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Registered number: 12976929









M. R. GORTON LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2024

 
M. R. GORTON LIMITED
 

COMPANY INFORMATION


Director
Mr M R Gorton 




Registered number
12976929



Registered office
Oak Tree Business Park
Hargham Road

Shropham

Norfolk

NR17 1DS




Independent auditors
Price Bailey LLP
Chartered Accountants & Statutory Auditors

Anglia House, 6 Central Avenue

St Andrews Business Park

Thorpe St Andrew

Norwich

Norfolk

NR7 0HR





 
M. R. GORTON LIMITED
 

CONTENTS



Page
Group Strategic Report
 
 
1 - 3
Director's Report
 
 
4 - 7
Independent Auditors' Report
 
 
8 - 11
Consolidated Statement of Comprehensive Income
 
 
12
Consolidated Balance Sheet
 
 
13
Company Balance Sheet
 
 
14
Consolidated Statement of Changes in Equity
 
 
15
Company Statement of Changes in Equity
 
 
16
Consolidated Statement of Cash Flows
 
 
17
Consolidated Analysis of Net Debt
 
 
18
Notes to the Financial Statements
 
 
19 - 40


 
M. R. GORTON LIMITED
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024

Introduction
 
The director presents the Group Strategic Report for the year ended 30 June 2024.
Principal Activities
The principal activity of the Group in the year under review was that of production and processing of free range and organic chickens and turkeys.

Business review
 
A challenging marketplace continued however cost pressures have stabilised which have seen a large improvement in the overall gross margin of the business.
 
Previous years have been adversely affected by Avian Influenza. In 2023/24 the Group was free from any Avian Influenza outbreaks, and this was also reflective in the improved margins.
Despite the continued challenging trading environment, the Company has continued to grow with the demand from its customers.   
Principal risks and uncertainties
The principal risks facing the Group are:
Competitive risk
There is competition within the poultry production sector and the markets in which the Group operates, which can result in pressure on margins. The Group maintains relationships with customers to ensure it minimises the risk of losing business to competitors.
Client dependency
Over reliance on large customers not under long term contracts may expose the Group to a significant reduction of turnover and profits if the contract is terminated, or if such a customer does not pay for products in a timely manner, which may have an adverse effect on cash flow.
  
Human resource risk
Failure to retain key staff can adversely affect any business. Short lines of communication are maintained between the director and key staff to mitigate the risk.
Commodity prices 
A significant proportion of the Group’s cost is attributable to the ingredients used in feed grain which can be affected by unsettled economic conditions, global supply and demand, weather patterns and government policies. The availability of the feed grain continues to be adversely affected by the war in Ukraine. The Group monitors feed prices carefully working closely with customers to reduce the impact of volatile market movements and agrees feed prices in advance with suppliers to manage the impact of adverse price movements when appropriate.
   
Disease 
As a responsible agri-business, the health and welfare of our livestock is a high priority.  Experienced, trained management are always on hand to monitor bird health with the support of a qualified veterinary advisor. Notifiable diseases such as avian influenza are a risk to the Group as an outbreak may result in some destruction of our livestock and products not infected or contaminated. The Group mitigates against such risk by maintaining robust bio-security measures. The Group has developed contingency plans should an outbreak of avian influenza occur in close proximity to any of its operating facilities.  
Page 1

 
M. R. GORTON LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024


 
Food safety 
Food safety is a high priority. The risk of food scares is mitigated by ensuring raw materials are traceable to source and manufacturing, storage and distribution systems are continually monitored by experienced and qualified technical staff. These systems will ensure our continued reputation for producing poultry to the highest standards.
Operational health and safety 
Failure to maintain a sufficiently skilled workforce and retain key skills can adversely affect any business. Health and safety issues are reviewed and monitored on a regular basis. 
Interest risk
The Group has structured debt and as such the director feels that interest rate risk is minimal. The director has taken steps to ensure the day to day commercial risks are managed comprehensively by the Group. To do this the management review financial performance which will alert them to adverse developments in trading performance and cash management. 

