REGISTERED NUMBER: 13974101 (England and Wales) |
Group Strategic Report, Report of the Director and |
Audited Consolidated Financial Statements |
for the Year Ended 29 February 2024 |
for |
BRAND K HOLDINGS LTD |
REGISTERED NUMBER: 13974101 (England and Wales) |
Group Strategic Report, Report of the Director and |
Audited Consolidated Financial Statements |
for the Year Ended 29 February 2024 |
for |
BRAND K HOLDINGS LTD |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Contents of the Consolidated Financial Statements |
for the year ended 29 FEBRUARY 2024 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Director | 7 |
Report of the Independent Auditors | 10 |
Consolidated Statement of Income and Retained Earnings | 14 |
Consolidated Balance Sheet | 16 |
Company Balance Sheet | 17 |
Consolidated Cash Flow Statement | 18 |
Notes to the Consolidated Cash Flow Statement | 19 |
Notes to the Consolidated Financial Statements | 21 |
BRAND K HOLDINGS LTD |
Company Information |
for the year ended 29 FEBRUARY 2024 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditor |
The Pinnacle |
170 Midsummer Boulevard |
Milton Keynes |
MK9 1BP |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Group Strategic Report |
for the year ended 29 FEBRUARY 2024 |
The director presents his strategic report and the financial statements for the company and the group for the year ended 28 February 2024. The director, in preparing the strategic report, has complied with s414c of the Companies Act 2006. |
The company incorporated on 14 March 2022 and acquired all the shares in Brand K Ltd (and its group companies) on 24 August 2022. The results of all subsidiaries are included from the date of acquisition, so the comparative 2023 period of financial statements reports 6 months of data for the group. |
A significant acquisition was made on 31 March 2023 when the group acquired 100% of the share capital of Marleton Cross Ltd, a company involved in the manufacture of shower trays. This strategic acquisition strengthens the group's position in the shower tray sector, adding to its existing presence. |
REVIEW OF BUSINESS |
The principal activity of the company is that of a holding company. |
The Brand K Group is engaged in the supply of radiator and bathroom products to the heating and plumbing industry, the manufacture of shower trays and the manufacture of kitchen and bathroom cabinets. |
Group turnover in the period amounted to £140.1m (6m 2023 £60.0m), with a gross profit of £46.0m (6m 2023 £20.6m), a gross profit margin of 32.8% (6m 2023 34.3%) and an operating profit of £8.9m (6m 2023 £3.4m). |
The director was pleased with the result before taxation, after the previous period had been impacted by the inclusion of an exceptional item. The result is primarily attributed to the strength of the divisions supplying bathroom products, whilst the manufacturing divisions have experienced difficult trading conditions. |
Net Assets of the group amounted to £7.5m (2023 £2.3m) at the reporting date. The director is pleased to have achieved this improvement and continues to look for further strategic investment opportunities for the group. A significant new acquisition was made after the year end, as detailed in Note 32. |
The director is pleased with the progress of the group. Trading has become more difficult since the year end, because of a suppressed building trade. The Group is seeking to improve performance of the manufacturing divisions through cost control, and building on synergies across the group to drive revenue growth. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Group Strategic Report |
for the year ended 29 FEBRUARY 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
Strategic, financial, commercial, operational, social, environmental and ethical risks are all considered as part of the group's controls, which are designed to manage rather than eliminate the risk of failure to achieve business objectives. Therefore, they can only provide reasonable, not absolute, assurance against material misstatement or loss. |
Although at present there are no immediate risks considered likely to have a significant impact on the short- or long-term value of the group, the principal risks identified are as follows: |
Competitive risk: |
The Group operates in a competitive industry where price is important. Conditions which can suddenly affect the buying price present a risk, such as exchange rates, as the Group sources a significant amount of its supplies from overseas. To manage this risk, the Group forward purchases foreign currency which allows it to withstand sudden changes. Additionally, the group is set up to supply small quantities with next day delivery, enabling customers to make smaller, more frequent orders, meaning that the group has an advantage in turbulent market conditions. |
Liquidity risks: |
The Group relies on bank lending facilities which require it to trade within certain financial criteria. Management closely manages the financial position of the Group and reviews future cash flows on a regular basis, in order to meet the conditions. The director is confident that the group has sufficient cash facilities to enable it to trade within its terms and to continue to meet its liabilities as they fall due. |
Market risks: |
Worldwide events such as the war in Ukraine have created a position of uncertainty as to how consumer markets will react in the future. The cost of living crisis has added to the uncertainty. Although to date, demand has continued to be healthy, it remains a risk that economic conditions could have a negative impact on demand for home improvement products in the future. The director feels that the Group's operational methods help to protect it against market risk, as it specialises in the fast delivery of small stock quantities to its customers. The Group has also taken various measures to reduce its cost base to minimise any risk. |
Credit risks: |
The Group's credit risk is primarily attributable to its trade debtors. The amounts presented in the consolidated balance sheet are net of allowances for doubtful debts, estimated by the management based on prior experience, the current economic environment and specific customer issues. The Group has implemented policies that require appropriate credit checks on potential customers or review of existing customer credit history before a sale is made together with having in force a credit insurance policy. |
Exchange rate risks: |
Movements in the exchange rates can have a significant impact on the supply costs for the group. From time to time, the group enters into foreign exchange contracts with the aim of mitigating these risks. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Group Strategic Report |
for the year ended 29 FEBRUARY 2024 |
SECTION 172(1) STATEMENT |
The Director is committed to conducting business responsibly, promoting the success of the group for the benefit of its members as a whole. This commitment is central to operations and strategic decision-making, guiding us in creating long-term value while maintaining high ethical standards and ensuring compliance with the law. |
Relevant Issues, Factors and Stakeholders |
In complying with section 172, the director has considered a wide range of issues, factors and stakeholders, including: |
- | Long-Term Consequences: Strategic decisions are made with a focus on sustainable growth and long-term value creation. We are committed to conducting business to the highest standards of ethics, transparency and corporate governance. |
- | Employee Interest: The welfare and development of our employees are paramount. We are dedicated to treating employees in an open, honest and unprejudiced manner, encouraging them to achieve their full potential. Employee engagement is facilitated through the HR department with an open-door policy, ensuring that their views are considered. |
- | Business Relationships: Building and maintaining strong, enduring relationships with suppliers, customers, and other key stakeholders is vital. We value the diversity of our suppliers and work with them in innovative ways to create added value for our customers and trading partners, ensuring fair and professional treatment. |
- | Community and Environmental Impact: We recognise the importance of minimising our environmental footprint and contributing positively to the communities in which we operate. This commitment is demonstrated through our participation in environmental audits, investment in renewable energy, and sustainable sourcing practices. |
