Company Registration No. 07970662 (England and Wales)
WOOL WAREHOUSE DIRECT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
WOOL WAREHOUSE DIRECT LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of income and retained earnings
9
Balance sheet
10
Statement of cash flows
11
Notes to the financial statements
12 - 20
Detailed trading and profit and loss account
WOOL WAREHOUSE DIRECT LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr Andrew Smith
Mrs Holly Smith
Company number
07970662
Registered office
12 Longfield Road
Sydenham Industrial Estate
Leamington Spa
Warwickshire
CV31 1XB
Auditor
Phipps Henson McAllister
22-24 Harborough Road
Kingsthorpe
Northampton
NN2 7AZ
Accountants
Grineaux Accountants Limited
20 Market Hill
Southam
Warwickshire
CV47 0HF
WOOL WAREHOUSE DIRECT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
The directors present the strategic report for the year ended 31 May 2024.
Principle Activities and Business Model
The principle activity of Wool Warehouse Direct Limited is the online retail of soft craft supplies to home consumers.
The company's business model is simple, to buy and sell products at a fair price, look after its staff, customers and suppliers, and operate in a financially viable and sensible manner.
Business Review
It has been another decent year. The business has posted growth in both turnover and profitability. The in-house development of our own private label range of yarns, which commenced in late 2022, has started to bear fruit, and was the primary driver of growth during the period. This has continued post year end, with further developments in this area expected to contribute significantly to future growth.
Turnover increased by 10.7% from £16,630,295 to £18,405,789. Pre-tax profit increased by 27.9% from £2,267,725 to £2,900,187. Position at year end showed net assets of £9,889,077.
Levels of business are being monitored closely by the directors, and the business has the flexibility to adapt to changes in market conditions.
Principal risks and uncertainties
The principle risks & uncertainties facing the business include the following:
Market Risk
The business operates in a highly competitive market. Heavy discounting by our competitors constrains our growth. Our primary competitors have been loss-making for a number of years, so we consciously do not seek to emulate that approach.
Interest Rate Risk
The business has no borrowings, so has limited exposure to interest rates.
Energy Cost Risk
Energy costs represent a relatively small proportion of the business’s cost base. A 255kWp solar panel system has been installed at the main warehouse, which should mitigate future volatility in the energy markets, and significantly reduce the company’s carbon footprint.
Foreign currency risk
The business transacts with all customers in GBP, so the foreign currency risk relates primarily to our suppliers based overseas. If there are significant changes to the cost of goods sourced in a foreign currency, our GBP selling prices are adjusted accordingly to compensate.
Credit Risk - Customers
Customers pre-pay for orders, and are only able to order items that we have in stock for immediate despatch, so credit risk in this area is negligible.
Credit Risk - Suppliers
The business benefits from a good credit rating, affording healthy credit limits and payment terms of 30-60 days with our suppliers. The business voluntarily pays suppliers well within these terms, reducing the risk of any restrictions in supply should an external event compromise the credit rating of businesses in our industry.
WOOL WAREHOUSE DIRECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
Key performance indicators
The directors consider the following important metrics when evaluating the performance of the business:
Turnover increased by 10.7% from £16,630,295 to £18,405,789.
Gross margin increased from 34.6% to 37.0%.
Pre-tax profit increased by 27.9% from £2,267,725 to £2,900,187.
Mr Andrew Smith
Director
24 January 2025
WOOL WAREHOUSE DIRECT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £180,000 (2023: £180,000).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr Andrew Smith
Mrs Holly Smith
Post reporting date events
On 31 October 2024, the entire share capital was acquired by Wool Warehouse Group Limited (company number 16043962) in a share for share exchange as part of a group reconstruction.
Future developments
The directors intend for the company to continue its strategy of organic growth.
Auditor
Phipps Henson McAllister were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
WOOL WAREHOUSE DIRECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 5 -
On behalf of the board
Mr Andrew Smith
Director
24 January 2025
WOOL WAREHOUSE DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WOOL WAREHOUSE DIRECT LIMITED
- 6 -
Opinion
We have audited the financial statements of Wool Warehouse Direct Limited (the 'company') for the year ended 31 May 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
WOOL WAREHOUSE DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WOOL WAREHOUSE DIRECT LIMITED
- 7 -
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 and the directors' report.
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, 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 directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
WOOL WAREHOUSE DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WOOL WAREHOUSE DIRECT LIMITED
- 8 -
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the sector in which they operate. We determined that the following laws and regulations were most significant: the Companies Act 2006, and UK corporate taxation laws.
