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COMPANY REGISTRATION NUMBER: 13564495
Twinings Topco Limited
Financial Statements
For the period ended
31 December 2023
Twinings Topco Limited
Financial Statements
Period from 1 April 2023 to 31 December 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Director's report
4
Independent auditor's report to the members
6
Consolidated statement of comprehensive income
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the financial statements
17
Twinings Topco Limited
Officers and Professional Advisers
Director
Mr A Farrant
Registered office
2 Badmaes Street
London
United Kingdom
SW1Y 6HD
Auditor
Streets Audit LLP
Chartered accountants & statutory auditor
Tower House
Lucy Tower Street
Lincoln
LN1 1XW
Strategic Report
Period from 1 April 2023 to 31 December 2023
The directors present their strategic report for the year ended 31 March 2023. We aim to present a balanced and comprehensive view of the development and performance of our business during the period and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face. The principal activity of the group during the period was the supply of parts and equipment to the land management sector, principally the agricultural and groundcare markets. Whilst these two markets have many similarities, the group is organised to service them separately to optimise efficiency. Spaldings Holdings Limited and its subsidiaries were owned by Marubeni Agri Machinery Holdings until the 6 June 2022. On this date the business was acquired by Twinings BidCo Limited. Twinings BidCo Limited is a subsidiary of Twinings TopCo Limited and was for the entire period of these accounts. The share capital of Twinings TopCo Limited is ultimately owned by Inspirit Management Limited of 105 Piccadilly London WIJ 7NJ and the executive directors.
Review of business
The directors consider the three most important key performance indicators to be turnover, gross margin and operating profit. Turnover for the year was £20.1m (2022-£nil). Market and climatic conditions were favourable throughout the year with farm incomes improving with high commodity prices, albeit marginally offset by high input costs. The summer heatwave led to hard land conditions resulting in high sales of wearing parts. Gross profit was £7.99m (2022-£nil). Improving market conditions, coupled with supply side inflation led to price increases which were largely recovered through pricing management which resulted in gross margin levels of 39.6%. Marginal gains in both turnover and gross margin led to an improvement in profitability at the EBITDA level. There were a number of exceptional adjustments needed post acquisition which led to one-off exceptional items through the P & L such as redundancy costs and stock re-aligment costs. The directors decided to provide for this within the financial year (£1,019k) which led to a loss for the year of (£250k) before taxation.
Principal risks and uncertainties
Competitive pressure in the United Kingdom is a continuing risk for the group, which could result in it losing its sales to its key competitors. Political uncertainty due to Brexit is also a factor with some of the major customers when considering purchases. The group manages this risk by providing high quality products to its customers and by actively maintaining strong relationships with key personnel. With regard to the current situation with the COVID-19 pandemic, the war in Ukraine and the cost of living crisis in general the company does not consider that they have any impact on the company's operation.
This report was approved by the board of directors on 9 September 2024 and signed on behalf of the board by:
Mr A Farrant
Director
Registered office:
2 Badmaes Street
London
United Kingdom
SW1Y 6HD
Twinings Topco Limited
Director's Report
Period from 1 April 2023 to 31 December 2023
The director presents his report and the financial statements of the group for the period ended 31 December 2023 .
Directors
The directors who served the company during the period were as follows:
Mr P S Youens
Mr A Farrant
Dividends
The director does not recommend the payment of a dividend.
Future developments
The group intends to continue to supply and distribute patented and other products to the agricultural, ground care and industrial markets.
Financial instruments
a) Price risk
Price risk arises on goods purchased in Euros and USD and also gives exposure to foreign currency movement. The group mitigates this risk by the use of forward contracts if necessary.
The company is in a competitive market and therefore has a risk of losing sales to competitors. The company manages this risk by providing high quality products to its customers and by maintaining strong relationships.
b) Credit risk
The structure of the customer base of the company means that credit risk is not considered significant.
c) Liquidity and Cashflow risk
Liquidity and cashflow risk is mitigated by virtue of the company being part of a large group.
Disclosure of information in the strategic report
Matters required in the directors report have been included in the strategic report.
Director's responsibilities statement
The director is responsible for preparing the strategic report, director's report and the financial statements in accordance with applicable law and regulations. Company law requires the director to prepare financial statements for each financial period. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and the company and the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 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 group and 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 group and the company's auditor is aware of that information.