- | Reputation for High Standards: Upholding a strong reputation for high standards of business conduct is crucial. Our corporate culture if focused on integrity, transparency, and adherence to the highest ethical standards, which we believe is essential for earning the trust and respect of our customers, suppliers and employees |
- | Fairness Between Members: The Director ensures that all decisions are made fairly and equitably, considering the needs of all members of the group. This approach extends to our commitment to human rights and the elimination of modern slavery and human trafficking from our business and supply chains. |
Formation of Opinions and Decision-Making Process |
The Director is responsible for ensuring that risks are identified, and local risk owners are assigned responsibility for mitigating any risks identified. This structured approach allows us to uphold our commitments to ethical behaviour, environmental responsibility, and employee welfare. |
Stakeholder Engagement and Methods of Understanding Issues |
The Director engages with stakeholders through various methods to understand the issues to which they must have regard: |
- | Supplier and Customer Engagement: Regular communication with suppliers, customers, and other partners is maintained. We disseminate our Corporate Responsibility Policy across our supply chain to ensure our principles are clear and adhered to. |
- | Employee Involvement: Employee engagement is a continuous process, supported by feedback through line managers that promote open dialogue. We strive to create a culture of mutual trust and respect, ensuring diversity and equal opportunities in the workplace. |
- | Community and Environmental Initiatives: The company is committed to sustainable practices, such as the implementation of our biomass burner facilities, which have significant reduced our waste to landfill. Our efforts extend to supporting local communities through innovative programmes and sustainable sourcing. |
- | Corporate Culture: Our corporate culture is aligned with our values, promoting ethical behaviour, safety, and environmental stewardship. |
Impact on Company Decisions and Strategies |
The Director's regard for the matters outlines in section 172 has had significant effect on the company's decisions and strategies during the financial year: |
- | Long-Term Planning: Strategic decisions have been made with long-term growth and sustainability in mind, including investments in renewable energy and sustainable sourcing practices. |
- | Employee Welfare: Initiatives to improve employee engagement, retention, and overall job satisfaction have been implemented, recognising the critical role our workforce plays in the group's success. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Group Strategic Report |
for the year ended 29 FEBRUARY 2024 |
- | Strengthening Relationships: We have deepened relationships with suppliers and customers, fostering collaboration and resilience across our supply chains. |
- | Environmental Responsibility: Our commitment to reducing our environmental impact has guided operational decisions, including our efforts to eliminate waste to landfill and promote energy efficiency. |
- | Governance and Ethical Standards: Maintaining high standards of business conduct is reflected in our governance practices and corporate policies, reinforcing our reputation and commitment to ethical behaviour. |
Conclusion |
In conclusion, the Director has actively considered the various factors and stakeholders outlined in s172 of the Companies Act 2006. By engaging with key stakeholders and carefully considering the long-term impact of their decisions, the Director has ensured that the company remains on a path to sustainable success while upholding its responsibilities to employees, the community, and the environment. This commitment is reflected in our corporate policies, strategic decisions, and continuous efforts to operate as a responsible and ethical business. |
DEVELOPMENT AND PERFORMANCE |
During the period, key appointments and restructures were made to the Group Senior Leadership Team (SLT) in order to support the development and growth specifically in the Group, and the interaction between different companies within the Group. From such appointments, it is clear that the business now has far greater structure in terms of analysis and the reporting of key metrics, which are seen as the key foundations and building blocks for further sustained and targeted growth. |
Development of relationships with both customers and suppliers is seen as the methodology to achieve the planned market growth through the organic growth of the current service offering. From such dialogue and relationships, feedback has been received, and analysed to the point that companies in the Group now have strategic business plans in place to increase their own service offering, through the introduction of additional product lines to their catalogues. |
In addition, the Group targets strategic acquisitions which could enhance the achievement of the Group's overall objectives. |
The group's key performance indicators for the period were as follows: |
2024 (12 months) | 2023 (6 months) |
Turnover | £140.1m | £60.0m |
Gross profit margin | 32.8% | 34.3% |
Operating profit | £8.9m | £3.4m |
Net profit/(loss) before taxation | £7.2m | £(2.3m) |
Net assets | £7.5m | £2.3m |
* Net loss before Taxation is impacted by exceptional items, see Note 8 for more details. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Group Strategic Report |
for the year ended 29 FEBRUARY 2024 |
OTHER KEY PERFORMANCE INDICATORS |
The director considers the following Key Performance Indicators when assessing the non-financial performance of the Group: |
Staff Turnover/Retention % - Whilst staff Turnover is inevitable in the current environment, the Group as a whole have managed to retain all key personnel, and further make additions to the wider SLT, bringing in further expertise to facilitate better strategy and ultimately sustained growth. |
Creation of employment opportunities - Overall staff numbers have continued to increase in line with volume increases, with the approach of making such appointments as linear as possible and such increases are expected to continue. |
3PL Deliveries (Kg) - Transport |
3PL Deliveries (Drop Count) - Transport |
Returns as a percentage of Invoices - Warehouse/Returns |
New Account Generation - Sales Managers |
Picking and processing errors - Warehouse |
Backorders/Stock Outs - Purchasing |
Missed Calls - Sales Offices |
All KPI's continue to be monitored on a weekly basis by the respective Business Unit's SLT, where once discussed, the results are communicated upward to the Director and wider Group SLT for further discussion. |
ON BEHALF OF THE BOARD: |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Report of the Director |
for the year ended 29 FEBRUARY 2024 |
The director presents his report with the financial statements of the company and the group for the year ended 29 February 2024. |
DIVIDENDS |
The total distribution of dividends for the period ended 29 February 2024 was £77,911. |
After the period end dividends of £60,000 were proposed and paid. |
RESEARCH AND DEVELOPMENT |
As part of the strategic plan of increasing the service offering, large amounts of Research and Development activity were committed to across the Group by the Director. Such activity is very much centred on finding new innovative products, assessing their suitability and their place in both the specific and wider Bathroom market place. |
Investment in this area is seen as key to the delivery of the overall objective of growing the Group, with much of the costs in regard to this genre being staff costs. This is primarily owing to the fact that once said products are identified, large amounts of research activity are undertaken before making any firm commitment to suppliers, who have been initially secured through first stage commercial negotiations. |
FUTURE DEVELOPMENTS |
The Group intends to grow turnover through new opportunities resulting from the expansion of the group. There is a positive outlook because some key costs, such as freight and fuel, have reduced, and UK inflation appears to be reducing, which allows better control of margins. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTOR |
FINANCIAL INSTRUMENTS |
The Group's principal financial instruments are comprised of bank balances, invoice discounting, asset based lending, loans, forward exchange contracts for foreign currency, trade debtors and trade creditors. The main purpose of these instruments is to provide finance for the group's operations. |
