Company registration number 00344808 (England and Wales)
UGO FOODS GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
UGO FOODS GROUP LIMITED
COMPANY INFORMATION
Director
P L Ugo
S Cooke
Company number
00344808
Registered office
1 Hertsmere Industrial Park
Warwick Road
Borehamwood
Herts
WD6 1GT
Auditor
Gravita II LLP
Aldgate Tower
2 Leman Street
London
E1 8FA
UGO FOODS GROUP LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 24
UGO FOODS GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -
The director presents the strategic report for the year ended 30 April 2024.
Fair review of the business
The Directors report that post tax profit for the year was £399,798 (2023: £50,094). Although the post tax profit has increased due to the considerable investment in research and development the company has undertaken, the overall trading profitability has been impacted by increased wage costs, continued high energy costs, an increase in interest rates and the additional investment into promotional activity to drive volume and respond to the ‘cost of living‘ challenge.
Despite these challenges, the company has continued to invest in research and development along with infrastructure and machinery automation to improve efficiencies, increase capacity, and become more sustainable.
Principal risks and uncertainties
The Directors consider that the principal risks and uncertainties for the Group are as follows:
· The continued strong business relationships with each of our key customers.
· The stability of the value of Sterling against the Euro due to the volume of purchases from the Euro zone, and particularly Italy.
· The continued relative stability in the commodity markets and in particular wheat, dairy, and feed grains due to the volume of purchases relating to these types of products.
· The stability of the energy market and the impact it could have on the company’s energy costs.
. The impact of the changes to minimum wage and Employers National insurance being implemented in Apr 25 and how this cost is dealt without impacting profitability.
· The continued support of the Company's bankers and shareholders for ensuring sufficient funding remains available to meet the Company's strategic requirements.
Future development and performance
The company have continued to broaden their customer base and products, whilst existing customers recover post-covid. Whilst 2024/25 has been equally challenging for similar reasons to the year before, brand exposure is increasing significantly, and the new product development pipeline is creating further growth which will have a positive effect on future results.
Key performance indicators
2024 2023
£ £
Turnover 22,047,470 21,674,862
Gross profit 5,704,452 5,838,894
Operating (loss)/ profit (162,180) 230,390
Profit after tax 399,798 50,094
S Cooke
Director
27 January 2025
UGO FOODS GROUP LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
The director presents his annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company continued to be that of production and supply of pasta and noodles.
Results and dividends
The results for the year are set out on page 7.
Interim ordinary dividends were paid during the year amounting to £585,000 (2023: £564,500). The directors do not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Paul L Ugo
(Resigned 11 May 2023 and reappointed 7 May 2024)
S Cooke
A Richardson
(Resigned 7 May 2024)
Financial instruments
The company's principal financial instruments comprise trade debtors, bank balances and other loans, trade creditors, and short term foreign exchange forward contracts. The main purpose of those financial instruments is to raise funds for and finance the company's operations.
The company uses short term foreign exchange forward contracts in order to minimise the currency risk arising from the translation of the value of goods purchased from abroad.
Trade debtors are managed in respect of credit and cash flow policies are closely monitored to evaluate the timings of repayments.
In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of loans at variable rates of interest.
In respect of other loans, these comprise loans from a director and another individual at commercial rates of interest.
These loans are being repaid over a period of time in accordance with formal agreements between the parties.
Trade creditors are managed in respect of liquidity risk by ensuring the sufficient funds are available to meet amounts when they fall due, and are in accordance with the credit terms agreed with suppliers.
Auditor
The auditors, Gravita II LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
UGO FOODS GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
S Cooke
Director
27 January 2025
UGO FOODS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF UGO FOODS GROUP LIMITED
- 4 -
Opinion
We have audited the financial statements of Ugo Foods Group Limited (the 'company') for the year ended 30 April 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted this statement is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
UGO FOODS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF UGO FOODS GROUP LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the company operates;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company including, but not limited to, food and safety regulations, health and safety regulations, employment legislation, the Companies Act 2006 and taxation legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
