Company Registration No. 07717083 (England and Wales)
MELLORS CATERING SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 17 JULY 2024
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MELLORS CATERING SERVICES LIMITED
COMPANY INFORMATION
Director
Mr M Timmerman
Company number
07717083
Registered office
West Lancs Technology Management Centre
White Moss Business Park
Moss Lane View
Skelmersdale
England
WN8 9TN
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MELLORS CATERING SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 22
MELLORS CATERING SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 17 JULY 2024
- 1 -

The director presents the strategic report for the year ended 17 July 2024.

Review of the business

The company trades as a contract catering company serving meals on a daily basis under long term fixed price or cost-plus management fee contracts. These are mainly serving the education sector (Primary and Secondary Schools in north of England).

 

The company’s management team has continued to work on improving quality and financial contribution from the core site portfolio, re-structing and re-negotiating longer term arrangements, and not renewing contracts that do not meet the financial and or operational criteria of the company.

 

Food inflation has stabilised over this financial year at around 2%, with food cost margin better controlled from last year, partly due to the impact of the company’s investment in procurement talent and IT and quality local supply chain, combined with a stable and experienced area manager and operations team.

 

Food and sundries inflation combined with annual wage review and NJC cost are mitigated through annual review of catering subsidies and or customer tariffs and free school meal allowances. The entitlement of households’ access to free school meal entitlement has increased post pandemic which has brought further importance to the services and nutrition provided by Mellors. Free school meals represent 49.3% of revenue increasing from 47.1% last year. Demographic swings of primary and secondary children is mixed dependant on geographical area, but overall in shallow decline.

 

In year national business cost pressures of volatile energy markets do not substantially impact the company as services are provided on third party premises.

 

The company started the year with 332 trading contracts and ended it with 318 contracts. Less contacts but of larger size, reflected in the company’s sales level of £43.5m. This shift in contract numbers demonstrates the company’s continued strategy to step away from poorly performing and small contracts and continue to trade and improve catering contracts that surpass or have the potential to meet minimum contribution levels.

 

Contract catering is a labour intense sector of the hospitality industry, with complex and high levels of pension arrangements. Company labour margin this year is 54.4%, a betterment from last year’s 54.7%. The number of employees at the start of the year was 1,751, increasing to 1,764 at this year-end. 94% of company employees are female.

 

Improved work practices of Mellors circa 60 mobile support staff and investment in IT, has enabled the closure of one satellite support office. This has enabled the focus of all company support resources under one roof, Mellors Support Office (Skelmersdale), delivering overhead saving and environmental improvements.

 

Effective management and healthy market conditions has delivered this year has seen the best performance of EBITA in the history of the company, catalysed by offering the highest level of food and service in the UK education sector, reflected in our client satisfaction rating and portfolio retention.

MELLORS CATERING SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 2 -
Principal risks and uncertainties

92% of the company’s business focussed in the education sector, the remained in commercial and business and industry catering contacts. This strategic balance of business ensures healthy payment terms and minimises bad debts. The management team have carried out effective work during the year making significant inroads into long term debts of historic / closed contacts.

 

Last year’s enhanced holiday pay legislation has now been revoked, and new employment terms are in place for newly employed catering staff.

 

Annual enhancements of national living wage / NJC pay reviews and forthcoming employer’s NI responsibilities – these are funded through the company’s annual review of catering subsidies and customer prices.

 

Throughout the business, staff have and continue to be regularly updated both on company progress and relevant measures to keep them safe whilst providing service in order to avoid accidents at work which is the risk that is always present in a working environment such as that found in the company’s contracts.

 

Although contract retention is good considering the company’s maturing site portfolio, new contact gains has proved stubborn in the year; a market in post pandemic consolidation combined with a new and under development sales team for Mellors. Both aspects are set to improve and proactively the company is expanding geographical operating area southwards.

 

Long serving director and chairman Mr. Klaas Timmerman passed away during the year. Founder and Managing Director Mr. Mark Timmerman has taken on his limited remit. CEO Tony Trainor has also flexed his responsibilities in support whilst initiating the engagement of Mr. Andrew Walker as Operation Director, a new post for the company.

 

Ms. Julie Leigh has been introduced to the company as Finance Director. Mr. James Tredwell (non-executive director) is thanked for providing quality support and financial advice over this transitional period.

Development and performance

The management team has continued to invest in and implement new HR, procurement and employee information software solutions. During this year Mellors has also sourced a new food, menu and allergen management IT system to be launched next financial year.