In respect of bank balances, loans, and asset based lending, the group manages its cashflow tightly, and monitors the relationship between these financial instruments, ensuring there are sufficient funds to meet amounts due, and that the group is operating within contractual limits. |
Trade debtors and the invoice discounting facility are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers, together with insurance against bad debts. |
Trade creditor risk is managed by close relationships with key suppliers and ensuring that sufficient funds are available to meet amounts due. |
Forward exchange contracts which are complex derivative financial instruments are managed by ensuring that sufficient funds are available to meet commitments, and from time to time by hedging certain contracts to mitigate the financial impact of exchange rate fluctuations. |
ENGAGEMENT WITH EMPLOYEES |
This is covered as part of the Section 172(1) Statement in the Strategic Report. |
ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS |
This is covered as part of the Section 172(1) Statement in the Strategic Report. |
STREAMLINED ENERGY AND CARBON REPORTING |
The table below illustrates the group's energy consumption and emissions for the financial period: |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Report of the Director |
for the year ended 29 FEBRUARY 2024 |
Reported Energy and Emission |
2024 Consumption for the 12 month period |
2023 Consumption for the 6 month period |
('000) | ('000) |
Energy Consumption (kWh) | 14,565 | 6,563 |
Emissions from combustion of fuels (kg CO2e) | 3,261 | 1,403 |
Emissions from purchased electricity (kg CO2e) | 203 | 105 |
Total gross kg CO2e based on above | 3,464 | 1,508 |
Intensity ratio (kg CO2e per £1,000 turnover) | 37.23 | 36.34 |
The methodology used has been to calculate these figures by reference to units of consumption, and to apply conversion factors provided by DEFRA. The data excludes subsidiaries in the group which are below the reporting limits. |
As an organisation, Brand K Group continue to assess measures whereby the overall operational carbon footprint can be reduced. Having upgraded warehouse lighting in all warehouses, biomass boilers have been installed into both Wigan and Bedford locations, whose impact is to dramatically reduce the need for fossil fuels. Such boilers are fuelled through the controlled burning of waste pallet wood, whose own emissions are released having been filtered through purpose-built flues. |
DISCLOSURE IN THE STRATEGIC REPORT |
Certain disclosures in the Report of the Director required by s. 414c(II) of the Companies Act 2006 and Schedule 7 of the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 are given in the strategic report. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial 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 company and the group and of 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 judgements and accounting estimates that are reasonable and prudent; |
- |
state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and the group will continue in business. |
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence taking reasonable steps for the prevention and detection of fraud and other irregularities. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Report of the Director |
for the year ended 29 FEBRUARY 2024 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Brand K Holdings Ltd |
Opinion |
We have audited the financial statements of Brand K Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 February 2024 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 29 February 2024 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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 and 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 director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Brand K Holdings Ltd |
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 Group Strategic Report or the Report of the Director. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept 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 director |
As explained more fully in the Statement of Director's Responsibilities set out on page eight, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the director is responsible for assessing the 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. |
Report of the Independent Auditors to the Members of |
Brand K Holdings Ltd |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud |
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risks of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation. |
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates. |
Audit procedures performed by the engagement team included: |
- | discussions with management, including considerations of known or suspected instances of non-compliance with laws and regulations and fraud; |
- | gaining an understanding of management's controls designed to prevent and detect irregularities; and |
- | identifying and testing journal entries. |
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Brand K Holdings Ltd |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants and Statutory Auditor |
The Pinnacle |
170 Midsummer Boulevard |
Milton Keynes |
MK9 1BP |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Consolidated |
Statement of Income and |
Retained Earnings |
for the year ended 29 FEBRUARY 2024 |
Year Ended | Period |
29.2.24 | 14.3.22 to 28.2.23 |
as restated |
Notes | £ | £ | £ | £ |
TURNOVER | 4 | 140,142,353 | 59,982,486 |
Cost of sales | 94,163,035 | 39,384,585 |
GROSS PROFIT | 45,979,318 | 20,597,901 |
Distribution costs | 9,199,923 | 6,004,002 |
Administrative expenses | 28,473,789 | 11,235,033 |
37,673,712 | 17,239,035 |
8,305,606 | 3,358,866 |
Other operating income | 547,460 | 81,615 |
OPERATING PROFIT | 6 | 8,853,066 | 3,440,481 |
Derivative fair value adjustment | 8 | 326,841 | (5,152,461 | ) |
Exceptional cost provision | 8 | (800,000 | ) | - |
Supplier credit | 8 | 639,188 | - |
9,019,095 | (1,711,980 | ) |
Interest receivable and similar income | 15,777 | 1,652 |
9,034,872 | (1,710,328 | ) |
Interest payable and similar expenses | 9 | 1,839,645 | 614,113 |
PROFIT/(LOSS) BEFORE TAXATION | 7,195,227 | (2,324,441 | ) |
Tax on profit/(loss) | 10 | 1,922,597 | (560,185 | ) |
PROFIT/(LOSS) FOR THE FINANCIAL YEAR | ( |
) |
Retained earnings at beginning of year as previously reported |
(1,601,574 |
) |
- |
Dividends | 12 | (77,911 | ) | (35,680 | ) |
Prior year adjustment - corrections of material errors |
13 |
(198,362 |
) |
- |
RETAINED EARNINGS FOR THE GROUP AT END OF YEAR |
3,394,783 |
(1,799,936 |
) |
Profit/(loss) attributable to: |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Consolidated |
Statement of Income and |
Retained Earnings |
for the year ended 29 FEBRUARY 2024 |
Year Ended | Period |
29.2.24 | 14.3.22 to 28.2.23 |
as restated |
Notes | £ | £ | £ | £ |
Owners of the parent | 5,272,630 | (1,764,256 | ) |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Consolidated Balance Sheet |
29 FEBRUARY 2024 |
2024 | 2023 |
as restated |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 14 | 9,769,025 | 6,541,591 |
Tangible assets | 15 | 8,121,416 | 6,333,867 |
Investments | 16 | - | - |
Investment property | 17 | 1,536,649 | 1,537,298 |
19,427,090 | 14,412,756 |
CURRENT ASSETS |
Stocks | 18 | 20,645,526 | 19,226,286 |
Debtors | 19 | 27,061,841 | 21,442,997 |
Cash at bank and in hand | 20 | 1,990,762 | 3,212,004 |
49,698,129 | 43,881,287 |
CREDITORS |
Amounts falling due within one year | 21 | 55,738,602 | 49,556,832 |
NET CURRENT LIABILITIES | (6,040,473 | ) | (5,675,545 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES | 13,386,617 | 8,737,211 |
CREDITORS |
Amounts falling due after more than one year |
22 |
(4,273,793 |
) |
(6,397,360 |
) |
PROVISIONS FOR LIABILITIES | 26 | (1,637,702 | ) | (59,448 | ) |
NET ASSETS | 7,475,122 | 2,280,403 |
CAPITAL AND RESERVES |
Called up share capital | 27 | 4,080,339 | 4,080,339 |
Retained earnings | 28 | 3,394,783 | (1,799,936 | ) |
SHAREHOLDERS' FUNDS | 7,475,122 | 2,280,403 |
The financial statements were approved by the director and authorised for issue on 29 November 2024 and were signed by: |
A D Norford - Director |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Company Balance Sheet |
29 FEBRUARY 2024 |
2024 | 2023 |
as restated |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 14 |
Tangible assets | 15 |
Investments | 16 |
Investment property | 17 |
CURRENT ASSETS |
Debtors | 19 |
Cash at bank | 20 |
CREDITORS |
Amounts falling due within one year | 21 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