Financial key performance indicators
 
The Group uses a range of Key Performance Indicators (KPI’s) to monitor the performance of the business on an ongoing basis.  The financial measures include Revenue, Revenue Growth, Gross Profit Margin and Profit before Tax.
                                             
      2024                              2023 
Revenue                     £49,082,671                 £45,319,331                     
Revenue Growth %                  8%                                 -4%
Gross Profit Margin                 23%                               12%
Profit/(Loss) before Tax           £3,193,750                      (£146,347)
Revenue growth in the year was a largely due to increased sales volume across our customer base. The input costs have stabilised with feed, the largest single input being less volatile which has helped improve the overall margin.
Administration expenses increased throughout the year compared against 2023 largely due to increased farming rental space to cater for the additional volume.   
The Group also has non-financial KPI measurements in place such as staff retention % and accidents and incidents which are key metrics for the Group. Staff retention % shows how successful the Group is in retaining its workforce. Health & Safety is a vitally important area within the business and daily and weekly KPI’s are reported on any accidents or incidents that have occurred.   

Future developments
 
The Group has a continued strategy to grow the farming base and continue to invest in the facilities at Shropham.

Page 2

 
M. R. GORTON LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024

Director's statement of compliance with duty to promote the success of the Group
 
Section 172(1) of the Companies Act 2006 requires the director to take into consideration the interests of the stakeholders in his decision making. The director continues to have regard to the interests of the Group’s employees and other stakeholders, including the impact of its activities on the community, the environment and the Group’s reputation, when making decisions. By acting in good faith and fairly, the director considers what is most likely to promote the success of the Group in the long term. 
The director is fully aware of his responsibilities to promote the success of the Group in accordance with Section 172 of the Companies Act 2006. To ensure the Group meets this, the director regularly reflects on how the Group engages with its stakeholders and considers opportunities for enhancements to stakeholder engagement. Such stakeholders include employees, customers, suppliers and the local community. 
When making decisions, the director has regard, amongst other matters, to:
- The likely consequences of any decision in the long term;
- The interests of the Group’s employees;
- The need to foster the Group’s business relationships with suppliers, customers and others;
- The impact of the Group’s operations on the community and the environment;
- The desirability of the Group maintaining a reputation for high standards of business conduct, and;
- The need to act fairly between stakeholders of the Group.
Stakeholders
Employees:
The director recognises that the Group’s employees are vitally important to the continued success of the business.  The Group has continued its policy of informing employees of the matters of concern to them through formal and informal meetings and information notices.
The Company ensures the employees are aligned to the business objectives and core values through employee forums, site briefings and award schemes.
Customers:
Engagement with the Group's customers ensures that the Group is aligned with their values, strategies and priorities, ensuring the Group works as strategic partners alongside them in order to ensure business sustainability and growth. 
Suppliers:
Suppliers are a critical link to the overall Group supply chain, providing a source of value which meets the overall Group needs. The Group undertakes regular reviews in a two-way engagement to improve performance. 
Local community:
The Group engages within the local community by supporting local events and charities throughout the year.


This report was approved by the board on 16 October 2024 and signed on its behalf.



Mr M R Gorton
Director

Page 3

 
M. R. GORTON LIMITED
 

 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2024

The director presents his report and the financial statements for the year ended 30 June 2024.

Director's responsibilities statement

The director is responsible for preparing the Group Strategic Report, the Director's Report and the consolidated 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 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 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the director is required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006He is 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.

Principal activity

The Company's principal activity is that of a holding company. The principal activity of the Group is the production and processing of free range chickens and turkeys.

Results and dividends

The profit for the year, after taxation, amounted to £2,032,610 (2023 - loss £55,584).

Dividends of £303,500 were declared during the year (2023 - £226,557).

Director

The director who served during the year was:

Mr M R Gorton 

Page 4

 
M. R. GORTON LIMITED
 

 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024

Engagement with employees

The directors recognise that the Group's employees are vitally important to the continued success of the  business. The Group has continued its policy of informing employees of matters of concern to them through formal and informal meetings and information notices.

Impact of operations on the environment
The Group is committed to minimising it's environmental impact and promoting sustainability in it's operations. The Group recognises the importance of addressing emissions associated with it's activities and strives to continually improve it's environmental performance.
 