UGO FOODS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF UGO FOODS GROUP LIMITED (CONTINUED)
- 6 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
understanding the business model as part of the control and business environment;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence and enquiring with the company of actual and potential non-compliance with laws and regulations; and
reading the minutes of meeting of those charged with governance.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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 member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Sarah Wilson FCA
Senior Statutory Auditor
For and on behalf of Gravita II LLP
27 January 2025
Chartered Accountants
Statutory Auditor
Aldgate Tower
2 Leman Street
London
E1 8FA
UGO FOODS GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
22,047,470
21,674,862
Cost of sales
(16,343,018)
(15,835,968)
Gross profit
5,704,452
5,838,894
Distribution costs
(664,603)
(676,572)
Administrative expenses
(5,202,029)
(4,931,932)
Operating (loss)/profit
4
(162,180)
230,390
Interest receivable and similar income
7
5,493
626
Interest payable and similar expenses
8
(337,615)
(226,805)
(Loss)/profit before taxation
(494,302)
4,211
Tax on (loss)/profit
9
894,100
45,883
Profit for the financial year
399,798
50,094
UGO FOODS GROUP LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 APRIL 2024
30 April 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,429,385
3,831,032
Investments
12
152
152
3,429,537
3,831,184
Current assets
Stocks
14
1,100,049
1,372,492
Debtors
15
3,842,122
3,774,465
Cash at bank and in hand
6,344
2,214
4,948,515
5,149,171
Creditors: amounts falling due within one year
16
(5,704,082)
(6,316,719)
Net current liabilities
(755,567)
(1,167,548)
Total assets less current liabilities
2,673,970
2,663,636
Creditors: amounts falling due after more than one year
17
(1,828,349)
(1,632,813)
Provisions for liabilities
Deferred tax liability
20
58,637
58,637
(58,637)
(58,637)
Net assets
786,984
972,186
Capital and reserves
Called up share capital
22
11,372
11,372
Share premium account
23
228,891
228,891
Capital redemption reserve
23
5,498
5,498
Profit and loss reserves
23
541,223
726,425
Total equity
786,984
972,186
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 27 January 2025 and are signed on its behalf by:
S Cooke
Director
Company registration number 00344808 (England and Wales)
UGO FOODS GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 9 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 May 2022
11,372
228,891
5,498
1,240,331
1,486,092
Year ended 30 April 2023:
Profit and total comprehensive income
-
-
-
50,094
50,094
Dividends
10
-
-
-
(564,000)
(564,000)
Balance at 30 April 2023
11,372
228,891
5,498
726,425
972,186
Year ended 30 April 2024:
Profit and total comprehensive income
-
-
-
399,798
399,798
Dividends
10
-
-
-
(585,000)
(585,000)
Balance at 30 April 2024
11,372
228,891
5,498
541,223
786,984
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
1
Accounting policies
Company information
Ugo Foods Group Limited is a private company limited by shares incorporated in England and Wales. The registered office and principal place of business is 1 Hertsmere Industrial Park, Warwick Road, Borehamwood, Herts, WD6 1GT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Ugo Foods Group Limited is a wholly owned subsidiary of Appetite Holdings Limited and the results of Ugo Foods Group Limited are included in the consolidated financial statements of Appetite Holdings Limited which are available from 1 Hertsmere Industrial Park, Warwick Road, Borehamwood, Herts, WD6 1GT.
1.2
Going concern
The accounts have been prepared on a going concern basis. The validity of the going concern concept is dependent on the continuing business with key customers and the support of the shareholders as well as the continued use of the invoice financing facility, as outlined in note 16, to support monthly cash flows.true
Having considered the above, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 11 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Leasehold
over the life of the lease
Plant and machinery
over 3 to 15 years
Fixtures, fittings & equipment
over 2 to 10 years
Motor vehicles
over 1 to 3 years
Assets in the course of construction are not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 12 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Raw materials are valued at cost on a first in first out basis. Cost of finished goods comprises the cost of direct materials and direct labour.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, cash and bank balances, and loans to fellow group companies, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in
profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.15
Research and development expenditure
Expenditure on research and development is written off to the profit and loss account in the year in which it is incurred.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible fixed assets
Accounting for tangible fixed assets involves the use of estimates and judgements for determining the useful lives over which these are to be depreciated and amortised, and the existence and amount of any impairment.
Tangible assets are depreciated on a straight line basis over their estimated useful lives and taking into account their expected residual values. When the Company estimates useful lives, various factors are considered including expected technological obsolescence and the expected usage of the asset.
