Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
Page Kirk LLP
Chartered Accountants and Statutory Auditors
Sherwood House
7 Gregory Boulevard
Nottingham
NG7 6LB
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CONTENTS
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COMPANY INFORMATION
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report for the year ended 31 December 2023.
The group is the worlds leading manufacturer of independently market certified hair containment solutions for critical industries, focussed on food processing and foodservice sectors, marketed to countries in most continents around the globe. Many of the group’s products and free service solutions are covered by international patents, both granted and pending and are branded. The company is uniquely positioned and market recognised as an authority in this chosen specialism which affords market strength. The group designs its products around the principle of best cost – all costs have to add value in the target end customers eyes and these costs are optimised for the market volume with global sales network offering economies of scale where possible.
As an integrated manufacturer from yarn through to finished, branded, packed product with manufacturing in both England and Sri Lanka the group has control over the majority of its supply chain and cost structure. Yarn is our main input cost which is an international commodity with little supply cost impact on the processing location whilst our fabric machines are running at above industry standard speeds for above average productivity further protecting business resilience. The group employs people that have in depth knowledge in fabric production, finishing and automated conversion techniques which enables our chosen specialism to continue to strive. During the year sales increased 20% across a variety of geographical markets demonstrating the strength of the company’s market offering. The company invested in refurbishing part of the freehold Long Eaton site ready to receive new yarn processing equipment – some of which is the first of its type in the UK. This investment will help ensure we retain a market leading cost structure for our chosen areas of expertise and afford us additional capacities for both hair containment and other new product areas. The group continues to develop residential housing for letting as a long term investment.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The principal risks to the business are considered to be:
Price risk - The group has an optimised cost base. The main item outside our direct control is yarn which is an international commodity price. Yarn sourcing is reviewed and trialled on a regular basis with consistency of supply a key priority for sequential manufacturing operations to control quality. Energy costs are controlled by review which again are industry wide. Credit risk - The group has debtor insurance and as a regular supplier to repeat customers can manage debtor risk effectively. As the group operates using its own cash reserves this risk to the business is well controlled. Liquidity risk - The group has a low risk acid test ratio of 1.6, controlled as detailed above. Cash flow risk - See above re credit insurance, repeat supply and self financing. Financial risk - The group is naturally hedged from currency fluctuations due to a balance of costs and sales revenue in foreign currencies. Employment risk - The group recognises the relative low level of skilled labour in the fabric manufacturing aspect of the business - made worse from the impact of Brexit and has invested in developing its own in house detailed skills competency matrix with published grades for its main activities of warping, knitting and textile specialisms.
The directors considering the following to be the financial key performance indicators:
Gross margin - The group aims to keep this above 45%. The group's gross margin this year was 56.86%. Net margin - The group aims to keep this above 15%. The group's net margin this year was 4.09%. Aged debtors days - The group aims to keep this at around 60 to 90 days. The group's debtors days this year was 76 days. Aged creditors days - The group aims to keep this between 40 - 60 days. The group's creditors days this year was 45 days. Stock turnover - The group aims to keep stock turnover around 4 - 5 times. The group's stock turnover this year was 4.00.
The directors considering the following to be the other key performance indicators:
Fabric machine percentage running times - This is monitored to ensure the group can continue to optimise it's production time and spot any potential downtime unaccounted for. Operator quality and efficiency levels daily - This is monitored to ensure that operators are producing quality products and fast rate, while also understanding any deficiencies in training of operators. % Orders Dispatched Complete and On Time - This is monitored to report on customer satisfaction. Quantity Days to Replenish WIP stocks - This is used to measure and set internal stock holding to meet demand.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board on 14 March 2025 and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The profit for the year, after taxation, amounted to £219,393 (2022 - £634,007).
The directors who served during the year were:
The company has made significant investment in new yarn winding machinery after the accounting period date. With this the company expects it will retain its market leading position in the hair containment market.
The Group recognises the benefit of keeping employees informed of the progress of the business and does so through informal meetings.
There have been no significant events affecting the Group since the year end.
The auditors, Page Kirk LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABURNET LIMITED
We have audited the financial statements of Aburnet Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABURNET LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABURNET LIMITED (CONTINUED)
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 Auditors' 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 Group 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 within which the group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, taxation legislation and money laundering regulations.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management and the understatement of revenue. Our audit procedures to respond to these risks included: • Enquiries of management about their own identification and assessment of the risks of irregularities. • Sample testing on the posting of journals. • Reviewing regulatory correspondence and professional fees. • Detailed substantive testing on the completeness of income. • Reviewing budgets and post year end management accounts.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABURNET LIMITED (CONTINUED)
for and on behalf of
Sherwood House
7 Gregory Boulevard
NG7 6LB
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CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 23 to 43 form part of these financial statements.
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COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
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COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 23 to 43 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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