Scope of emissions
The Group’s emissions statement encompasses the direct and indirect greenhouse gas (GHG) emissions resulting from its poultry business operations in the United Kingdom. This includes emissions from it's facilities, transportation, and supply chain activities.
Greenhouse gas inventory 
The Group has conducted a comprehensive inventory of it's greenhouse gas emissions based on reliable and validated methodologies. Scope 1&2 energy supplier invoices, sales tonnes, government greenhouse gas conversion factors.  The inventory covers the following emission sources: 
a) Scope 1 Emissions: The Group accounts for direct emissions from sources it controls, such as emissions from on-site energy consumption, fuel combustion, and any refrigerants or chemicals used in it's operations. 
b) Scope 2 Emissions: The Group quantifies indirect emissions resulting from purchased electricity and heat consumed in it's facilities. 
c) Scope 3 Emissions: The Group considers relevant indirect emissions from it's value chain, including emissions from purchased goods and services, transportation, and waste disposal.
Reduction Targets and Initiatives
The Group is committed to reducing it's greenhouse gas emissions in line with national and international climate goals. To achieve this, the Group has established reduction targets and implemented initiatives such as:
 
a) Energy Efficiency: The Group continuously evaluates and invests in energy-efficient technologies and equipment to minimize it's energy consumption and associated emissions. This is illustrated with the continued use of a New Alma Whole bird line which runs using less plastic and more efficiently than the pre-existing model.
b) Renewable Energy: The Group actively explores opportunities to transition to renewable energy sources, such as solar or wind power, to reduce it's reliance on fossil fuels. The Group has 11 bio-mass boilers across various sites in use generating renewable energy.
  
c) Waste Management: The Group implements waste management practices to minimise waste generation and promotes recycling and composting to reduce emissions from landfill. The reduction of plastic waste due to the new Alma whole bird line and an increased focus on water reduction has been continued during the year. 
d) Transport Optimisation: The Group optimizes it's transportation routes and explores sustainable transportation options to minimize emissions associated with it's supply chain. The Group engages with logistic companies to maximise pallet efficiency on all outloads.



 
Page 5

 
M. R. GORTON LIMITED
 

 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024

Monitoring and Reporting
The Group regularly monitors and assesses its emissions performance using reliable data collection methods. It maintains accurate records of emissions, reviews its progress against reduction targets, and reports its findings transparently.
- The period covered Financial year  01/07/23-30/06/24 (Base year).
- Methodology:  Scope 1&2 energy supplier invoices, sales tonnes, government greenhouse gas
          conversion factors.
- Measurement: Scope 1&2 tonnes CO2 equivalent per sales tonne.
- Monthly breakdown of sales tonnes and energy inputs, electricity, biomass wood pellets, and LPG all
          reported on the Manufacture2030 TNP worksheet. Submitted base year data for YE 30/06/24.

ActivityScope  Type                 Amount     Units       Total kg          Total kg         Total tonne
                                                                                                               Carbon             Carbon              Carbon
                                                                                                               dioxide             dioxide              dioxide
                                                                                                           equivalent       equivalent         equivalent
                                                                                                               per unit                                          
Energy  Scope1 Biomass wood pellets   65 tonnes       19.804             3,276                      3
                       Liquified petroleum      12.533    tonnes        3,461            37,584                     38
                                         gas cylinders
                       Liquified petroleum       47,986     litres          0.578           73,727           13
                                         gas bulk
Refrigerant 
release to air  Scope1     HFC-R404A                     -              kg          3,421       -                         -
                     HFC-R449A                     -              kg         1,267                -                         - 
                              HFC- R452A                     -              kg           2,005                -                     -
Energy    Scope2    Grid electricity           2,383,082   kWh           0.422          506,054          506
                                        includes 
                                        transmission
Material use   Scope3    Chicken & Turkey             8,960 tonnes      3,213.79      32,139,250       32,139
                                       sales
                    Category3 material           4,899 tonnes      3,213.79      15,540,790              15,541
                                       for rendering
Water supply  Scope3    Water supply                 34,693     m3          0.1315              5,425               5
                                       mains and borehole
Waste            Scope3     Cardboard recycling         26.25 tonnes 26.310      544                  1
disposal          Other recycling                   8.12 tonnes 26,310               198               -
                             Trade effluent for             24,009 tonnes 0.1952          6,511                       6
                                       landspreading
                    Category2 material                144 tonnes 21.280              3,265               3
                                       for combustion
                             Residual waste             114 tonnes 21.280     2,642               2
                                       for combustion
Grand total                                                                     48,318,093        48,319
In the prior year, the Group had energy consumption and related carbon dioxide emissions as follows:
- Scope 1 and 2 energy usage - 16,978 tonnes
- Total carbon dioxide equivalent - 47,160 tonnes


 