22 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 27 |
Retained earnings | 28 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 528,689 | 202,183 |
The financial statements were approved by the director and authorised for issue on |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Consolidated Cash Flow Statement |
for the year ended 29 FEBRUARY 2024 |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 10,703,327 | 5,877,855 |
Interest paid | (1,042,504 | ) | (234,415 | ) |
Interest element of hire purchase payments paid |
(75,658 |
) |
(28,173 |
) |
Finance costs paid | (721,483 | ) | (351,525 | ) |
Tax (paid)/received | 279,459 | (575,118 | ) |
Net cash from operating activities | 9,143,141 | 4,688,624 |
Cash flows from investing activities |
Purchase of intangible fixed assets | (17,500 | ) | - |
Purchase of tangible fixed assets | (793,478 | ) | (940,656 | ) |
Purchase of investment property | - | (1,537,298 | ) |
Sale of tangible fixed assets | 127,099 | 22,954 |
Reduction of investment property | 649 | - |
Purchase of subsidiary companies | (3,214,548 | ) | (896,259 | ) |
Cash balances on acquisition | 128 | 867,155 |
Loan granted | (650,000 | ) | - |
Interest received | 15,777 | 1,652 |
Net cash from investing activities | (4,531,873 | ) | (2,482,452 | ) |
Cash flows from financing activities |
New loans in period | 6,100,000 | 150,000 |
Loan repayments in period | (6,666,554 | ) | (875,068 | ) |
Hire purchase repayments in period | (361,203 | ) | (134,050 | ) |
Amount introduced by directors | (812 | ) | 17,281 |
Equity dividends paid | (77,911 | ) | (35,680 | ) |
Invoice discounting movement | (4,826,030 | ) | 1,883,349 |
Net cash from financing activities | (5,832,510 | ) | 1,005,832 |
(Decrease)/increase in cash and cash equivalents | (1,221,242 | ) | 3,212,004 |
Cash and cash equivalents at beginning of year |
2 |
3,212,004 |
- |
Cash and cash equivalents at end of year | 2 | 1,990,762 | 3,212,004 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Cash Flow Statement |
for the year ended 29 FEBRUARY 2024 |
1. | RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Profit/(loss) before taxation | 7,195,227 | (2,324,441 | ) |
Depreciation charges | 2,895,983 | 988,340 |
Loss on disposal of fixed assets | 21,106 | 21,689 |
Derivative fair value adjustment | (326,841 | ) | 5,152,461 |
Provision for legal cost | 800,000 | - |
Tax credit income | (258,518 | ) | - |
Finance costs | 1,839,645 | 614,113 |
Finance income | (15,777 | ) | (1,652 | ) |
12,150,825 | 4,450,510 |
Increase in stocks | (151,314 | ) | (1,816,330 | ) |
Decrease in trade and other debtors | 434,479 | 4,263,092 |
Decrease in trade and other creditors | (1,730,663 | ) | (1,019,417 | ) |
Cash generated from operations | 10,703,327 | 5,877,855 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 29 February 2024 |
29.2.24 | 1.3.23 |
£ | £ |
Cash and cash equivalents | 1,990,762 | 3,212,004 |
Period ended 28 February 2023 |
28.2.23 | 14.3.22 |
as restated |
£ | £ |
Cash and cash equivalents | 3,212,004 | - |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Cash Flow Statement |
for the year ended 29 FEBRUARY 2024 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
Other |
On | non-cash |
At 1.3.23 | Cash flow | acquisition | changes | At 29.2.24 |
£ | £ | £ | £ | £ |
Net cash |
Cash at bank |
and in hand | 3,212,004 | (1,221,370 | ) | 128 | 1,990,762 |
3,212,004 | (1,221,370 | ) | 128 | 1,990,762 |
Debt |
Finance leases | (1,011,679 | ) | 361,204 | (44,443 | ) | (341,035 | ) | (1,035,953 | ) |
Debts falling due |
within 1 year | (19,511,635 | ) | 5,352,824 | (3,840,641 | ) | - | (17,999,452 | ) |
Debts falling due |
after 1 year | (2,552,743 | ) | 39,760 | - | - | (2,512,983 | ) |
(23,076,057 | ) | 5,753,788 | (3,885,084 | ) | (341,035 | ) | (21,548,388 | ) |
Total | (19,864,053 | ) | 4,532,418 | (3,884,956 | ) | (341,035 | ) | (19,557,626 | ) |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements |
for the year ended 29 FEBRUARY 2024 |
1. | STATUTORY INFORMATION |
Brand K Holdings Ltd is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation and fair value of certain assets. |
The functional currency of Brand K Holdings Ltd is considered to be pounds sterling because that is the currency of the primary economic environment in which the Group operates. |
The group has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own income statement in these financial statements. |
Basis of consolidation |
The consolidated financial statements present the results of the Company and its subsidiaries ('Group') as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. |
In the balance sheet, the acquirer's identifiable assets and liabilities are initially recognised at their fair value at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. |
On 24 August 2022, Brand K Holdings Ltd acquired the entire share capital of Brand K Ltd. The consolidated financial statements incorporate the results of Brand K Ltd and its subsidiaries, using the purchase method with effect from 24 August 2022. |
On 31 March 2023, Brand K Ltd acquired the entire share capital of Marleton Cross Limited. The consolidated financial statements incorporate the results of Marleton Cross Limited, using the purchase method with effect from the date of acquisition. |
Uniform group accounting policies are used for determining the amounts to be included in the consolidated financial statements. Where necessary, amounts which have been reported by subsidiary undertakings in their individual financial statements are adjusted for on consolidation. |
Parent company disclosure exemptions |
In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102: |
- Only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the group and the parent company would be identical; |
- No cashflow statement has been presented for the company. |
Related party exemption |
The Group has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
In accordance with the provisions of FRS 102, turnover represents the right to consideration for goods sold. Turnover is recognised on dispatch. |
Goodwill |
Goodwill, being the amount paid in connection with the acquisition of businesses in 2022 and 2023, is being amortised evenly over its estimated useful life of ten years. |
Goodwill represents the differences between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the group's share of its identifiable assets and liabilities at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its estimated useful economic life of 10 years, net of any accumulated impairment losses. |
Other intangible assets |
Intangible assets are initially measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Patents and licences are being amortised evenly over their expected useful life of 20 years. |
Computer software is being amortised evenly over its estimated useful life of 20 years or 20% on a reducing balance. |
Tangible fixed assets |
Improvements to property | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
Tangible fixed assets are initially measured at cost and subsequently at cost less accumulated depreciation and any impairment losses. |
Investment property |
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss. |
Stocks |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete or slow moving stock. Cost includes all costs incurred in bringing each product to its present location and condition on a first in first out basis. Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Foreign currencies |
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. All exchange differences are dealt with through the Consolidated Statement of Comprehensive Income. |
Leases |
Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower, the present value of the minimum lease payments as determined at the inception of the lease) and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the Consolidated Statement of Comprehensive Income over the period of the leases to produce a constant periodic rate of interest on the remaining balance of the liabilities. |
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
These financial statements have been prepared on a going concern basis, which the director believes to be appropriate. |
The company is the parent of a group of companies and some group companies have incurred losses in this financial period. The group's subsidiaries provide cross-company guarantees to secure group debts. The owner of the group, who is also Managing Director, has confirmed the group will continue to provide financial support for loss-making companies in the group. The director has reviewed the latest group forecasts for the following year and has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Therefore he continues to adopt the going concern basis of accounting in preparing the annual consolidated financial statements. |