This report was approved by the board of directors on 9 September 2024 and signed on behalf of the board by:
Mr A Farrant
Director
Registered office:
2 Badmaes Street
London
United Kingdom
SW1Y 6HD
Twinings Topco Limited
Independent Auditor's Report to the Members of Twinings Topco Limited
Period from 1 April 2023 to 31 December 2023
Opinion
We have audited the financial statements of Twinings Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2023 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated 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 group's and of the parent company's affairs as at 31 December 2023 and of the group's profit 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the 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 director 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 director is 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 director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the director's 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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 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 director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is responsible for assessing the group's and 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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: 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; - assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. 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; - reviewing legal and professional expenditure and discussions with management.; 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 inquiry 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 group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's 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 group's or the parent 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 group or the parent 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. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 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.
The prior year financial statements were unaudited and accordingly the prior year comparatives in these financial statements are unaudited.
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.
Linda Lord BSc BFP FCA TEP
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered accountants & statutory auditor
Tower House
Lucy Tower Street
Lincoln
LN1 1XW
24 September 2024
Twinings Topco Limited
Consolidated Statement of Comprehensive Income
Period from 1 April 2023 to 31 December 2023
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
Note
£
£
Turnover
4
18,522,057
20,129,302
Cost of sales
10,574,682
12,141,908
---------------
---------------
Gross profit
7,947,375
7,987,394
Distribution costs
1,037,103
1,176,293
Administrative expenses
6,164,837
6,800,943
Other operating income
5
543
3,299
--------------
--------------
Operating profit
6
745,978
13,457
Other interest receivable and similar income
10
1,315
269
Interest payable and similar expenses
11
346,368
264,091
--------------
--------------
Profit/(loss) before taxation
400,925
( 250,365)
Tax on profit/(loss)
12
3,930
3,428
-----------
-----------
Profit/(loss) for the financial period and total comprehensive income
396,995
( 253,793)
-----------
-----------
Profit for the financial period attributable to:
The owners of the parent company
378,963
31,836
Non-controlling interests
18,032
( 285,629)
-----------
-----------
396,995
( 253,793)
-----------
-----------
All the activities of the group are from continuing operations.
Twinings Topco Limited
Consolidated Statement of Financial Position
31 December 2023
31 Dec 23
31 Mar 23
Note
£
£
Fixed assets
Negative goodwill
13
( 1,487,695)
( 1,814,220)
Tangible assets
14
921,824
1,000,019
--------------
--------------
( 565,871)
( 814,201)
Current assets
Stocks
16
7,414,869
7,868,276
Debtors
17
2,816,493
4,517,450
Cash at bank and in hand
1,407,080
541,516
---------------
---------------
11,638,442
12,927,242
Creditors: amounts falling due within one year
18
10,048,493
11,489,888
---------------
---------------
Net current assets
1,589,949
1,437,354
--------------
--------------
Total assets less current liabilities
1,024,078
623,153
Provisions
20
3,930
--------------
-----------
Net assets
1,020,148
623,153
--------------
-----------
Capital and reserves
Called up share capital
23
1
1
Profit and loss account
24
410,799
31,836
-----------
---------
Equity attributable to the owners of the parent company
410,800
31,837
Non-controlling interests
609,348
591,316
--------------
-----------
1,020,148
623,153
--------------
-----------
These financial statements were approved by the board of directors and authorised for issue on 9 September 2024 , and are signed on behalf of the board by:
Mr A Farrant
Director
Company registration number: 13564495
Twinings Topco Limited
Company Statement of Financial Position
31 December 2023
31 Dec 23
31 Mar 23
Note
£
£
Fixed assets
Investments
15
100
100
Current assets
Debtors
17
1,250,000
1,250,000
Creditors: amounts falling due within one year
18
1,250,099
1,250,099
--------------
--------------
Net current liabilities
99
99
-----
-----
Total assets less current liabilities
1
1
-----
-----
Capital and reserves
Called up share capital
23
1
1
-----
-----
Shareholders funds
1
1
-----
-----
The profit for the financial period of the parent company was £Nil (2023: £Nil).