Page 6

 
M. R. GORTON LIMITED
 

 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024

Stakeholder Engagement
The Group engages with it's employees, suppliers, customers, and other relevant stakeholders to raise awareness about our emissions reduction efforts and encourage their involvement in sustainable practices.  The Group has signed up to the Manufacture 2030 programme with its customers in an attempt to collaboratively reduce it's carbon emissions.
Continuous Improvement
The Group is committed to continuously improving it's emissions management practices. It actively seeks innovative solutions and collaborates with industry partners, researchers, and experts to identify and implement best practices in emissions reduction and environmental sustainability.
At M. R. Gorton Limited, we recognise that our environmental responsibility goes hand in hand with our commitment to delivering high-quality poultry products. Through effective emissions management and sustainable practices, we strive to contribute to a greener and more sustainable future for our business, our stakeholders, and the environment.

Disclosure of information to auditors

The director at the time when this Director's Report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

Since the year-end dividends totalling £30,000 have been paid.
The Group has made several capital purchases totalling £537,351 of which £249,446 was financed via new Hire Purchase agreements.

Auditors

The auditorsPrice Bailey LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 16 October 2024 and signed on its behalf.
 





Mr M R Gorton
Director

Page 7

 
M. R. GORTON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED
 

Opinion


We have audited the financial statements of M. R. Gorton Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 30 June 2024 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 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.


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


Page 8

 
M. R. GORTON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The director is responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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 Director's Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Director's Responsibilities Statement set out on page 4, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 9

 
M. R. GORTON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED (CONTINUED)


Auditors' 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 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 reviewed systems and procedures to identify potential areas of management override risk. In  particular, we carried out testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions to identify large or unusual transactions;
- We critically assessed significant estimates inherent in the financial statements. This involved assessing estimates against post year end actual performance and considering estimates in light of our expectations which are formed on the basis of past experience and our knowledge of the entity and the industry;
- We held discussions with those charged with governance, to enquire whether they were aware of any instances of non-compliance with laws & regulations;
- We reviewed legal expenses to indentify any instances of non-compliance with laws and regulations;
- We obtained inspection reports from key regulatory visits in the year, to identify any instances of non-compliance;
- We confirmed the bank balance as at the balance sheet date with the Group's bankers; 
- We confirmed the existence of a sample of employees to ensure there are no ficticious employees;
- We reviewed a sample of pay rates to ensure minimum wage requirements are being met. We also reviewed a pay run to ensure there were no duplicate bank accounts being paid; and
- We reviewed the accident log and gained an understanding of the Health & Safety procedures from discussion with the Group’s Health & Safety Champion;
We performed the procedures set out above after gaining an understanding of the legal and regulatory framework applicable to the Group and the industry in which it operates, and after considering the risk of acts by the Group contrary to applicable laws and regulations including fraud.  We obtained this understanding from discussions with those charged with governance, who did not make the engagement team aware of any non-compliance with laws and regulations or instances of fraud throughout the year or since the year end. 
In performing the above procedures we focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the Red Tractor Farm Assurance Poultry Scheme, the RSPCA Farm Assurance Scheme, the Organic Farms & Growers Association accreditation, the BRC accreditation, the Animal Welfare Act 2006, the Welfare of Farmed Animals Regulations 2007, the Companies Act 2006, UK Health & Safety law including RIDDOR (HSE 2013), Employment law and tax legislation.



 
Page 10

 
M. R. GORTON LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF M. R. GORTON LIMITED (CONTINUED)



We enquired with those charged with governance as to how they ensure the Group complies with the applicable legal & regulatory framework. 
- The Group is subject to frequent regulatory audits & inspections, from both key customers and regulatory bodies such as SEDEX and the APHA;
- DEFRA keeps a poultry register for any premises on which more than 50 birds are kept. The Group have a specific DEFRA license number, and are in regular communication with DEFRA, passing over key information in order to maintain the license;
- The Group also has a health and safety committee which is comprised of several members of the companies management personel who meet monthly to discuss key risks and any issues surrounding health and safety.
Following detailed team briefings, the Responsible Individual has assessed that the audit engagement team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with applicable laws and regulation. Nonetheless, 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.


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 2006Our 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.