Valuation of investments |
Investments in subsidiaries are measured at cost less accumulated impairment. |
Finance costs |
Finance costs of debt are recognised in the Consolidated Statement of Comprehensive Income over the term of such instruments at a constant rate on the carrying amount. |
Invoice discounting |
Amounts due in respect of invoice discounting are included within either cash at bank or within other loans, depending on if the balance is positive or negative. The group can use these facilities to draw down a percentage of the value of certain sales invoices. The management and collection of trade debtors remains with the group. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. |
(i) Financial assets and liabilities |
All financial assets and liabilities are initially measured at transaction price (including transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet the above conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment. |
Other debt instruments not meeting these conditions are measured at fair value through profit or loss. |
Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the Group transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the Group, despite having retained some but not all of the significant risks and rewards of ownership, has transferred control of the asset to another party. |
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
Derivative financial instruments |
The Group uses forward currency contracts to manage its exposures to fluctuations in foreign currency exchange rates. |
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately. |
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities. |
Exceptional items |
Exceptional items are material items which derive from events or transactions falling within the ordinary activities of the group which need to be disclosed by nature of their size or incidence, in order that the accounts represent fairly the transactions for the year. |
Exceptional items are charged to the Consolidated Statement of Comprehensive Income, and included under the normal format headings to which they relate. The amount of each item is disclosed separately by way of a note, or on the face of the Consolidated Statement of Comprehensive Income if that degree of prominence is warranted because of the nature of the item. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the Group's accounting policies, which are described in note 2, the director is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
Critical judgements in applying the Group's accounting policies |
The following are the critical judgements that the director has made in the process of applying the group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements. |
Derivative financial instruments fair value |
Derivative financial instruments are valued at Fair Value which is an estimate reflecting the amount that the instruments could be sold for on the open market. The estimate used is the value provided by the instrument provider, which is derived from Bloomberg's 'Mark-to-Market' calculation of the instruments at the reporting date. The valuation is based on the probability of future movements in exchange markets and therefore includes elements of uncertainty. |
The classification between amounts falling due within one year and after more than one year in creditors is also subject to estimation uncertainty. As the contracts are settled in tranches, an assumption has been made that the liabilities will be realised evenly over the remaining term of the contracts, which end in October 2025. In reality this is unlikely to be the case, but it is not practical to estimate with any greater degree of accuracy. |
Impairment of assets |
The director constantly reviews factors likely to impact the value or recoverability of assets held by the group. In conducting his review, he considers both internal and external sources of information as well as past experiences and market conditions. As far as the director is aware there are no prevailing indications that assets held without impairment require one, or where an impairment has already been made that the amount of that impairment requires adjustment. |
Key sources of estimation uncertainty |
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below: |
Debtor provisioning |
The group exercises judgement as to its ability to collect outstanding receivables and in the event that any such recoverability becomes uncertain makes a provision against that debt. The group analyses its historical collection experience and current economic trends when determining the extent to which a provision should be made, as well as any debt insurance cover available. |
Inventory and finished goods provisions |
The accounting estimate related to valuation of inventories is considered a "critical accounting estimate" because it is susceptible to changes from period-to-period due to the requirement for management to make estimates relative to each of the underlying factors, ranging from purchasing, to sales, to production. If actual demand or market conditions differ from estimates, inventory adjustments to lower market values would result in a reduction to the carrying value of inventory, an increase in inventory write-offs and a decrease to gross margins. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
Rebate accruals |
The group estimates the accrual required for volume rebates to be paid after the period end. |
Depreciation |
The group estimates the residual value and useful economic life of fixed assets. |
Goodwill |
On consolidation, the director estimates the fair value of the acquired assets and liabilities. The excess of the fair value of consideration above the fair value of the acquired assets and liabilities is recognised as goodwill on consolidation. This is regularly reviewed for impairment based on the trading position. Goodwill is being amortised evenly over 10 years as it is not possible to estimate its useful economic life. |
Property dilapidations |
Under certain operating leases for land and buildings, the group is obligated to make repairs of dilapidations to the leased property upon the expiry of the lease. The group provides for the best estimate of the future unrecoverable costs of its obligations under these leases. |
4. | TURNOVER |
The turnover and profit (2023 - loss) before taxation are attributable to the principal activities of the group. |
An analysis of turnover by class of business is given below: |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Sale of goods | 139,389,495 | 59,599,730 |
Rendering of services | 752,858 | 382,756 |
140,142,353 | 59,982,486 |
An analysis of turnover by geographical market is given below: |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
United Kingdom | 130,756,152 | 56,229,106 |
Europe | 8,805,753 | 3,604,252 |
Rest of the world | 580,448 | 149,128 |
140,142,353 | 59,982,486 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
5. | EMPLOYEES AND DIRECTORS |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Wages and salaries | 22,805,055 | 8,395,353 |
Social security costs | 1,696,364 | 850,343 |
Other pension costs | 588,509 | 192,787 |
25,089,928 | 9,438,483 |
The average number of employees during the year was as follows: |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
Management | 12 | 11 |
Sales | 61 | 64 |
Transport | 80 | 68 |
Stock and operations | 482 | 368 |
Finance | 23 | 25 |
Repairs | 6 | 6 |
Office | 49 | 47 |
The average number of employees by undertakings that were proportionately consolidated during the year was 727 (2023 - 589 ) . |
Total key management personnel compensation for the period was £867,352 (2023 - £322,449). |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Director's remuneration | 8,160 | 10,835 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Hire of plant and machinery | 106,998 | 69,173 |
Other operating leases | 881,299 | 251,711 |
Depreciation - owned assets | 1,530,368 | 510,115 |
Depreciation - assets on hire purchase contracts | 282,799 | 57,024 |
Loss on disposal of fixed assets | 21,106 | 21,689 |
Goodwill amortisation | 1,076,479 | 341,488 |
Patents and licences amortisation | 2,877 | 1,439 |
Computer software amortisation | 3,465 | 1,893 |
Foreign exchange differences | (282,504 | ) | (155,543 | ) |
Rent of property | 2,867,588 | 1,145,166 |
7. | AUDITORS' REMUNERATION |