 

Accounting systems were reviewed in year. The company’s current IT provider (Access) has been chosen to partner with, developing improved bespoke IT software.

 

The company launched new on-site branding for both Primary schools and Secondary schools, a new strap line, management mantras and a new interactive website supporting clients, customers, suppliers and staff. Mellors “valued added team” is tasked with launching new branded food and menu innovations.

 

Between the close of the accounting period and the date of these accounts, the director and senior management team have continually reviewed the trading performance and the value of the assets shown in the Balance Sheet. In their post Balance Sheet review the director concluded that the attached accounts represent a true and fair view of the company’s financial position as represented by the Balance Sheet as at the accounts date and that the asset values have not been impaired.

Key performance indicators

It is important, especially as the company continues to be impacted by increased costs in its key production costs, that the company continues to improve the control of these day to day production costs and new working conditions, menus and customer offerings were introduced during the period under review and measured at each monthly management meeting.

 

The ongoing and current performance of the business by unit is measured at the end of every trading week and compared to budgets, prior year incorporating factors such as trading days, sales per unit per day and sales per employee hour.

 

The director are pleased to report that all these indicators are showing steady trading as at the date of signing these accounts.

MELLORS CATERING SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 3 -
Results and dividends

During a period of continued difficult trading the company generate profits before tax of £1,116k comparable to the profits generated in the previous year £642k. This performance represents the ability of the company to trade profitably during ongoing challenging trading conditions.

 

The Director has paid a dividend to the holding company of £120k for the year.

Promoting the success of the company

As this is the second year as a Large Company the Director and Senior Management Team have had regard to their S172 responsibilities and how the company has to act differently and focussed on issues with the inclusion of all employees in the communication process.

 

As reported last year, the company implemented a new internet-based staff communication system, two way communication channels. This is provided highly successful with benefits to staff motivation and company culture. Short / long term sickness and staff absenteeism have all reduced, though cause and effect is hard to establish. Mellors newly improved website also bring additional communication channels for all.

 

At time of writing, Mellors has been shortlisted for 3 awards in the national contact catering sector annual event, the best performance in the company’s 30 year history. We look forward to sharing future successes with all our employees and 120,000 customers.

 

On behalf of the board

Mr M Timmerman
Director
24 February 2025
MELLORS CATERING SERVICES LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 17 JULY 2024
- 4 -

The director presents his annual report and financial statements for the year ended 17 July 2024.

Principal activities

The principal activity of the company continued to be that of a contract catering group serving meals on a daily basis, predominantly into the education sector.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £120,000. The director does 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:

Mr M Timmerman
Mr K Timmerman
(Deceased 21 March 2024)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

MELLORS CATERING SERVICES LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 5 -
Energy and carbon report

Mellors Catering Services provides quality bespoke long term catering services on third party premises; predominantly primary schools, secondary schools and colleges. Energy usage and waste management on these premises sits with-in the domain of our clients. Mellors has responsibility to use these resources effectively.

 

As a user of our clients’ energy and developer of on-site waste, we minimise our impact though staff training, menu planning and flexible year group meal portion, this reduces food waste which we target at 3.0%. Mellors also has effective management through procurement and use of food packaging and disposables, targeted at 2.0% and achieved this year 1.8%.

 

To reduce use of disposables further, in this financial year the company moved to near zero use of single use sandwich boxes as we switched all our food production to bagels and baguettes served in reduced bio-degradable sleeves. This single innovation has removed 483,000 sandwiches wedges (pa) from landfill.

 

Where all Mellors employees can influence the company’s environmental impact, there has been significant successes. For example, Mellors is working with Olio to redistribute surplus food to people in the community who need it, rather than it ending up in landfill. The initial trial with two Mellors education sites has proven positive. In the Autumn term 2024, the sites donated a level of food waste which has the positive effect of 417kg CO2 emissions.

 

In line with company strategy, all company cars are either hybrid or electric. This choice of vehicle aligns with the company’s environmental initiatives through ISO14001 accreditation. It also demonstrates a dedication to adopting eco-friendly solutions. Investing in hybrid and electric vehicles is a vital step towards achieving a greener future and minimising the company’s environmental impact and reduced our CO2 emissions.

 

The company encourages meetings via online meeting platforms as a priority (4 people maximum), car sharing & has reviewed site and area manager locations to minimise transportation. The average six month milage per driver has reduced by 15% to 8,605 miles per driver. Logistics mileage is minimized through 61% of our £22m of food purchased locally.