These financial statements were approved by the board of directors and authorised for issue on 9 September 2024 , and are signed on behalf of the board by:
Mr A Farrant
Director
Company registration number: 13564495
Twinings Topco Limited
Consolidated Statement of Changes in Equity
Period from 1 April 2023 to 31 December 2023
Called up share capital
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
At 1 April 2022
1
1
1
Profit for the period
31,836
31,836
( 285,629)
( 253,793)
-----
---------
---------
-----------
-----------
Total comprehensive income for the period
31,836
31,836
( 285,629)
( 253,793)
Acquisition of subsidiary with minority interest
876,945
876,945
-----
---------
---------
-----------
-----------
Total investments by and distributions to owners
876,945
876,945
At 31 March 2023
1
31,836
31,837
591,316
623,153
Profit for the period
378,963
378,963
18,032
396,995
-----
-----------
-----------
-----------
-----------
Total comprehensive income for the period
378,963
378,963
18,032
396,995
-----
-----------
-----------
-----------
--------------
At 31 December 2023
1
410,799
410,800
609,348
1,020,148
-----
-----------
-----------
-----------
--------------
Twinings Topco Limited
Company Statement of Changes in Equity
Period from 1 April 2023 to 31 December 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 1 April 2022
1
1
Profit for the period
At 31 March 2023
1
1
Profit for the period
-----
-----
-----
At 31 December 2023
1
1
-----
-----
-----
Twinings Topco Limited
Consolidated Statement of Cash Flows
Period from 1 April 2023 to 31 December 2023
31 Dec 23
31 Mar 23
£
£
Cash flows from operating activities
Profit/(loss) for the financial period
396,995
( 253,793)
Adjustments for:
Depreciation of tangible assets
148,268
216,623
Amortisation of intangible assets
( 326,525)
( 924,970)
Other interest receivable and similar income
( 1,315)
( 269)
Interest payable and similar expenses
346,368
264,091
Tax on profit
3,930
3,428
Accrued (income)/expenses
( 45,617)
46,703
Changes in:
Stocks
453,407
( 833,276)
Trade and other debtors
1,700,957
( 777,450)
Trade and other creditors
( 147,801)
2,570,837
--------------
--------------
Cash generated from operations
2,528,667
311,924
Interest paid
( 346,368)
( 264,091)
Interest received
1,315
269
Tax paid
( 154,011)
--------------
-----------
Net cash from/(used in) operating activities
2,183,614
( 105,909)
--------------
-----------
Cash flows from investing activities
Purchase of tangible assets
( 70,073)
( 57,307)
Acquisition of subsidiaries
( 4,875,000)
--------------
--------------
Net cash used in investing activities
( 70,073)
( 4,932,307)
--------------
--------------
Cash flows from financing activities
Proceeds from borrowings
( 1,300,273)
4,479,632
Payments of finance lease liabilities
52,296
Other financing cash flow adjustment
1,100,099
--------------
--------------
Net cash (used in)/from financing activities
( 1,247,977)
5,579,731
--------------
--------------
Net increase in cash and cash equivalents
865,564
541,515
Cash and cash equivalents at beginning of period
541,516
1
--------------
-----------
Cash and cash equivalents at end of period
1,407,080
541,516
--------------
-----------
Twinings Topco Limited
Notes to the Financial Statements
Period from 1 April 2023 to 31 December 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 2 Badmaes Street, London, SW1Y 6HD, United Kingdom.
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.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The financial statements consolidate the financial statements of Twinings Topco Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the period are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The following judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies are as follows: -The useful life and depreciation rate of tangible fixed assets is reviewd annually and amended when necessary. -Negative goodwill represents the excess of the fair value of net assets acquired over the cost of acquisition of a business. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: -The valuation of stock, and any provision against older stock becoming obsolete, is considered by directors on an ongoing basis.
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.
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.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Negative goodwill represents the excess of the fair value of net assets acquired over the cost of acquisition of a business, The negative goodwill has been pro rated between the non-monetary assets acquired and recognised in the periods in which the non-monetary assets are recovered. For the stock element of negative goodwill this has been deemed to be the point at which the stock being sold or fully provided for. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed five years.
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:
Goodwill
-
20% 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.
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.
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:
Freehold property
-
4-6% Straight line
Plant and machinery
-
10-33% Straight line
Computer Software
-
10-33% Straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Investments in associates
Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.
Investments in joint ventures
Investments in joint ventures are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the joint venture.
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 units.
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.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
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 entity 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. 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.
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.