2024£ | 2023£ |
Mercer & Hole LLP and Just Audit, Auditor's remuneration |
- Audit of the group financial statements | 21,000 | 25,875 |
- Audit of the subsidiary financial statements | 133,000 | 71,741 |
- Taxation services | - | - |
- Other advisory services | - | - |
154,000 | 97,616 |
Elsby & Co Limited |
- Audit of the group financial statements | - | - |
- Audit of the subsidiary financial statements | 29,440 | 76,621 |
- Taxation services | 39,398 | 23,440 |
- Other advisory services | 324,224 | 94,250 |
393,062 | 194,311 |
8. | EXCEPTIONAL ITEMS |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Derivative fair value adjustment | 326,841 | (5,152,461 | ) |
Exceptional cost provision | (800,000 | ) | - |
Supplier credit | 639,188 | - |
166,029 | (5,152,461 | ) |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
The Derivative fair value adjustment relates to complex financial derivatives entered into. It includes Counter Target Accrual Redemption Forward (TARF) contracts entered into in order to fix into foreign currency rates until October 2025. FRS 102 requires these contracts to be valued at fair value. The fair value at 28 February 2023 reflected the maximum possible losses sustainable in the future. In this reporting period, the actual results have been better than had been reflected, leading to a recovery of the losses reported in the previous year, of £326,841, comprising the movement in the fair value of the year end liability and actual losses incurred in the year. Further details are included in Note 30. |
A provision has been made of £800,000 relating to an accident at a company warehouse, which has led to an investigation by Environmental Health. The provision relates to a potential fine for certain health and safety breaches. |
The supplier credit relates to a court judgement in the group's favour, relating to over-charged costs, which resulted in the writing off of a significant supplier creditor balance. The credit amounted to £810,940, less legal costs of £171,752. |
9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Bank interest | 277,454 | - |
Invoice discounting interest | 196,237 | 107,182 |
Loan interest | 509,538 | 84,311 |
Inland Revenue interest | 9,169 | 9,321 |
Hire purchase interest | 75,658 | 28,173 |
Other interest paid | 50,106 | 33,601 |
Invoice financing charges | 721,483 | 351,525 |
1,839,645 | 614,113 |
10. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Current tax: |
UK corporation tax | 1,144,344 | (218,850 | ) |
Deferred tax | 778,253 | (341,335 | ) |
Tax on profit/(loss) | 1,922,597 | (560,185 | ) |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
10. | TAXATION - continued |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Profit/(loss) before tax | 7,195,227 | (2,324,441 | ) |
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 24.490 % (2023 - 19 %) |
1,762,111 |
(441,644 |
) |
Effects of: |
Expenses not deductible for tax purposes | 527,807 | (21,159 | ) |
Income not taxable for tax purposes | (87,621 | ) | 66,610 |
Capital allowances in excess of depreciation | (1,144 | ) | - |
Utilisation of tax losses | (155,602 | ) | (59,455 | ) |
Adjustments to tax charge in respect of previous periods | 214,668 | - |
Effect of change in rate on deferred tax balance | (4,533 | ) | (53,295 | ) |
Deferred tax not provided for | 177,120 | (30,238 | ) |
Effect of prior year adjustment | - | (21,004 | ) |
Research and development relief for prior years | (510,209 | ) | - |
Total tax charge/(credit) | 1,922,597 | (560,185 | ) |
From 1 April 2023, the Corporation Tax main rate for non-ring-fenced profits has been increased to 25%. |
11. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
12. | DIVIDENDS |
Period |
14.3.22 |
Year Ended | to |
29.2.24 | 28.2.23 |
as restated |
£ | £ |
Interim | 77,911 | 35,680 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
13. | PRIOR YEAR ADJUSTMENT |
During the year a new company was brought into the group which has a similar principal activity as another group company, being the manufacture of shower trays. There has been a different method of accounting for shower tray moulds between the two companies and the group directors have decided to align the policies in each company with each other. |
Previously, the cost of moulds used for the production of shower trays has been written off to the Profit and Loss Account at the time incurred. The accounts have been restated to recognise these items as fixed assets with a useful life of 5 years, which is regarded as more accurately reflecting the ongoing value of these assets to the business. |
Additionally, an accrual for sales credits was under-stated at 28 February 2023 by £624,081. |
The effect of this is as follows: |
Changes to the balance sheet | At 28 February 2023 |
Notes |
As previously reported |
Adjustment |
As restated |
£ | £ | £ |
Fixed assets |
Tangible assets | 1 | 6,064,167 | 269,699 | 6,333,867 |
Creditors |
Deferred tax effect of accruals | 2 | 215,468 | (156,020 | ) | 59,448 |
Accruals | 2 | 2,836,278 | 624,081 | 3,460,359 |
Net assets | 2,478,765 | (198,362 | ) | 2,280,403 |
Capital and reserves |
Retained earnings | 1 | (1,601,574 | ) | (198,362 | ) | (1,799,936 | ) |
Total equity | 2,478,765 | (198,362 | ) | 2,280,403 |
Changes to the profit and loss account | At 28 February 2023 |
As previously | Adjustment | As restated |
£ | £ | £ |
Sales | 2 | 60,606,567 | (624,081 | ) | 59,982,486 |
Cost of sales | 1 | 39,654,283 | (269,699 | ) | 39,384,584 |
Gross profit | 20,952,284 | (354,382 | ) | 20,597,902 |
Deferred tax effect of accruals | 2 | 404,165 | 156,020 | 560,185 |
Profit/(loss) for the financial period | (1,565,894 | ) | (198,362 | ) | (1,764,256 | ) |
Reconciliation of changes in equity | 28 February |
2023 |
Notes | £ |
Equity as previously reported | 2,478,765 |
Adjustments to prior year |
Introducing fixed assets | 1 | 425,530 |
Depreciation of fixed assets | 1 | (155,831 | ) |
Increasing accruals | 2 | (624,081 | ) |
Deferred tax effect of accruals | 2 | 156,020 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
Equity as adjusted | 2,280,403 |
Reconciliation of changes in profit/(loss) for the previous financial period |
2023 |
Notes | £ |
Loss as previously reported | (1,565,894 | ) |
Adjustments to prior year |
Introducing fixed assets | 1 | 269,699 |
Increasing accruals | 2 | (624,081 | ) |
Deferred tax effect of accruals | 2 | 156,020 |
Loss as adjusted | (1,764,256 | ) |
Notes to reconciliation |
1. Introducing fixed assets |
Correction to include assets previously written off to the profit and loss account when incurred, and the subsequent depreciation of the assets. |
2. Increasing accruals |
Correction to include provision for contract claims not provided for in the previous period, and the related effect on deferred tax. |
14. | INTANGIBLE FIXED ASSETS |
Group |
Patents |
and | Computer |
Goodwill | licences | software | Totals |
£ | £ | £ | £ |
COST |
At 1 March 2023 | 6,829,765 | 25,790 | 30,855 | 6,886,410 |
Additions | 4,292,755 | - | 17,500 | 4,310,255 |
At 29 February 2024 | 11,122,520 | 25,790 | 48,355 | 11,196,665 |
AMORTISATION |
At 1 March 2023 | 341,488 | 1,438 | 1,893 | 344,819 |
Amortisation for year | 1,076,479 | 2,877 | 3,465 | 1,082,821 |
At 29 February 2024 | 1,417,967 | 4,315 | 5,358 | 1,427,640 |
NET BOOK VALUE |
At 29 February 2024 | 9,704,553 | 21,475 | 42,997 | 9,769,025 |
At 28 February 2023 | 6,488,277 | 24,352 | 28,962 | 6,541,591 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
14. | INTANGIBLE FIXED ASSETS - continued |
Group |
On 31 March 2023, Brand K Ltd acquired the shares of Marleton Cross Limited, and its dormant subsidiaries, for a combined total cost of £3,214,541. Revenue of the subsidiaries for the 11 months ending 29 February 2024 was £15m and the loss after tax was £808k. Acquisition accounting has been applied. The assets and liabilities acquired were as follows: |
Carrying value | Fair value |
£ | £ |
Tangible fixed assets | 2,614,405 | 2,614,405 |
Stocks | 1,267,926 | 1,267,926 |
Debtors | 5,206,270 | 5,206,270 |
Cash at bank | 128 | 128 |
Creditors falling due within one year | (10,166,942 | ) | (10,166,942 | ) |
Creditors falling due after one year | - | - |
Provisions for liabilities | - | - |
Total identifiable assets and liabilities | (1,078,213 | ) | (1,078,213 | ) |
Goodwill | - | 4,292,754 |
(1,078,213 | ) | 3,214,541 |
15. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | Plant and | and |
property | machinery | fittings |
£ | £ | £ |
COST |
At 1 March 2023 | 286,090 | 4,713,169 | 812,386 |
Additions | 10,331 | 949,189 | 61,436 |
Disposals | (4,699 | ) | (178,297 | ) | - |