Aaron Widdows ACA FCCA (Senior Statutory Auditor)
  
for and on behalf of
Price Bailey LLP
 
Chartered Accountants
Statutory Auditors
  
Anglia House, 6 Central Avenue
St Andrews Business Park
Thorpe St Andrew
Norwich
Norfolk
NR7 0HR

16 October 2024
Page 11

 
M. R. GORTON LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024

2024
2023
Note
£
£

  

Turnover
 4 
49,082,671
45,319,331

Cost of sales
  
(37,582,287)
(40,104,324)

Gross profit
  
11,500,384
5,215,007

Administrative expenses
  
(8,230,198)
(7,801,485)

Other operating income
 5 
565,503
3,015,919

Operating profit
 8 
3,835,689
429,441

Interest payable and similar expenses
 10 
(641,939)
(575,788)

Profit/(loss) before taxation
  
3,193,750
(146,347)

Tax on profit/(loss)
 11 
(1,161,140)
90,763

Profit/(loss) for the financial year
  
2,032,610
(55,584)

Profit/(loss) for the year attributable to:
  

Owners of the parent Company
  
2,032,610
(55,584)

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 19 to 40 form part of these financial statements.

Page 12

 
M. R. GORTON LIMITED
REGISTERED NUMBER: 12976929

CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2024

As restated
2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 13 
1,182,940
1,361,703

Tangible assets
 14 
12,075,965
12,428,788

  
13,258,905
13,790,491

Current assets
  

Stocks
 16 
2,300,497
2,001,426

Debtors: amounts falling due within one year
 17 
7,130,701
6,272,875

Bank and cash balances
  
380,713
310,674

  
9,811,911
8,584,975

Creditors: amounts falling due within one year
 18 
(11,845,427)
(11,765,843)

Net current liabilities
  
 
 
(2,033,516)
 
 
(3,180,868)

Total assets less current liabilities
  
11,225,389
10,609,623

Creditors: amounts falling due after more than one year
 19 
(4,259,955)
(5,793,782)

Provisions for liabilities
  

Deferred taxation
 12 
(1,336,846)
(916,363)

  
 
 
(1,336,846)
 
 
(916,363)

Net assets
  
5,628,588
3,899,478


Capital and reserves
  

Called up share capital 
 22 
100
100

Merger reserve
 23 
4,099,901
4,099,901

Profit and loss account
 23 
1,528,587
(200,523)

Equity attributable to owners of the parent Company
  
5,628,588
3,899,478


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 October 2024.


Mr M R Gorton
Director

The notes on pages 19 to 40 form part of these financial statements.

Page 13

 
M. R. GORTON LIMITED
REGISTERED NUMBER: 12976929

COMPANY BALANCE SHEET
AS AT 30 JUNE 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 14 
666,936
-

Investments
 15 
7,687,078
8,354,014

  
8,354,014
8,354,014

Current assets
  

Debtors: amounts falling due within one year
 17 
-
917,072

Bank and cash balances
  
6,123
523

  
6,123
917,595

Creditors: amounts falling due within one year
 18 
(671,300)
(1,349,998)

Net current liabilities
  
 
 
(665,177)
 
 
(432,403)

Total assets less current liabilities
  
7,688,837
7,921,611

  

Creditors: amounts falling due after more than one year
 19 
(2,823,935)
(3,851,609)

  

Net assets
  
4,864,902
4,070,002


Capital and reserves
  

Called up share capital 
 22 
100
100

Merger reserve
 23 
4,099,901
4,099,901

Profit and loss account brought forward
  
(29,999)
(143,803)

Profit for the year
  
1,098,400
340,361

Dividends paid

  

(303,500)
(226,557)

Profit and loss account carried forward
  
764,901
(29,999)

  
4,864,902
4,070,002


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 October 2024.


Mr M R Gorton
Director

The notes on pages 19 to 40 form part of these financial statements.

Page 14

 
M. R. GORTON LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024


Called up share capital
Merger reserve
Profit and loss account
Total equity

£
£
£
£


At 1 July 2022
100
4,099,901
81,618
4,181,619


Comprehensive income for the year

Loss for the year
-
-
(55,584)
(55,584)

Dividends: Equity capital
-
-
(226,557)
(226,557)



At 1 July 2023
100
4,099,901
(200,523)
3,899,478


Comprehensive income for the year

Profit for the year
-
-
2,032,610
2,032,610

Dividends: Equity capital
-
-
(303,500)
(303,500)


At 30 June 2024
100
4,099,901
1,528,587
5,628,588


The notes on pages 19 to 40 form part of these financial statements.