 

Improved work practices enabled the closer of our regional Sheffield office this fiscal year, relocating all resources centrally to Mellors Support Office (Skelmersdale). This promotes better communications and reduced energy use. Annual figure of 58,824 KWh which is on par with previous year, 13,825kg of CO2.

 

The company’s greatest opportunity for environmental protection is the education, habit forming and attitude nudging of the 125,000 young people we serve daily. We target on-site messages and promotions to influence Mellors customers approach to purchasing, food waste, waste segregation, life-style choices, method of transport to school etc.

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:

MELLORS CATERING SERVICES LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 6 -

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.

On behalf of the board
Mr M Timmerman
Director
24 February 2025
MELLORS CATERING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MELLORS CATERING SERVICES LIMITED
- 7 -
Opinion

We have audited the financial statements of Mellors Catering Services Limited (the 'company') for the year ended 17 July 2024 which comprise the statement of comprehensive income, the balance sheet, 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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.

 

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information 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:

MELLORS CATERING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MELLORS CATERING SERVICES LIMITED
- 8 -
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:

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

 

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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

MELLORS CATERING SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MELLORS CATERING SERVICES LIMITED
- 9 -

Identifying and assessing potential risks related to irregularities

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:

 

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income; posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.

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.

Use of our report

This report is made solely to the company's member 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.

Christopher Johnson FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
24 February 2025
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MELLORS CATERING SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 17 JULY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
47,649,313
46,345,461
Distribution costs
(45,590,627)
(44,491,216)
Administrative expenses
(933,297)
(1,212,301)
Operating profit
4
1,125,389
641,944
Interest payable and similar expenses
7
(8,990)
-
0
Profit before taxation
1,116,399
641,944
Tax on profit
8
(347,756)
(120,200)
Profit for the financial year
768,643
521,744

The profit and loss account has been prepared on the basis that all operations are continuing operations.

MELLORS CATERING SERVICES LIMITED
BALANCE SHEET
AS AT
17 JULY 2024
17 July 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
52,010
19,877
Current assets
Stocks
11
544,860
520,347
Debtors falling due after more than one year
12
351,383
473,163
Debtors falling due within one year
12
9,421,824
7,351,863
Cash at bank and in hand
3,739,087
3,667,496
14,057,154
12,012,869
Creditors: amounts falling due within one year
13
(8,357,622)
(6,929,847)
Net current assets
5,699,532
5,083,022
Net assets
5,751,542
5,102,899
Capital and reserves
Called up share capital
16
1
1
Profit and loss reserves
5,751,541
5,102,898
Total equity
5,751,542
5,102,899
The financial statements were approved by the board of directors and authorised for issue on 24 February 2025 and are signed on its behalf by:
Mr M Timmerman
Director
Company registration number 07717083 (England and Wales)
MELLORS CATERING SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 17 JULY 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 18 July 2022
1
4,661,154
4,661,155
Year ended 17 July 2023:
Profit and total comprehensive income
-
521,744
521,744
Dividends
9
-
(80,000)
(80,000)
Balance at 17 July 2023
1
5,102,898
5,102,899
Year ended 17 July 2024:
Profit and total comprehensive income
-
768,643
768,643
Dividends
9
-
(120,000)
(120,000)
Balance at 17 July 2024
1
5,751,541
5,751,542
MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 17 JULY 2024
- 13 -
1
Accounting policies
Company information

Mellors Catering Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is West Lancs Technology Management Centre, White Moss Business Park, Moss Lane View, Skelmersdale, England, WN8 9TN.

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.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:

 

 

The financial statements of the company are consolidated in the financial statements of Mellors Consolidated Limited. These consolidated financial statements are available from its registered office, West Lancs Technology Management Centre, White Moss Business Park, Moss Lane View, Skelmersdale, United Kingdom, WN8 9TN.

1.2
Going concern

Atruet the time of approving the financial statements, 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 and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Revenue is recognised when services are delivered and the company has fulfilled its contractual obligation to the customer.

MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
1
Accounting policies
(Continued)
- 14 -
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:

Fixtures and fittings
15% per annum straight line
Motor vehicles
15% per annum straight line

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
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.

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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method.

MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
1
Accounting policies
(Continued)
- 15 -
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 loans from fellow group companies 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

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 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.

MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
1
Accounting policies
(Continued)
- 16 -
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 profit and loss account, 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.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
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.

MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 17 -
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.

A source of estimation uncertainty is the bad debt provision but the directors have used their historical knowledge and customer payment terms to determine the provision. The directors do not believe there to be any other critical judgements or key sources of estimation uncertainty.

