
1,088,150
1,000,651
-------------
-------------
20,614,622
17,191,549
-------------
-------------
During the period, turnover of £2,222,599 (2022: £4,615,272 (restated)) can be attributed to sales within the EC.
5. Operating (loss)/profit
Operating profit or loss is stated after charging/crediting:
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Amortisation of intangible assets
93,971
Depreciation of tangible assets
102,319
86,747
Gains on disposal of tangible assets
( 10,003)
Gains on disposal of intangible assets
( 8,333)
Impairment of stocks
10,000
Impairment of trade debtors
4,234
(30,208)
Foreign exchange differences
( 2,108)
138,452
---------
---------
6. Auditor's remuneration
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Fees payable for the audit of the financial statements
10,000
10,000
--------
--------
7. Staff costs
The average number of persons employed by the company during the period, including the directors, amounted to:
31 Dec 23
31 Oct 22
No.
No.
Production staff
35
35
Administrative staff
3
3
Management staff
5
3
----
----
43
41
----
----
The aggregate payroll costs incurred during the period, relating to the above, were:
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Wages and salaries
1,776,457
1,180,790
Social security costs
217,184
149,558
Other pension costs
58,579
36,858
------------
------------
2,052,220
1,367,206
------------
------------
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Remuneration
39,798
28,828
Company contributions to defined contribution pension plans
756
648
--------
--------
40,554
29,476
--------
--------
9. Other interest receivable and similar income
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Interest on cash and cash equivalents
484
1
----
----
10. Interest payable and similar expenses
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Interest on banks loans and overdrafts
1,331,889
91,916
Other interest payable and similar charges
3,402
3,394
------------
--------
1,335,291
95,310
------------
--------
11. Tax on (loss)/profit
Major components of tax income
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
Current tax:
Adjustments in respect of prior periods
( 2,912)
Deferred tax:
Origination and reversal of timing differences
( 25,820)
( 7,647)
--------
--------
Tax on (loss)/profit
( 25,820)
( 10,559)
--------
--------
Reconciliation of tax income
The tax assessed on the (loss)/profit on ordinary activities for the period is higher than (2022: lower than) the standard rate of corporation tax in the UK of 19 % (2022: 19 %).
Period from
1 Nov 22 to
Year to
31 Dec 23
31 Oct 22
£
£
(Loss)/profit on ordinary activities before taxation
( 1,832,237)
4,633
------------
-------
(Loss)/profit on ordinary activities by rate of tax
( 348,125)
880
Adjustment to tax charge in respect of prior periods
( 2,912)
Effect of expenses not deductible for tax purposes
22,069
1,211
Effect of capital allowances and depreciation
( 38,272)
( 9,738)
Unused tax losses
338,508
------------
--------
Tax on (loss)/profit
( 25,820)
( 10,559)
------------
--------
12. Intangible assets
Development costs
Patents, trademarks and licences
Total
£
£
£
Cost
At 1 November 2022
295,747
131,876
427,623
Additions
66,305
66,305
Additions from internal developments
523,159
523,159
Disposals
( 77,383)
( 77,383)
---------
---------
---------
At 31 December 2023
818,906
120,798
939,704
---------
---------
---------
Amortisation
Charge for the period
81,891
12,080
93,971
---------
---------
---------
At 31 December 2023
81,891
12,080
93,971
---------
---------
---------
Carrying amount
At 31 December 2023
737,015
108,718
845,733
---------
---------
---------
At 31 October 2022
295,747
131,876
427,623
---------
---------
---------
13. Tangible assets
Plant and machinery
Fixtures and fittings
Total
£
£
£
Cost
At 1 November 2022
276,793
236,383
513,176
Additions
28,418
75,003
103,421
Disposals
( 22,863)
( 22,863)
---------
---------
---------
At 31 December 2023
282,348
311,386
593,734
---------
---------
---------
Depreciation
At 1 November 2022
148,559
104,371
252,930
Charge for the period
41,939
60,380
102,319
Disposals
( 10,002)
( 10,002)
---------
---------
---------
At 31 December 2023
180,496
164,751
345,247
---------
---------
---------
Carrying amount
At 31 December 2023
101,852
146,635
248,487
---------
---------
---------
At 31 October 2022
128,234
132,012
260,246
---------
---------
---------
14. Stocks
31 Dec 23
31 Oct 22
£
£
Raw materials and consumables
5,427,750
3,405,052
------------
------------
15. Debtors
31 Dec 23
31 Oct 22
£
£
Trade debtors
2,817,300
2,682,746
Amounts owed by companies under common ownership
1,191,585
115,002
Prepayments and accrued income
257,066
280,597
Directors loan account
1,185,133
867,142
Other debtors - s455 tax
393,323
286,001
Other debtors
47,087
------------
------------
5,891,494
4,231,488
------------
------------
Amounts owed by companies under common ownership are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
16. Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 Dec 23
31 Oct 22
£
£
Cash at bank and in hand
440,495
200,526
Bank overdrafts
( 11,524,952)
( 1,857,112)
-------------
------------
( 11,084,457)
( 1,656,586)
-------------
------------
17. Creditors: amounts falling due within one year
31 Dec 23
31 Oct 22
£
£
Bank loans and overdrafts
11,524,952
2,773,112
Trade creditors
2,003,725
3,219,088
Accruals and deferred income
93,018
490,190
Corporation tax
108,967
310,187
Social security and other taxes
348,995
380,458
Other creditors
29,108
Other creditors
441
27
-------------
------------
14,080,098
7,202,170
-------------
------------
The following borrowings are secured by the company by way of a fixed charge and floating charge covering all the of assets or undertakings of the company, containing a negative pledge. Contained within "Banks loans and overdrafts" as above are committed facilities which extend for a period in excess of 12 months from the date of approval of the financial statements .