Arising on acquisition | - | 2,472,737 | 76,975 |
At 29 February 2024 | 291,722 | 7,956,798 | 950,797 |
DEPRECIATION |
At 1 March 2023 | 27,964 | 479,466 | 61,900 |
Charge for year | 47,862 | 1,347,785 | 174,468 |
Eliminated on disposal | (4,699 | ) | (123,424 | ) | - |
At 29 February 2024 | 71,127 | 1,703,827 | 236,368 |
NET BOOK VALUE |
At 29 February 2024 | 220,595 | 6,252,971 | 714,429 |
At 28 February 2023 | 258,126 | 4,233,703 | 750,486 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
15. | TANGIBLE FIXED ASSETS - continued |
Group |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
COST |
At 1 March 2023 | 501,586 | 631,615 | 6,944,846 |
Additions | 58,425 | 55,134 | 1,134,515 |
Disposals | (96,747 | ) | (33,366 | ) | (313,109 | ) |
Arising on acquisition | 64,694 | - | 2,614,406 |
At 29 February 2024 | 527,958 | 653,383 | 10,380,658 |
DEPRECIATION |
At 1 March 2023 | 30,341 | 11,308 | 610,979 |
Charge for year | 121,825 | 121,227 | 1,813,167 |
Eliminated on disposal | (20,774 | ) | (16,007 | ) | (164,904 | ) |
At 29 February 2024 | 131,392 | 116,528 | 2,259,242 |
NET BOOK VALUE |
At 29 February 2024 | 396,566 | 536,855 | 8,121,416 |
At 28 February 2023 | 471,245 | 620,307 | 6,333,867 |
The net book value of tangible fixed assets includes £1,259,801 (2023 - £577,689) in respect of assets held under hire purchase contracts. |
16. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 March 2023 |
and 29 February 2024 |
NET BOOK VALUE |
At 29 February 2024 |
At 28 February 2023 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
16. | FIXED ASSET INVESTMENTS - continued |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: Thistle Down Barn, Holcot Lane, Sywell, Northampton, Northamptonshire, NN6 0BG |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Thistle Down Barn, Holcot Lane, Sywell, Northampton, Northamptonshire, NN6 0BG |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Limited. |
Registered office: Unit 12 Manton Centre, Manton Lane, Manton Industrial Estate, Bedford, MK41 7PX |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Limited. |
Brand K Holdings Ltd has provided a guarantee to its subsidiary, The Shower Tray Company Ltd, which is exempt from the requirements of the Act relating to the audit of individual accounts. |
Registered office: Unit 1-4 Whitehall Industrial Estate, Ashfield Way Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Limited. |
Registered office: Units 1-4 Whitehall Industrial Estate, Ashfield Way, Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, JT Holdings (UK) Limited. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
16. | FIXED ASSET INVESTMENTS - continued |
Registered office: Units 1-4 Whitehall Industrial Estate, Ashfield Way, Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, JT Group (UK) Limited. |
Registered office: Units 1-4 Whitehall Estate, Ashfield Way, Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, JT Group (UK) Limited. |
Registered office: Units 1-4 Whitehall Industrial Estate, Ashfield Way, Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Just Trays Limited. |
Registered office: Units 1-4 Whitehall Industrial Estate, Ashfield Way, Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Choice Criteria Limited. |
Registered office: Units 1-4 Whitehall Industrial Estate, Ashfield Way, Farnley, Leeds, West Yorkshire, LS12 5JB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, JT Group (UK) Limited. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
16. | FIXED ASSET INVESTMENTS - continued |
Registered office: 26 Springfield Way, Anlaby, East Yorkshire, HU10 6RJ |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Limited. |
Brand K Holdings Ltd has provided a guarantee to its subsidiary, Summerbridge Holdings Ltd, which is exempt from the requirements of the Act relating to the audit of individual accounts. |
Registered office: 26 Springfield Way, Anlaby, East Yorkshire, HU10 6RJ |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Summerbridge Holdings Limited. |
Brand K Holdings Ltd has provided a guarantee to its subsidiary, Humber Doors Limited, which is exempt from the requirements of the Act relating to the audit of individual accounts. |
Registered office: Unit 20 Strawberry Lane Industrial Estate, Strawberry Lane, Willenhall, West Midlands, WV13 3RS |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Limited. |
Registered office: 20 Strawberry Lane Industrial Estate, Strawberry Lane, Willenhall, West Midlands, WV13 3RS |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Limited. |
Brand K Holdings Ltd has provided a guarantee to its subsidiary, UK Bespoke Products Ltd, which is exempt from the requirements of the Act relating to the audit of individual accounts. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
16. | FIXED ASSET INVESTMENTS - continued |
Registered office: Thistledown Barn, 204 Holcot Lane, Sywell, Northamptonshire, NN6 0BG |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Ltd. |
Registered office: 155 Wellingborough Road, Rushden, Northamptonshire, NN10 9TB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Marleton Cross Limited. |
Registered office: 155 Wellingborough Road, Rushden, Northamptonshire, NN10 9TB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Marleton Cross Limited. |
Registered office: 155 Wellingborough Road, Rushden, Northamptonshire, NN10 9TB |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Ltd. |
Registered office: Thistle Down Barn, Holcot Lane, Sywell, Northampton, NN6 0BG |
Nature of business: |
% |
Class of shares: | holding |
Shares are held by a subsidiary undertaking, Brand K Ltd. Brand K Holdings Ltd has provided a guarantee to its subsidiary, Humber Doors Limited, which is exempt from the requirements of the Act relating to the audit of individual accounts. |
All companies above are incorporated in England and Wales. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
17. | INVESTMENT PROPERTY |
Group |
Total |
£ |
FAIR VALUE |
At 1 March 2023 | 1,537,298 |
Disposals | (649 | ) |
At 29 February 2024 | 1,536,649 |
NET BOOK VALUE |
At 29 February 2024 | 1,536,649 |
At 28 February 2023 | 1,537,298 |
The investment property was purchased during the prior period for £1,537,298 and in the director's opinion there has been no significant change in valuation since it was purchased. |
Company |
Total |
£ |
FAIR VALUE |
At 1 March 2023 |
Disposals | ( |
) |
At 29 February 2024 |
NET BOOK VALUE |
At 29 February 2024 |
At 28 February 2023 |
18. | STOCKS |
Group |
2024 | 2023 |
as restated |
£ | £ |
Raw materials | 2,530,692 | 2,022,228 |
Work-in-progress | 123,047 | 162,290 |
Finished goods | 17,991,787 | 17,041,768 |
20,645,526 | 19,226,286 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
19. | DEBTORS |
Group | Company |
2024 | 2023 | 2024 | 2023 |
as restated | as restated |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 22,546,566 | 19,252,807 |
Amounts owed by group undertakings | - | - |
Other debtors | 1,169,099 | 306,472 |
VAT | 18,170 | 92,637 | - | - |
Tax | 425,625 | 223,063 |
Called up share capital not paid | 102 | 102 |
Prepayments | 2,252,279 | 1,567,916 |
26,411,841 | 21,442,997 |
Amounts falling due after more than one | year: |
Other debtors | 650,000 | - |
Aggregate amounts | 27,061,841 | 21,442,997 |
Included within trade debtors is £21,711,619 (2023 - £17,125,165) which form part of a confidential invoice discounting facility. |
20. | CASH AT BANK AND IN HAND |
The group cash at bank and in hand balance of £1,990,762 (2023 - £3,212,004) includes a deposit of £1,254,545 (2023 - £2,800,000) which is reserved for use against the group's obligations under derivative contracts, see Note 30 for more details. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
21. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
as restated | as restated |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 23) | 4,110,000 | 3,826,667 |
Other loans (see note 23) | 13,889,452 | 15,684,968 |
Hire purchase contracts (see note 24) | 374,070 | 299,507 |
Trade creditors | 24,211,361 | 19,874,769 |
Amounts owed to group undertakings | - | - |
Tax | 1,399,431 | 37,093 |
Social security and other taxes | 542,417 | 381,127 |
VAT | 2,538,857 | 2,340,342 | 13,914 | - |
Other creditors | 2,200,126 | 1,830,868 |
Directors' current accounts | - | 812 | - | 812 |
Accrued expenses | 4,428,635 | 3,460,359 |
Obligation under derivative |
contracts | 2,044,253 | 1,820,320 |
55,738,602 | 49,556,832 |
Details of the obligations under derivative contracts can be found in Note 30. |
22. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