3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Catering services
47,649,313
46,345,461

All turnover arose in the United Kingdom.

4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
5,500
4,160
Operating lease charges
236,476
187,722
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
19,200
16,000
MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 18 -
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Catering services
1,758
1,880
Directors
2
2
Total
1,760
1,882

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
22,220,093
21,817,067
Social security costs
1,161,521
985,019
Pension costs
1,917,517
1,506,470
25,299,131
24,308,556
7
Interest payable and similar expenses
2024
2023
£
£
Other interest
8,990
-
0
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
262,355
55,991
Adjustments in respect of prior periods
79,275
28,362
Total current tax
341,630
84,353
Deferred tax
Origination and reversal of timing differences
6,126
35,847
Total tax charge
347,756
120,200

From the 1 April 2023 the effective tax rate is 25%.

MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
8
Taxation
(Continued)
- 19 -

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
1,116,399
641,944
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.78%)
279,100
133,396
Tax effect of expenses that are not deductible in determining taxable profit
1,192
8,490
Adjustments in respect of prior years
79,275
28,362
Group relief
(11,811)
(26,105)
Remeasurement of deferred tax for future changes in tax rates
-
0
6,057
Other items
-
0
(30,000)
Taxation charge for the year
347,756
120,200
9
Dividends
2024
2023
£
£
Interim paid
120,000
80,000
10
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 18 July 2023
64,792
21,990
86,782
Additions
37,633
-
0
37,633
Disposals
(64,792)
-
0
(64,792)
At 17 July 2024
37,633
21,990
59,623
Depreciation and impairment
At 18 July 2023
64,792
2,113
66,905
Depreciation charged in the year
-
0
5,500
5,500
Eliminated in respect of disposals
(64,792)
-
0
(64,792)
At 17 July 2024
-
0
7,613
7,613
Carrying amount
At 17 July 2024
37,633
14,377
52,010
At 17 July 2023
-
0
19,877
19,877
MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 20 -
11
Stocks
2024
2023
£
£
Raw materials and consumables
544,860
520,347
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,548,664
5,233,490
Amounts owed by group undertakings
3,052,577
1,378,882
Other debtors
670,814
512,581
Prepayments and accrued income
1,045,054
116,069
9,317,109
7,241,022
Deferred tax asset (note 14)
104,715
110,841
9,421,824
7,351,863
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
351,383
473,163
Total debtors
9,773,207
7,825,026

Amounts owed by fellow group undertakings are interest free and repayable on demand.

13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
3,036,837
2,495,210
Corporation tax
262,251
210,429
Other taxation and social security
667,155
523,595
Other creditors
3,516,397
3,065,895
Accruals and deferred income
874,982
634,718
8,357,622
6,929,847
MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 21 -
14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(5,269)
(3,576)
Retirement benefit obligations
109,984
114,417
104,715
110,841
2024
Movements in the year:
£
Asset at 18 July 2023
(110,841)
Charge to profit or loss
6,126
Asset at 17 July 2024
(104,715)

An unknown amount of the deferred tax asset is expected to reverse in the 12 months following the end of the accounting period. This relates to unpaid pension contributions due to delays of pension scheme set up from councils out of the control of Mellors Catering Services Limited.

15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,917,517
1,506,470

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.

 

Contributions totalling £420,815 (2023: £645,212) were payable to the fund at the balance sheet date.

16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
MELLORS CATERING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 17 JULY 2024
- 22 -
17
Financial commitments, guarantees and contingent liabilities

The company has an unlimited guarantee with Double Dutch Hotels Limited, a related party, This guarantee is secured by a fixed and floating charge held by National Westminster Bank over all fixed and current assets of the company. The outstanding borrowings at year end was £3.5m.

 

The company is a member of a VAT group and is jointly and severally liable for any VAT debts of the group. At year end, the VAT liability of other members of the VAT group was £2,359 (2023 - £71,706).

 

18
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
221,406
181,053
Between two and five years
295,890
397,344
517,296
578,397
19
Ultimate controlling party

The company is controlled by its parent company Mellors Consolidated Limited. The smallest and largest group of undertakings for which group accounts are drawn up and of which the company is a member is Mellors Consolidated limited. The financial statements of Mellors Consolidated Limited can be obtained from Companies House.

 

Mellors Consolidated Limited controls 100% of the company's issued share capital and is the direct parent company.

 

The ultimate controlling party of the company is Mr M Timmerman.

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