The directors present the strategic report for the year ended 30 June 2024.
The Directors report that demand in the 2024 fiscal year weakened, along with the wider market. Year on year turnover decreased by 17% (£2.8m), with online sales dipping again this year. The Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) was a profit of £164,726 (2023 profit of £533,343). The actuarial gain totalled £134,000 (gain of £275,000 in 2023) and the Group ended the year with net assets totalling £606,261 (2023: £959,768). The Defined Benefit Pension scheme has seen a small actuarial gain and the Group is pleased to note that the latest triennial review is complete, and the business has visibility until at least 2027.
Whilst trading was challenging in FY24 the business has risen to the challenge and through detailed strategic and financial planning the business took the brave but conscious decision to shift its focus to not only mitigate the trading environment but to enable the revitalisation of the brand’s visibility and appeal. To date, some significant steps forward have been made:
Gross margin has improved by 140bps and with the acceleration of the launch of Arighi Bianchi own-brand furniture it is expected that gross margin will continue to improve
The refreshed approach to communications, social media, and in-store experience is yielding a strong uplift in engagement, footfall, and brand sentiment
A comprehensive operational review has identified opportunities to streamline efficiencies, improve gross margin, and refine our omnichannel retail strategy
Uneconomic assets have been identified and sold
Key stakeholders remained, and continue to remain, supportive of the business and its strategy
Skill gaps were identified and the senior management team bolstered, chiefly in sales and operations
The adherence to the strategy means the business is well placed to further:
Strengthen Market Presence & Consumer Engagement
Expand Strategic Partnerships
Optimise Commercial Performance
Invest in Local Impact & Community Engagement
Reinforce Sustainability Commitment
Focus is firmly fixed on profitable, sustainable growth, ensuring proactive adaptions to market conditions while maintaining the highest standards of customer service.
The Group has considered the principal risks and uncertainties to which it is exposed, and risk management remains a high priority for the Group. Day-to-day involvement of the Directors and a bolstered senior management team ensures that business risks are quickly identified and mitigated by action of effective policies and procedures.
Economic and market conditions have been challenging and are expected to remain so. There continues to be uncertainty surrounding the global economy; consumer confidence and discretionary spending continued to be impacted due to increases in the cost of living. Stickier than expected levels of inflation combined with significant changes to the political landscape continue to maintain higher cost of living levels. As such, the Group retains a keen focus on further improving gross margin and appropriately adjusting variable costs.
Reduced inflationary pressure has resulted in a small actuarial gain. Further reduction in inflation may result in a higher net defined benefit pension scheme liability being reported in future years, however the Group has been working proactively with its Pension Trustee and changed its investment strategy. This has made positive steps towards self-sufficiency sooner than previously expected.
Environmental Matters
At Arighi Bianchi, sustainability is at the heart of everything. The Group believes in crafting beautiful, lasting furniture that not only transforms your home but also contributes to a more Sustainable future. Focus is retained on three key areas—our environment, community, and brands—to ensure that sustainability is ingrained in operations, products, and culture.
Minimising Footprint
The Group is dedicated to minimising its environmental impact at every stage, from sourcing raw materials to product delivery. Our partners use energy-efficient systems, sustainable resources, and recycling solutions to reduce CO₂ emissions and waste. Many of the Group’s brands and manufacturers are carbon-neutral, using locally sourced, sustainable materials to reduce transportation emissions. The Group is committed to providing you with eco-friendly choices that contribute to a greener planet.
Ethical Practices for a Sustainable Future
The Group collaborates with brands and manufacturers that share the vision for a more sustainable world. From sourcing timber responsibly and sustainably to producing furniture that lasts a lifetime, the Group’s supply partners are leading the charge in sustainable practices such as recycled materials , FSC-certified wood, and CO2-neutral production methods. Through these long-lasting relationships, the Group ensures that product offering aligns with your values of sustainability.
Staff education
Ongoing education of all members of staff ensures that environmental policies are implemented at every level of our organisation. All employees are well aware of the role they can play in helping us achieve our environmental goals and are encouraged to find new ways of making the Group more sustainable.