18. Creditors: amounts falling due after more than one year
31 Dec 23
31 Oct 22
£
£
Bank loans and overdrafts
716,667
----
---------
19. Provisions
Deferred tax (note 20)
£
At 1 November 2022
25,820
Charge against provision
( 49,447)
Other movements 1
23,627
--------
At 31 December 2023
--------
20. Deferred tax
The deferred tax included in the statement of financial position is as follows:
31 Dec 23
31 Oct 22
£
£
Included in provisions (note 19)
25,820
----
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
31 Dec 23
31 Oct 22
£
£
Accelerated capital allowances
49,447
Unused tax losses
( 23,627)
----
--------
25,820
----
--------
21. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 57,823 (2022: £ 36,210 ).
22. Financial instruments
The carrying amount for each category of financial instrument is as follows:
31 Dec 23
31 Oct 22
£
£
Financial assets that are debt instruments measured at amortised cost
Financial assets that are debt instruments measured at amortised cost
4,055,974
2,797,748
------------
------------
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
13,622,138
7,228,192
-------------
------------
23. Called up share capital
Issued, called up and fully paid
31 Dec 23
31 Oct 22
No.
£
No.
£
Ordinary shares of £ 0.01 (2022 - £ 1) each
10,000
100
100
100
--------
----
----
----
24. Reserves
Called-up share capital - represents the nominal value of shares that have been is sued. Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Analysis of changes in net debt
At 1 Nov 2022
Cash flows
At 31 Dec 2023
£
£
£
Cash at bank and in hand
200,526
239,969
440,495
Bank overdrafts
(1,857,112)
(9,667,840)
(11,524,952)
Debt due within one year
(916,000)
916,000
Debt due after one year
(716,667)
716,667
------------
------------
-------------
( 3,289,253)
( 7,795,204)
( 11,084,457)
------------
------------
-------------
26. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
31 Dec 23
31 Oct 22
£
£
Not later than 1 year
271,948
298,532
Later than 1 year and not later than 5 years
556,431
897,089
---------
------------
828,379
1,195,621
---------
------------
Drinksology Ltd
Notes to the Financial Statements (continued)
Period from 1 November 2022 to 31 December 2023
27. Events after the end of the reporting period
On 5 November 2024, an equity investment totaling £5M was received from investors to support the ongoing growth strategy of the company, by driving investment in its brands and products, people and e-commerce capability.
28. Directors' advances, credits and guarantees
During the period the directors entered into the following advances and credits with the company:
31 Dec 23
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
Mr R Ryan
407,943
156,038
( 837)
563,144
Mr S Pattison
459,199
163,615
( 825)
621,989
---------
---------
-------
------------
867,142
319,653
( 1,662)
1,185,133
---------
---------
-------
------------
31 Oct 22
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
Mr R Ryan
253,838
164,965
( 10,860)
407,943
Mr S Pattison
278,930
180,269
459,199
---------
---------
--------
---------
532,768
345,234
( 10,860)
867,142
---------
---------
--------
---------
29. Related party transactions
Drinksology Ltd was a 100% owned subsidiary of Kirker Greer (Holdings) Limited until 11th December 2023. At the balance sheet date Kirker Greer (Holdings) Limited owed Drinksology Ltd £181,110 (2022: £3,362). A number of subsidiaries of Kirker Greer (Holdings) Limited owe Drinksology Ltd the following at the balance sheet date: McGraths Brewing Ltd £976 (2022: £773); Mayday Island Ltd £909 (2022: £706) and Sailortown Brewing Ltd £1,067 (2022: £864). A number of companies under common directorship also owed monies to Drinksology Ltd at the balance sheet date: Tempted Cider Company Ltd £nil (2022: £61,862); When we are Giants Ltd £1,010 (2022: £783); Jawbox Spirits Company Ltd £1,054 (2022: £851); Drinksology Europe Ltd £2,374 (2022: £2,135); Cruz de Nevado Ltd £629 (2022: £426); Ginato Italia Ltd £629 (2022: £426); Grand Kadoo Rum Ltd £629 (2022: £426); Hopple Brands Ltd £629 (2022: £426); Pattison & Co Ltd £629 (2022: £426); Ukiyo Spirits Ltd £629 (2022: £426); Darker Still Company Ltd £51,332 (2022: £9,538); Bar Library Wines and Spirits Merchants Ltd £3,879 (2022: £16,657); Kirker & Greer Whiskey Ltd £13,745 (2022: £13,542); Red Bonny Rum Ltd £878 (2022: £675); Bowsaw Bourbon Ltd £901 (2022: £698); Chinnery Gin Co Ltd £710 and Kirker Greer & Co Ltd £927,868. During the year the company had sales credits with a company under common directorship totalling £12,269 (2022: sales invoice totalling £13,536).
30. Controlling party
The company is controlled by Mr S Pattison and Mr R Ryan , who are directors and 100% shareholders from 11th December 2023. Prior to this, the ultimate parent undertaking and the smallest and largest group to consolidate these financial statements is Kirker Greer (Holdings) Limited. Copies of the Kirker Greer (Holdings) Limited consolidated financial statements can be obtained from 13 Lombard Street, Belfast, BT1 1RB.