The Directors regularly review these asset lives and change them as necessary to reflect the estimated current remaining lives in light of technological changes, future economic utilisation and physical condition of the assets concerned. A significant change in asset lives can have a significant change on depreciation and amortisation charges for the period.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 16 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Sales of goods
22,047,470
21,674,862
2024
2023
£
£
Other revenue
Interest income
5,493
626
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
69,450
34,500
Depreciation of owned tangible fixed assets
578,903
619,921
Operating lease charges
1,123,622
853,535
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Office and management
44
47
Production
89
87
Distribution
17
19
Total
150
153
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,726,553
4,518,667
Social security costs
438,618
459,568
Pension costs
114,572
108,239
5,279,743
5,086,474
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 17 -
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
155,176
467,299
Company pension contributions to defined contribution schemes
3,000
15,000
158,176
482,299
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
n/a
314,004
Company pension contributions to defined contribution schemes
n/a
12,000
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
5,493
626
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
144,839
103,594
Interest on invoice finance arrangements
168,004
104,145
Interest on finance leases and hire purchase contracts
21,807
16,512
Other interest
2,965
2,554
337,615
226,805
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(894,100)
Deferred tax
Origination and reversal of timing differences
(45,883)
Total tax credit
(894,100)
(45,883)
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
9
Taxation
(Continued)
- 18 -
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(494,302)
4,211
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.50%)
(123,576)
821
Tax effect of expenses that are not deductible in determining taxable profit
26,426
Unutilised tax losses carried forward
42,455
Change in unrecognised deferred tax assets
(45,883)
Permanent capital allowances in excess of depreciation
(12,181)
(22,971)
Depreciation on assets not qualifying for tax allowances
105,434
120,885
Research and development tax credit
(894,100)
(117,945)
Other permanent differences
(12,132)
(7,175)
Under/(over) provided in prior years
(41)
Taxation credit for the year
(894,100)
(45,883)
10
Dividends
2024
2023
£
£
Interim paid
585,000
564,000
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
11
Tangible fixed assets
Land and buildings Leasehold
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 May 2023
2,858,137
82,674
6,978,514
845,547
80,319
10,845,191
Additions
200,906
200,906
Disposals
(56,220)
(56,220)
Transfers
43,281
(283,580)
214,788
25,511
At 30 April 2024
2,901,418
7,193,302
871,058
24,099
10,989,877
Depreciation and impairment
At 1 May 2023
1,017,458
5,480,597
467,318
48,786
7,014,159
Depreciation charged in the year
153,756
322,786
94,478
7,883
578,903
Eliminated in respect of disposals
(32,570)
(32,570)
At 30 April 2024
1,171,214
5,803,383
561,796
24,099
7,560,492
Carrying amount
At 30 April 2024
1,730,204
1,389,919
309,262
3,429,385
At 30 April 2023
1,840,679
82,674
1,497,917
378,229
31,533
3,831,032
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and machinery
530,442
190,990
12
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
13
152
152
13
Subsidiaries
These financial statements are separate company financial statements for Ugo Foods Group Limited.
Details of the company's subsidiaries at 30 April 2024 are as follows:
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
13
Subsidiaries
(Continued)
- 20 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Dellugo Ltd
England and Wales
Ordinary
100.00
L Ugo (Property) Company Ltd
England and Wales
Ordinary
100.00
The registered office of the above companies is 1 Hertsmere Industrial Park, Warwick Road, Borehamwood, Herts, WD6 1GT.
14
Stocks
2024
2023
£
£
Raw materials and consumables
719,890
969,300
Finished goods and goods for resale
380,159
403,192
1,100,049
1,372,492
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,178,515
2,206,952
Corporation tax recoverable
884,204
10,403
Amounts owed by group undertakings
285,786
918,381
Other debtors
334,682
335,434
Prepayments and accrued income
158,935
303,295
3,842,122
3,774,465
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
18
660,317
382,828
Obligations under finance leases
19
121,917
94,424
Trade creditors
2,161,083
2,093,448
Corporation tax
25,228
Other taxation and social security
99,099
226,373
Other creditors
1,477,261
2,051,360
Accruals and deferred income
1,184,405
1,443,058
5,704,082
6,316,719
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
16
Creditors: amounts falling due within one year
(Continued)
- 21 -
Details of the security in place for the bank loan is set out in note 18.
Other creditors including the sum of £1,432,697 (2023: £2,011,412) being the HSBC invoice financing net creditor are secured by a fixed and floating charges over all the assets of the company.
17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
770,371
1,422,223
Obligations under finance leases
19
231,330
210,590
Other creditors
826,648
1,828,349
1,632,813
Details of the security in place for the bank loan is set out in note 18.
18
Loans and overdrafts
2024
2023
£
£
Bank loans
1,430,688
1,805,051
Payable within one year
660,317
382,828
Payable after one year
770,371
1,422,223
A CBILS loan was taken out in June 2021 for the sum of £2,000,000 and is to be repaid by June 2026. Interest is payable on the loan at a rate of 3.99% per annum over the Bank of England base rate.
The Director, P Ugo, has provided a guarantee for the loan and there is a cross guarantee in place for the bank loan between the company and its parent undertaking Appetite Holdings Limited. GFSL have also provided a guarantee over this CBILS loan and a debenture is in place comprising a fixed and floating charge over all the assets and undertakings of the group.
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
133,729
109,602
In two to five years
238,971
229,060
372,700
338,662
Less: future finance charges
(19,453)
(33,648)
353,247
305,014
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 1.9 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
58,637
58,637
There were no deferred tax movements in the year.
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
114,572
108,239
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
11,372
11,372
11,372
11,372
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 23 -
23
Reserves
Share premium
This reserve records the amount above the nominal value received for shares sold, less transaction costs.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
Profit and loss reserves
Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
819,927
519,213
Between two and five years
3,110,622
3,051,793
In over five years
8,769,192
9,497,961
12,699,741
13,068,967
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
2024
2023
£
£
Interest receivable
712
626
The company has taken advantage of the exemption available in FRS 102 section 33 "Related party disclosures" whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Other related parties
32,646
31,934
UGO FOODS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 24 -
26
Directors' transactions
Description
% Rate
Opening balance
Interest charged
Closing balance
£
£
£
Directors' Loan account
2.00
31,934
712
32,646
31,934
712
32,646
27
Ultimate controlling party
The company is a wholly owned subsidiary of Appetite Holdings Limited, a company incorporated in England and Wales.
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