4. Turnover
Turnover arises from:
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Sale of goods
18,522,057
20,129,302
---------------
---------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Other operating income
543
3,299
-----
--------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Amortisation of intangible assets
( 326,525)
( 924,970)
Depreciation of tangible assets
148,268
216,623
Impairment of trade debtors
(29,429)
(31,417)
Operating lease rentals
355,210
359,470
Foreign exchange differences
330
4,545
-----------
-----------
7. Auditor's remuneration
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Fees payable for the audit of the financial statements
60,000
30,000
---------
---------
Fees payable to the company's auditor and its associates for other services:
Audit-related assurance services
10,000
10,000
Taxation compliance services
8,000
5,000
---------
---------
18,000
15,000
---------
---------
8. Staff costs
The average number of persons employed by the group during the period, including the director, amounted to:
31 Dec 23
31 Mar 23
No.
No.
Administrative staff
39
44
Number of sales staff
64
63
Number of stores staff
27
26
-----
-----
130
133
-----
-----
The aggregate payroll costs incurred during the period, relating to the above, were:
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Wages and salaries
4,014,641
4,592,179
Social security costs
447,767
573,187
Other pension costs
155,369
178,425
--------------
--------------
4,617,777
5,343,791
--------------
--------------
Included in wages and salaries above are £Nil (March 2023: 564,000) of costs relating to the restructure following the acquisition of the share capital of Spalding Holdings Limited by Twinings BidCo Limited.
9. Director's remuneration
The director's aggregate remuneration in respect of qualifying services was:
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Remuneration
290,855
524,658
Company contributions to defined contribution pension plans
19,747
44,062
-----------
-----------
310,602
568,720
-----------
-----------
The number of directors who accrued benefits under company pension plans was as follows:
31 Dec 23
31 Mar 23
No.
No.
Defined contribution plans
3
6
-----
-----
Remuneration of the highest paid director in respect of qualifying services:
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Aggregate remuneration
104,424
94,654
Company contributions to defined contribution pension plans
10,069
12,297
-----------
-----------
114,493
106,951
-----------
-----------
10. Other interest receivable and similar income
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Interest on cash and cash equivalents
1,315
269
--------
-----
11. Interest payable and similar expenses
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Interest on banks loans and overdrafts
94,639
68,641
Interest on obligations under finance leases and hire purchase contracts
7,220
6,230
Other interest payable and similar charges
244,509
189,220
-----------
-----------
346,368
264,091
-----------
-----------
12. Tax on profit
Major components of tax income
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Current tax:
UK current tax income
( 54,989)
Deferred tax:
Origination and reversal of timing differences
3,930
58,417
--------
---------
Tax on profit
3,930
3,428
--------
---------
Reconciliation of tax expense
The tax assessed on the profit/(loss) on ordinary activities for the period is lower than (2023: higher than) the standard rate of corporation tax in the UK of 25 % (2023: 19 %).
Period from
1 Apr 23 to
Year to
31 Dec 23
31 Mar 23
£
£
Profit/(loss) on ordinary activities before taxation
400,925
( 250,365)
-----------
-----------
Profit/(loss) on ordinary activities by rate of tax
55,629
( 47,569)
Adjustment to tax charge in respect of prior periods
( 54,989)
Effect of expenses not deductible for tax purposes
7,111
( 102,916)
Effect of capital allowances and depreciation
10,819
208,902
Utilisation of tax losses
( 69,629)
-----------
-----------
Tax on profit
3,930
3,428
-----------
-----------
13. Intangible assets
Group
Goodwill
£
Cost
At 1 April 2023 and 31 December 2023
( 2,739,190)
--------------
Amortisation
At 1 April 2023
( 924,970)
Charge for the period
( 326,525)
--------------
At 31 December 2023
( 1,251,495)
--------------
Carrying amount
At 31 December 2023
( 1,487,695)
--------------
At 31 March 2023
( 1,814,220)
--------------
The company has no intangible assets.
Negative goodwill arose on the acquisition of the share capital of Spaldings Holdings Limited on 6 June 2022.
14. Tangible assets
Group
Freehold property
Plant and machinery
Computer equipment
Total
£
£
£
£
Cost
At 1 April 2023
1,799,340
2,087,440
839,434
4,726,214
Additions
23,594
46,479
70,073
Disposals
( 30,315)
( 30,315)
--------------
--------------
-----------
--------------
At 31 December 2023
1,799,340
2,080,719
885,913
4,765,972
--------------
--------------
-----------
--------------
Depreciation
At 1 April 2023
1,151,300
1,799,107
775,788
3,726,195
Charge for the period
53,478
61,206
33,584
148,268
Disposals
( 30,315)
( 30,315)
--------------
--------------
-----------
--------------
At 31 December 2023
1,204,778
1,829,998
809,372
3,844,148
--------------
--------------
-----------
--------------
Carrying amount
At 31 December 2023
594,562
250,721
76,541
921,824
--------------
--------------
-----------
--------------
At 31 March 2023
648,040
288,333
63,646
1,000,019
--------------
--------------
-----------
--------------
The company has no tangible assets.