We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making inquiries to the management. We corroborated our inquiries through our review of board minutes and other papers.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
challenging assumptions and judgments made by management in its significant accounting estimates;
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
assessing the extent of compliance with the relevant laws and regulations.
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from an error, as fraud may involve collusion deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.
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 members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Mr Stuart Armstrong FCCA (Senior Statutory Auditor)
for and on behalf of Phipps Henson McAllister
24 January 2025
Chartered Accountants &
Statutory Auditors
22-24 Harborough Road
Kingsthorpe
Northampton
NN2 7AZ
WOOL WAREHOUSE DIRECT LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
18,405,789
16,630,295
Cost of sales
(11,592,605)
(10,867,412)
Gross profit
6,813,184
5,762,883
Administrative expenses
(4,122,520)
(3,538,320)
Operating profit
5
2,690,664
2,224,563
Interest receivable and similar income
8
209,523
43,162
Profit before taxation
2,900,187
2,267,725
Tax on profit
7
(726,798)
(486,103)
Profit for the financial year
2,173,389
1,781,622
Retained earnings brought forward
7,895,688
6,294,066
Dividends
9
(180,000)
(180,000)
Retained earnings carried forward
9,889,077
7,895,688
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WOOL WAREHOUSE DIRECT LIMITED
BALANCE SHEET
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
578,854
577,650
Current assets
Stocks
11
3,451,989
2,663,399
Debtors
13
409,115
254,733
Investments
12
900,000
1,600,000
Cash at bank and in hand
5,915,581
4,225,220
10,676,685
8,743,352
Creditors: amounts falling due within one year
14
(1,221,648)
(1,280,801)
Net current assets
9,455,037
7,462,551
Total assets less current liabilities
10,033,891
8,040,201
Provisions for liabilities
Deferred tax liability
15
144,714
144,413
(144,714)
(144,413)
Net assets
9,889,177
7,895,788
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
18
9,889,077
7,895,688
Total equity
9,889,177
7,895,788
The financial statements were approved by the board of directors and authorised for issue on 24 January 2025 and are signed on its behalf by:
Mr Andrew Smith
Director
Company Registration No. 07970662
WOOL WAREHOUSE DIRECT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,655,852
2,511,450
Income taxes paid
(556,889)
(452,468)
Net cash inflow from operating activities
1,098,963
2,058,982
Investing activities
Purchase of tangible fixed assets
(138,125)
(322,758)
Loan made to connected party
700,000
100,000
Interest received
209,523
43,162
Net cash generated from/(used in) investing activities
771,398
(179,596)
Financing activities
Dividends paid
(180,000)
(180,000)
Net cash used in financing activities
(180,000)
(180,000)
Net increase in cash and cash equivalents
1,690,361
1,699,386
Cash and cash equivalents at beginning of year
4,225,220
2,525,834
Cash and cash equivalents at end of year
5,915,581
4,225,220
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
1
Accounting policies
Company information
Wool Warehouse Direct Limited is a private company limited by shares incorporated in England and Wales. The registered office is 12 Longfield Road, Sydenham Industrial Estate, Leamington Spa, Warwickshire, CV31 1XB.
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 the revaluation of freehold properties and to include investment properties. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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:
Plant and equipment
15% reducing balance
Office equipment
Straight line over three years
Motor vehicles
25% reducing balance
Fixtures and fittings
Straight line over ten years
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.
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -
1.5
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet 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.
1.9
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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.
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
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.
1.13
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
All turnover is attributable to the principal activity of the company.