Page 15

 
M. R. GORTON LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024


Called up share capital
Merger reserve
Profit and loss account
Total equity

£
£
£
£


At 1 July 2022
100
4,099,901
(143,803)
3,956,198


Comprehensive income for the year

Profit for the year
-
-
340,361
340,361

Dividends: Equity capital
-
-
(226,557)
(226,557)



At 1 July 2023
100
4,099,901
(29,999)
4,070,002


Comprehensive income for the year

Profit for the year
-
-
1,098,400
1,098,400

Dividends: Equity capital
-
-
(303,500)
(303,500)


At 30 June 2024
100
4,099,901
764,901
4,864,902


The notes on pages 19 to 40 form part of these financial statements.

Page 16

 
M. R. GORTON LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024

2024
2023
£
£

Cash flows from operating activities

Profit/(loss) for the financial year
2,032,610
(55,584)

Adjustments for:

Amortisation of intangible assets
161,134
162,061

Depreciation of tangible assets
1,094,437
1,180,321

Loss on disposal of tangible assets
-
241,133

Loss on disposal of intangible assets
17,629
-

Taxation charge
1,161,140
(90,763)

(Increase)/decrease in stocks
(299,071)
427,830

(Increase)/decrease in debtors
(857,826)
509,069

(Decrease) in creditors
(1,282,358)
(142,935)

Corporation tax (paid)/received
(6,221)
97,318

Net cash generated from operating activities

2,021,474
2,328,450


Cash flows from investing activities

Purchase of intangible fixed assets
-
(3,277)

Purchase of tangible fixed assets
(741,614)
(672,227)

Net cash from investing activities

(741,614)
(675,504)

Cash flows from financing activities

Repayment of loans
(628,515)
(618,441)

Other new loans
-
191,526

Repayment of/new finance leases
(447,119)
(580,038)

Movements on invoice discounting
(472,626)
(724,448)

Dividends paid
(303,500)
(226,557)

Interest paid
641,939
575,788

Net cash used in financing activities
(1,209,821)
(1,382,170)

Net increase in cash and cash equivalents
70,039
270,776

Cash and cash equivalents at beginning of year
310,674
39,898

Cash and cash equivalents at the end of year
380,713
310,674


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
380,713
310,674

380,713
310,674


Page 17

 
M. R. GORTON LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2024




At 1 July 2023
Cash flows
At 30 June 2024
£

£

£

Cash at bank and in hand

310,674

70,039

380,713

Debt due after 1 year

(3,772,302)

433,837

(3,338,465)

Debt due within 1 year

(529,261)

58,455

(470,806)

Finance leases

(789,582)

398,558

(391,024)


(4,780,471)
960,889
(3,819,582)

The notes on pages 19 to 40 form part of these financial statements.

Page 18

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

1.


General information

M. R. Gorton Limited is a private company, limited by shares, registered in England and Wales. The registered number is 12976929. The Company's registered office is Oak Tree Business Park, Hargham Road, Attleborough, Norfolk, NR17 1DS, which is the same address as its place of business.
The Company's principal activity is that of a holding company. The activity of the Group is the production and processing of free range chickens and turkeys.
These financial statements are presented in Sterling, which is the Group's functional currency. Monetary amounts are rounded to the nearest £1.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 19

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.3

Going concern

As at 30 June 2024, the Group had net current liabilities of £2,181,620 (2023: £3,180,868) including £4,708,205 (2023: £4,723,676) of invoice discounting advances. The day to day funding requirements are met through the invoice discounting facility which has been agreed on a rolling basis and no matters have been drawn to the director's attention to suggest that the facility will not be renewed on acceptable terms.
The director carries out a periodic forecasting exercise covering the operations of the Group and as a result of this and considering possible sensitivities, the director has a reasonable expectation that the Group has adequate resources to continue to meet the obligations of the Group as they fall due.
The director will continue to monitor the situation closely, but at the date of signing the accounts, the director has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The director has therefore prepared the financial statements on a going concern basis.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

These conditions are typically met upon delivery.

  
2.5

Employee benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

Page 20

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.6

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.
For the goodwill relating to the acqusition of Traditional Norfolk Properties Limited, amortisation is calculated on a straight line basis over a period of 10 years from the date of acqusition, such number of years being the director's estimate of the period over which benefits may reasonably be expected to accrue from the acquisition.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following bases:

RHI contracts
-
18 years straight line
Website
-
10% reducing balance

Contract intangible assets represent the independent valuation attributable to RHI contracts incorporated into the group. This is being written off to profit or loss over the life of the contracts of 18 years.
The assets residual values, useful lives and amortisation methods are reviewed and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 21

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)


2.7
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Freehold property
-
2% and 20% straight line
Plant and machinery
-
15% reducing balance and 50% straight line
Motor vehicles
-
25% reducing balance
Office equipment
-
20% reducing balance
Property improvements
-
10% - 20% reducing balance and 2% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Statement of Comprehensive Income.