15. Investments
The group has no investments.
Company
Other investments other than loans
£
Cost
At 1 April 2023 and 31 December 2023
100
-----
Impairment
At 1 April 2023 and 31 December 2023
-----
Carrying amount
At 1 April 2023 and 31 December 2023
100
-----
At 31 March 2023
100
-----
On 6 June 2022 the group acquired 100% of the share capital of the issued capital of Spaldings Holdings Limited and its subsidiaries.
The share capital of Twinings BidCo Limited is owned 76% by the Twinings TopCo Limited. Twinings BidCo Limited own 100% of the share capital of Spaldings Holdings Limited, Spaldings Limited and Central Spares Limited.
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Twinings BidCo Limited
Ordinary A
76
Spaldings Holdings Limited
Ordinary
76
Spaldings Limited
Ordinary
76
Central Spares Limited
Ordinary
76
Redeemable Preference
76
16. Stocks
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Finished goods and goods for resale
7,414,869
7,868,276
--------------
--------------
-----
-----
17. Debtors
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Trade debtors
2,308,056
4,108,534
Amounts owed by group undertakings
1,250,000
1,250,000
Prepayments and accrued income
306,223
205,733
Corporation tax repayable
202,214
203,183
--------------
--------------
--------------
--------------
2,816,493
4,517,450
1,250,000
1,250,000
--------------
--------------
--------------
--------------
18. Creditors: amounts falling due within one year
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Bank loans and overdrafts
4,279,458
5,579,731
Trade creditors
3,628,675
3,748,109
Amounts owed to group undertakings
1,100,099
1,100,099
Accruals and deferred income
244,703
290,320
Social security and other taxes
593,266
621,633
Obligations under finance leases and hire purchase contracts
52,296
Other creditors
1,250,095
1,250,095
150,000
150,000
---------------
---------------
--------------
--------------
10,048,493
11,489,888
1,250,099
1,250,099
---------------
---------------
--------------
--------------
Creditors of less than one year includes loan funding of £4,010,000 which is secured against the stock of the Spaldings Limited and loan funding of £1,570,000 which is secured against the Freehold Property in Spaldings Holdings Limited. Other creditors includes loans due to Inspirit GP LLP (the majority shareholder of Twinings TopCo Limited) amounting to £1,100,099 in addition to £150,000 owing to other shareholders.
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Not later than 1 year
52,296
---------
-----
-----
-----
20. Provisions
Group
Deferred tax (note 21)
£
At 1 April 2023
Additions
3,930
--------
At 31 December 2023
3,930
--------
The company does not have any provisions.
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Included in provisions (note 20)
3,930
--------
-----
-----
-----
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Accelerated capital allowances
30,740
30,740
Unused tax losses
( 26,810)
( 26,810)
---------
-----
---------
-----
3,930
3,930
---------
-----
---------
-----
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 155,369 (2023: £ 178,425 ).
23. Called up share capital
Issued, called up and fully paid
31 Dec 23
31 Mar 23
No.
£
No.
£
Ordinary shares of £ 0.01 each
100
1
100
1
-----
-----
-----
-----
24. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Analysis of changes in net debt
At 1 Apr 2023
Cash flows
At 31 Dec 2023
£
£
£
Cash at bank and in hand
541,516
865,564
1,407,080
Debt due within one year
(5,579,731)
1,247,977
(4,331,754)
--------------
--------------
--------------
( 5,038,215)
2,113,541
( 2,924,674)
--------------
--------------
--------------
26. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
31 Dec 23
31 Mar 23
31 Dec 23
31 Mar 23
£
£
£
£
Not later than 1 year
547,352
387,368
Later than 1 year and not later than 5 years
618,410
274,632
--------------
-----------
-----
-----
1,165,762
662,000
--------------
-----------
-----
-----
27. Related party transactions
Company
The company is controlled by Inspirit GP LLP. During the period ended 31 December 2023 management charges of £164,902 were payable to entities with control, joint control or significant influence over the company. Loan notes of £1,100,099 were owing to entities with control, joint control or significant influence over the company at 31 December 2023. Key management personnel received remuneration of £310,602 (12 months to March 2023: £568,720).