2024
2023
£
£
Turnover analysed by geographical market
UK
15,219,319
13,509,357
USA & Canada
2,204,735
2,117,227
Australasia
439,739
439,966
Rest of the World
541,996
563,745
18,405,789
16,630,295
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 15 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
2
2
Administrative
16
15
Production
69
64
Total
87
81
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,029,359
1,727,514
Social security costs
174,625
145,518
Pension costs
39,419
35,063
2,243,403
1,908,095
5
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
138
Fees payable to the company's auditor for the audit of the company's financial statements
10,892
10,575
Depreciation of owned tangible fixed assets
136,881
135,730
Loss on disposal of tangible fixed assets
40
-
Operating lease charges
343,385
260,921
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
23,157
22,178
Company pension contributions to defined contribution schemes
238
238
22,416
22,416
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 16 -
7
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
726,497
415,909
Deferred tax
Origination and reversal of timing differences
301
70,194
Total tax charge
726,798
486,103
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
2,900,187
2,267,725
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
725,047
453,545
Tax effect of expenses that are not deductible in determining taxable profit
1,751
1,046
Capital allowances in excess of depreciation
(301)
(38,739)
Other adjustments
57
Deferred tax
301
70,194
Taxation charge for the year
726,798
486,103
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
202,634
40,693
Other interest income
6,889
2,469
Total income
209,523
43,162
9
Dividends
2024
2023
£
£
Final paid
180,000
180,000
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
10
Tangible fixed assets
Plant and equipment
Office equipment
Motor vehicles
Fixtures and fittings
Total
£
£
£
£
£
Cost
At 1 June 2023
524,396
82,415
132,035
350,035
1,088,881
Additions
88,561
8,045
41,519
138,125
Disposals
(41,654)
(41,654)
At 31 May 2024
612,957
48,806
132,035
391,554
1,185,352
Depreciation and impairment
At 1 June 2023
227,734
66,917
37,302
179,278
511,231
Depreciation charged in the year
57,781
16,265
23,683
39,152
136,881
Eliminated in respect of disposals
(41,614)
(41,614)
At 31 May 2024
285,515
41,568
60,985
218,430
606,498
Carrying amount
At 31 May 2024
327,442
7,238
71,050
173,124
578,854
At 31 May 2023
296,662
15,498
94,733
170,757
577,650
11
Stocks
2024
2023
£
£
Finished goods and goods for resale
3,451,989
2,663,399
12
Current asset investments
2024
2023
£
£
Loan to connected party
900,000
1,600,000
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
113,984
152,074
Other debtors
69
Prepayments and accrued income
295,062
102,659
409,115
254,733
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
518,584
698,571
Corporation tax
230,515
60,907
Other taxation and social security
284,429
310,534
Other creditors
133,256
117,713
Accruals and deferred income
54,864
93,076
1,221,648
1,280,801
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
144,714
144,413
2024
Movements in the year:
£
Liability at 1 June 2023
144,413
Charge to profit or loss
301
Liability at 31 May 2024
144,714
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
17
Retirement benefit schemes
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.
At the balance sheet date the amount due to the pension scheme was £Nil (2023: £6,632).
18
Profit and loss reserves
The profit and loss reserve includes all current and prior period retained profits.
19
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
100,000
100,000
Between two and five years
79,167
179,167
179,167
279,167
20
Events after the reporting date
On 31 October 2024, the entire share capital was acquired by Wool Warehouse Group Limited (Company number 16043962) in a share for share exchange as part of a group reconstruction.
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2024
2023
2024
2023
£
£
£
£
Other related parties
40
300,068
172,253
Mr Andrew Smith is a director and majority shareholder of Q Enterprises UK Limited.
During the year the company paid rent amounting to £295,762 (2023: £166,896), made purchases of £4,306 (2023: £5,357) and made sales of £40 (2023: £Nil) with Q Enterprises UK Limited (Co Reg No. 04551561).
At the balance sheet date the amount outstanding to Q Enterprises UK Limited was £577 (2023: £51,524) and the amount outstanding from Q Enterprises UK Limited was £40 (2023: £Nil)
WOOL WAREHOUSE DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
21
Related party transactions
(Continued)
- 20 -
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Other related parties
900,000
1,600,000
At the start of the accounting period the company was owed £1.6 million from Q Enterprises UK Limited relating to a loan made in 2021. During the accounting period the company repaid a further £700,000 leaving a balance due from Q Enterprises UK Limited of £900,000 at the year end. The loan is considered repayable on demand. No interest is charged on this loan.
22
Ultimate controlling party
Following the successful Group Reconstruction the ultimate controlling parties are Mr A. Smith and Mrs H. Smith by virtue of their majority shareholding in Wool Warehouse Group Limited.
23
Analysis of changes in net funds
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
4,225,220
1,690,361
5,915,581
24
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
2,173,389
1,781,622
Adjustments for:
Taxation charged
726,798
486,103
Investment income
(209,523)
(43,162)
Loss on disposal of tangible fixed assets
40
-
Depreciation and impairment of tangible fixed assets
136,881
135,730
Movements in working capital:
Increase in stocks
(788,590)
(143,832)
Increase in debtors
(154,382)
(66,936)
(Decrease)/increase in creditors
(228,761)
361,925
Cash generated from operations
1,655,852
2,511,450
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