  
2.8

Impairment

At each balance sheet date non-financial assets not carried at fair value are assessed to determine  whether  there is an indication that the asset (or asset's cash generating unit) may be impaired. If there is such an indication the recoverable amount of the asset (or asset's cash generating unit) is compared to the carrying amount of the asset (or asset's cash generating unit).
The recoverable amount of the asset (or asset's cash generating unit) is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's (or asset's cash generating unit) continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset.
If the recoverable amount of the asset (or asset's cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the Consolidated Statement of Comprehensive Income, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in the Consolidated Statement of Comprehensive Income.
If an impairment loss is subsequently reversed, the carrying amount of the asset  (or asset's  cash  generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the  revised  carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.

Page 22

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.9

Stocks

Stocks and work in progress are valued at the lower of cost, calculated on a first in first out basis, and estimated net realisable value. The cost of work in progress and finished goods comprises materials, direct labour and attributable production overheads. Net realisable value is based on estimated selling price after allowing for all further costs of completion and disposal. Provision is made for obsolete, slow moving or defective stock where appropriate.
Stocks consist predominantly of biological assets which are accounted for using the cost model as set out above. The significant assumptions applied are set out in note 3.

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

  
2.11

Invoice discounting

Where debts are invoice discounted  the separate presentation  treatment has been adopted. In accordance   with this, the gross amount of the debts are included within trade debtors with advances received from invoice discounting being shown as a liability included within creditors due within one year.

  
2.12

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet.  Those  held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.
Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the period of the lease.

Page 23

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.13

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Consolidated Statement of Comprehensive Income at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.

 
2.14

Finance costs

Finance costs are charged to the Consolidated Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.15

Borrowing costs

All borrowing costs are recognised in the Consolidated Statement of Comprehensive Income in the year in which they are incurred.

 
2.16

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 the Consolidated Statement of Comprehensive Income 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.

 
2.17

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.19

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

Page 24

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.20

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.21

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to the Consolidated Statement of Comprehensive Income.

 
2.22

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. 
However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

 
2.23

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 25

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that the actual outcomes could differ from those estimates. Estimates and judgments are continually evaluated and are based  on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the process of applying the company’s accounting policies, management has made the following judgements and estimates which have the most significant effect on the amounts recognised in the financial statements:
Depreciation of tangible assets
An allowance for depreciation is made against tangible assets and charged to the statement of comprehensive income over the useful economic lives of the assets. The useful economic life assessment of an asset is  based on the time in which benefits of the asset are realised to the company. See note 14 for the net carrying value of the tangible assets, and note 2.7 for the useful economic lives for each class of asset.
Impairment of debtors
The director makes an estimate of the recoverable value of trade and other debtors. When  assessing  impairment of trade and other debtors, the directors consider factors including the credit worthiness and financial conditions of customers. See note 17 for the net carrying amount of the debtors.
Valuation of stocks
The director makes an estimate of the recoverable value of stocks. When calculating the stock provision, management considers the nature and condition of the stock as well as applying  assumptions  around anticipated saleability of goods held for resale. See note 16 for the net carrying amount of stocks.
Management have estimated costs directly attributable to the valuation of livestock. These estimates include a proportion of overheads absorbed into the stock valuation. 
For gas, shavings and vet & medical costs in relation to chicks, a unit price is calculated by dividing the total cost for the year by the number of birds processed. This unit cost is then multiplied by the quantity of chicks in a given batch at the year end. This cost is also split evenly between the time chicks spend on a Brood/day old to death farm and time spent on a finish farm.
Contract rearing costs are calculated as a cost per bird per day. The contract rearing cost per bird used is calculated as the total cost for the contract rearing per the rate agreed with the contract rearer divided by the number of batches per farm. The cost absorbed into the year-end stock value is then calculated by multiplying the cost per bird by the quantity of chicks in a batch at the year-end multiplied by the number of days they have spent on the farm.
For rent, a cost per bird is calculated based on the annual rent charge per farm divided by the total number of batches of chickens that are sent to that farm in the period. Farms will provide monthly rental invoices which remain consistent throughout the year, therefore a monthly invoice will be multiplied by 12 to give an annual rental amount that is applied in the calculation. The rent cost per batch is then multiplied by the total quantity in stock at year-end.
Labour costs are absorbed based on the total wages in relation to workers in the weekly paid catching, farm building and farming departments. Using the total of these wage costs a cost per bird for the year is calculated by dividing the labour cost by birds processed. A cost per chick per day is then calculated based on an assumed life cycle of 63 days per chick, which is based on an average of all kill days for the various types of chickens bred per industry standards. The cost per bird per day is then applied to the number of birds in stock at the year-end.