as restated | as restated |
£ | £ | £ | £ |
Bank loans (see note 23) | 1,110,564 | 533,187 |
Other loans (see note 23) | 1,402,419 | 2,019,556 |
Hire purchase contracts (see note 24) | 661,883 | 712,172 |
Obligation under derivative |
contracts | 1,098,927 | 3,132,445 |
4,273,793 | 6,397,360 |
Details of the obligations under derivative contracts can be found in Note 30. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
23. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
2024 | 2023 | 2024 | 2023 |
as restated | as restated |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 4,110,000 | 3,826,667 |
Other loans | 770,332 | 1,580,459 | 770,332 | 1,096,800 |
Confidential invoice discounting | 13,119,120 | 14,104,509 | - | - |
17,999,452 | 19,511,635 |
Amounts falling due between one and two | years: |
Bank loans - 1-2 years | 1,010,000 | 510,000 |
Other loans - 1-2 years | 618,679 | 1,096,800 | 618,679 | 1,096,800 |
1,628,679 | 1,606,800 |
Amounts falling due between two and five | years: |
Bank loans - 2-5 years | 100,564 | 23,187 |
Other loans - 2-5 years | 783,740 | 922,756 | 783,740 | 922,756 |
884,304 | 945,943 |
24. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2024 | 2023 |
as restated |
£ | £ |
Net obligations repayable: |
Within one year | 374,070 | 299,507 |
Between one and five years | 661,883 | 712,172 |
1,035,953 | 1,011,679 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
24. | LEASING AGREEMENTS - continued |
Group |
Non-cancellable operating | leases |
2024 | 2023 |
as restated |
£ | £ |
Within one year | 2,725,441 | 2,617,900 |
Between one and five years | 6,026,235 | 4,956,825 |
In more than five years | 2,165,333 | 2,802,958 |
10,917,009 | 10,377,683 |
25. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group | Company |
2024 | 2023 | 2024 | 2023 |
as restated | as restated |
£ | £ | £ | £ |
Bank loans | 5,220,564 | 4,359,854 |
Other loans | 2,172,751 | 3,600,015 | 2,172,751 | 3,116,356 |
Hire purchase contracts | 1,035,953 | 1,011,679 | - | - |
Invoice discounting | 13,119,120 | 14,104,509 | - | - |
21,548,388 | 23,076,057 |
The obligations under hire purchase contracts are secured on the assets to which they relate. |
The Group has the following securities at the balance sheet date: |
Shawbrook Bank Limited holds a fixed and floating charge over the assets of the Company in respect of the Brand K Group facility of up to £32.9m (2023 - £26.5m). The group facilities include invoice discounting over receivables of up to £29.5m (2023 - £21.5m), in aggregate with the inventory facility, which is up to £5m (2023 - £5m), a cashflow facility of up to £3.41m (2023 - £1.6m). The cashflow facility is repayable in 36 monthly instalments. The advance rate for the invoice discounting facility is 85%. There is a group cross company guarantee in place as security for the charge. The bank also holds a right of group set-off. |
Post year end, the group entered a new facility agreement up to £41.6m. It includes invoice discounting over receivables of up to £35m, in aggregate with the inventory facility up to £5m, and a cashflow facility of up to £6.6m. |
The total balances secured at the year end across the group are as follows: confidential invoice discounting facility: £13.1m (2023 - £14.1m), inventory facility: £2.6m (2023 - £3.2m) and cashflow facility: £2.6m (2023 - £1.2m). |
A former shareholder of the subsidiary, Brand K Limited, holds a charge over 50% of the entire share capital of Brand K Limited. The amount outstanding as at 29 February 2024, discounted to present value and included in Other loans, was £2.1m (2023 - £3.1m). |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
26. | PROVISIONS FOR LIABILITIES |
Group |
2024 | 2023 |
as restated |
£ | £ |
Deferred tax | 837,702 | 59,448 |
Other provisions | 800,000 | - |
Aggregate amounts | 1,637,702 | 59,448 |
Group |
Deferred | Other |
tax | provisions |
£ | £ |
Balance at 1 March 2023 | 59,448 | - |
Provided during year | 778,254 | 800,000 |
Balance at 29 February 2024 | 837,702 | 800,000 |
The main rate of corporation tax increased from 19% to 25% effective from 1 April 2023. The rate has been reflected in the calculation of deferred tax at the balance sheet date. |
Details of other provisions are shown in Note 8. |
27. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal Value: | £ |
4,080,339 | Ordinary | £1 | 4,080,339 |
28. | RESERVES |
Group |
Retained |
earnings |
£ |
At 1 March 2023 | (1,601,574 | ) |
Prior year adjustment | (198,362 | ) |
(1,799,936 | ) |
Profit for the year | 5,272,630 |
Dividends | (77,911 | ) |
At 29 February 2024 | 3,394,783 |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
28. | RESERVES - continued |
Company |
Retained |
earnings |
£ |
At 1 March 2023 |
Profit for the year |
Dividends | ( |
) |
At 29 February 2024 |
29. | PENSION COMMITMENTS |
The Group operates defined contribution pension schemes for the benefit of its employees. At the year end, there are outstanding contributions payable to the pension provider of £101,250 (2023 - £55,587). |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
30. | OTHER COMMITMENTS |
A group company has entered into contractual commitments regarding financial derivatives. These foreign currency derivative contracts have led to a financial liability as at 29 February 2024 with a total estimated fair value of £3,143,180, which is included in Creditors: amounts falling due within one year and after more than one year, and the movement as an exceptional item in the Consolidated Statement of Comprehensive Income. |
The contracts outstanding at the year end are as follows: |
Contract type |
Buy/Sell |
Start date |
End date |
Frequency |
Notional amount |
Geared amount |
Strike rate |
TARF | USD/GBP | 13/10/2022 | 10/10/2025 | Weekly | $300k p/w |
$600k p/w |
£1:$1.1650 |
Forward+ | GBP/USD | 17/01/2023 | 10/10/2025 | Weekly | $600k p/w |
N/A | £1:$1.2575 |
For the TARF Buy USD contracts, when the spot rate is below the 'strike rate' at the monthly/weekly expiry dates, the group has the right to buy the 'notional amount' at the 'strike rate', provided they have not met the 'Counter limit' or the 'Cumulative Accrued Profit (CAP)', described below.If the spot rate is above the 'strike rate' at the monthly/weekly expiry dates, the group has the obligation to buy the 'geared amount' at the 'strike rate'. |
For the Sell USD Forward Plus (+) contract, when the spot rate is above the 'strike rate' at the weekly expiry dates, the group has the right to sell the 'notional amount' at the 'strike rate'.If the spot rate is below the 'strike rate' and above the 'European Knock In' rate of £1:$1.1575, there are no obligations and the group has the right to exchange in the spot market. If the spot rate is below the 'European Knock In' rate, the group has the obligation to sell the 'notional amount' at the 'strike rate'. |
The weekly Buy USD TARF has a CAP on gains of 1.20, where once it is reached the trade on the contract ceases. |
Each month that the spot rate is below the strike rate, the difference between the two is added to the CAP. When this cumulative profit reaches 1.20, the contract ceases to exist. |
The group has a contract with a provider of the financial derivatives contracts which requires a margin of £400,000 be paid by the group and held on their account in the event that the net market value of all open positions has declined and the unrealised loss when marked to market exceeds £2,000,000. Each time the net market value of all open positions declines by a further £400,000, a cash margin of the same amount is required to be transferred. The provider has sole discretion that all or part of such margin is repayable to the group. |
The company has entered into numerous smaller currency hedging transactions as part of its normal currency management activities. |
See also further explanation within the Strategic Report. |
31. | RELATED PARTY DISCLOSURES |
During the year, the Group purchased raw materials totalling £288,731 (2023 £3,245,159) from a company with a common director that ceased to be a related party during the year. Subsequently, the Group received a credit of £973,128 relating to over-charged costs. There were no outstanding balances with this company at the reporting date. |
BRAND K HOLDINGS LTD (REGISTERED NUMBER: 13974101) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 29 FEBRUARY 2024 |
32. | POST BALANCE SHEET EVENTS |
Since the year end, the Group has acquired new subsidiaries, Paladin Heritage Holdings Ltd and Paladin Heritage Ltd, for a purchase price of £7.6m. |
33. | CONTROLLING PARTY |
The controlling party is A D Norford. |