Customer satisfaction
Delivering excellent Customer Service is the Group DNA. All staff take great pride in building real relationships with customers and take the necessary time to provide an excellent service. The Group regularly monitors customer satisfaction in terms of sales using customer feedback forms.
Non-financial key performance indicators
The key non financial indicators monitored by the business include those which measure customer satisfaction, supplier performance, sales performance, staff matters and environmental matters across the business. The directors review these KPIs on a regular basis with the objective of improving overall customer service and financial performance.
Financial key performance indicators
The Directors consider the key financial performance indictors to be as follows:
| 2024 | 2023 |
| £ | £ |
Turnover | 13,729,879 | 16,504,845 |
Gross Profit | 5,587,285 | 6,482,298 |
Operating profit/(loss) | (79,310) | 174,272 |
Profit/(loss) before tax | (205,724) | 57,044 |
EBITDA | 164,726 | 533,343 |
Gross margins are 40.7% (2023: 39.3%).
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £170,564. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Sage & Company Business Advisors Limited were appointed as auditor to the group 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.
Future developments
The Group will continue to develop its strategy as explained in the Strategic Report.
Looking ahead, we continue to drive strategic priorities and expect to see further progress in gross margin and improvements in the working capital cycle through targeted operational efficiency programmes. We will make further progress in engagement, footfall and brand sentiment through market leading campaigns, strategic alliances, refreshed communications, social media, and in-store experience.
This progress is possible due to the commitment of the Board, the continued investment in bolstering our senior management team and the continuing support of our key stakeholders such as NatWest Bank, our Pension Trustee and our Directors SiPP.
Financial Instruments
The Group’s operations expose it to a variety of financial risks that include the effects of changes to credit risk, liquidity risk and foreign exchange risk. The Group has a risk management programme that seeks to limit the adverse effectives on the financial performance of the Group by actively monitoring cash and related finance costs. The Group has implemented policies that require appropriate credit checks and full payment before goods are delivered to customers. Further, the Group undertakes financial due diligence of its supply partners and the Group continues to offer high quality to term payment records.
Engagement with employees
Employees are encouraged to discuss with management any matters of concern and factors affecting the Group. Employees are kept informed of Group progress and developments through team briefings and emails.
Disabled employees
The Group gives full consideration to applications for employment from disabled persons where the candidate's skills are consistent with the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion.
Where existing employees become disabled, it is the Group's policy to provide continuing employment wherever practical in the same, or an alternative, position.
Post balance sheet events
There have been no significant events affecting the Group since the year end.
Going Concern
The financial statements have been prepared on a going concern basis. The following paragraphs set out the basis of which the directors have reached their conclusion.
The Group has net assets of £606,261 (2023: £959,768).
The Defined Benefit Pension scheme liability is £1,463,000 (2023: £1,998,000) and whilst the liability remains material it has reduced significantly in the last twelve months.
The quality of strategic and financial planning noted in the business review, proven through FY24 and into FY25, has resulted a strengthening balance sheet due to improved gross margin, improved efficiency of the estate through the sale of uneconomic assets and the consolidation of operational activities, removal of unnecessary overhead costs and continued support from key stakeholders.
Directors have prepared detailed, conservative, forecasts which cover the period through to June 2026 and which indicate that the Group will be able to meet its liabilities as they fall due assuming that current facilities remain in place. The current facilities are available for the foreseeable future, subject to regular reviews.
The Directors therefore believe it is appropriate to prepare the accounts as at 30 June 2024 on a going concern basis.
We have audited the financial statements of Arighi Bianchi Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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 group's and 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.
Other information
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows;
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the group and the company through discussions with directors and other management;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group and the company, including the Companies Act 2006, taxation legislation and employment legislation;
we assessed the extent of compliance with the laws and regulations identified above through enquires of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance through the audit.
We assessed the susceptibility of the group's and the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquires of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the group and company's remuneration policies.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation; and
enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that rise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2023 - £25 loss).
Arighi Bianchi Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Silk Road, Macclesfield, Cheshire, SK10 1LH
The group consists of Arighi Bianchi Holdings Limited and all of its subsidiaries.
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 and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Arighi Bianchi Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The financial statements have been prepared on a going concern basis. This policy is based upon the continued support of the Group’s Bank, it’s Defined Benefit Pension Trustee and the Directors’ SIPP. The assumptions relating to going concern are set out in the strategic report and directors' report.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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 unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
Pensions
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
Defined benefit pension plan
The Group operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age. length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The liability recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments (discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Group's policy tar similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets. less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.
The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset. comprises:
the increase in net pension benefit liability arising from employee service during the period: and
the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a ‘finance expense’
In the application of the group’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.
The present value of the defined benefit liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions, which are disclosed in pension note, will impact the carrying amount of the pension liability. Furthermore a roll forward approach which projects results from the latest full actuarial valuation performed at 6 April 2021 has been used by the actuary in valuing the pension liability at 30 June 2024. Any differences between the figures derived from the roll forward approach and a full actuarial valuation would impact on the carrying amount of the pension liability.
The directors have chosen to apply a discount rate of 5.3% (2023: 5.4%) when valuing the pension scheme liability.
The whole of the turnover is attributable to the Group's principal activity.
All turnover arose within the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year retirement benefits were accruing to 3 directors (2022 - 3) in respect of defined contribution pension schemes.
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
A legal charge was registered in December 2013 in favour of National Westminster Bank PLC containing fixed and floating charge. Floating charge covers all the property or undertaking of the company.
A legal charge was registered in April 2019 in favour of National Westminster Bank PLC by way of legal mortgage all legal interest in Unit 1 Thorp House, Thorp Street, Macclesfield. Containing fixed charge and negative pledge.
A legal charge was registered in October 2021 in relation to certain land and buildings owned by the Company. The Company, with full title guarantee, charged the property by way of legal mortgage as security for the payment of all sums due and owing to the third party, Cenpac (A.I.S) Limited, from the Company, from time to time.
A legal charge was registered in October 2024 in favour of National Westminster Bank PLC containing fixed negative pledge.
A charge exists, by way of first legal mortgage and fixed charge, on the freehold property held within a subsidiary in favour of Arighi Bianchi Pension Trustees Limited as security trustee.
Details of the company's subsidiaries at 30 June 2024 are as follows:
The bank overdraft is secured by a fixed and floating charge over the Group’s assets.
Obligations under finance leases and hire purchase contracts are secured over the assets to which they relate.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred taxation asset at the beginning of the year comprises £170,196 (liability) re accelerated capital allowances and £497,000 (asset) re retired benefit obligations. The profit or loss adjustment to deferred tax are set out above. The closing balance is a deferred tax asset of £215,585 comprises £150,165 (liability) re accelerated capital allowances and £365,750 (asset) re retired benefit obligations.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The company operates a defined benefit scheme.
Arighi Bianchi & Co Limited operates a final salary pension plan in the UK, the Arighi Bianchi & Co Limited Pension Scheme. A full actuarial valuation was carried out as at 6 April 2021, which has been updated to 30 June 2024 by a qualified independent actuary.
Assumed life expectations on retirement at age 65:
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
Amounts recognised in the profit and loss account
Amounts taken to other comprehensive income
Movements in the present value of defined benefit obligations
Movements in the fair value of plan assets
Each class of share has attached to them full voting rights and a right to dividends should the Directors decide to declare dividends. The shares do not confer any rights of redemption and ordinary shares rank equally on a return of capital i.e. a winding up.
Profit and Loss Reserves includes all current and prior period profit and losses and relate to distributable reserves. Other Reserves include the revaluation reserve.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
The Company has taken advantage of the exemption available under FRS 102 not to disclose details of any transactions between itself and its fellow group undertakings on the basis that it is a subsidiary undertaking where 100% of the voting rights are controlled within the Group whose consolidated financial statements are publicly available.
Rent totaling £200,000 was charged by Arighi Bianchi Group SIPP during the year (2023: £200,000). Amounts totaling £Nil were payable to Arighi Bianchi Group SIPP at 30 June 2024 (2023: £nil).
Dividends totalling £170,564 (2023 - £264,168) were paid in the year in respect of shares held by the company's directors.
All of the above balances are included within Other debtors and are interest free, with no set repayment terms.