Page 26

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

4.


Turnover

The director is of the opinion that there is only one category of business as set out in note 1, and consequently no segmental analysis by activity has been provided. 

All turnover arose within the United Kingdom.


5.


Other operating income

2024
2023
£
£

RHI income
175,766
158,714

Net rents receivable
55,807
54,708

Government grants receivable
293,674
-

Insurance claims receivable
(16,147)
139,893

Sundry income
56,403
106,416

Income from business interruption claims
-
2,556,188

565,503
3,015,919



6.


Employees

Staff costs, including director's remuneration, were as follows:


Group
Group
2024
2023
£
£


Wages and salaries
8,060,584
7,333,710

Social security costs
760,317
727,194

Pension costs - defined contribution scheme
210,185
116,227

9,031,086
8,177,131


The average monthly number of employees, including the director, during the year was as follows:



Group
Group
Company
Company
        2024
        2023
        2024
        2023
            No.
            No.
            No.
            No.









Administrative
14
10
-
-



Management
41
42
1
1



Production
133
138
-
-



Farms
46
41
-
-

234
231
1
1

Page 27

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

7.


Directors remuneration - Group

2024
2023
£
£



Director's emoluments
299,177
19,304

Company contributions to private pension schemes
90,000
-

During the year retirement benefits were accruing to 2 directors (2023 - Nil) in respect of defined contribution pension schemes.
The highest paid director received remuneration of £93,549 (2023 - £19,304).
The value of the Group's contributions to a defined contribution pension scheme in respect of the highest paid director amounted to £nil (2023 - £nil).
Key management is considered to be the director, and the directors of the trading subsidiary. As such, the key management compensation is equivalent to the director's emoluments above.


8.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Hire of plant and machinery
192,988
173,441

Depreciation of tangible assets
986,411
982,255

Depreciation - assets on hire purchase contracts
108,026
198,066

Loss on sale of tangible assets
-
17,485

Loss on sale of intangible assets
17,629
-

Amortisation of intangible assets
161,134
162,061

Defined contribution pension costs
210,185
116,227

Government capital grants
(63,857)
(55,016)

Page 28

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

9.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors and their associates:


2024
2023
£
£

Fees payable to the Company's auditors and their associates for the audit of the consolidated and parent Company's financial statements
45,000
49,125

Fees payable to the Company's auditors and their associates in respect of:

The preparation of the consolidated accounts and single company accounts of the group
6,600
3,750

The preparation of accounts for associates of the Company
1,500
11,625

Taxation compliance services for the group and associates
5,400
6,750

Other taxation advisory services
15,060
-


10.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
127,999
150,793

Other loan interest payable
8,224
10,918

Finance leases and hire purchase contracts
48,561
99,581

Other interest payable
457,155
314,496

641,939
575,788


11.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
740,657
-


Total current tax
740,657
-

Deferred tax


Origination and reversal of timing differences
225,412
(90,763)

Adjustments in respect of previous periods
195,071
-

Total deferred tax
420,483
(90,763)


Tax on profit/(loss)
1,161,140
(90,763)
Page 29

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 25%). The differences are explained below:

2024
2023
£
£


Profit/(loss) on ordinary activities before tax
3,193,750
(146,347)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 25%)
798,438
(1,453)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
245
603

Adjustments to tax charge in respect of prior periods
195,071
-

Effect of changes in corporation tax rate
-
(52,717)

Non-taxable income
(15,964)
(20,412)

Other differences leading to an increase (decrease) in the tax charge
183,350
(16,784)

Total tax charge for the year
1,161,140
(90,763)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


12.


Deferred taxation


Group



2024


£






At beginning of year
(916,363)


Charged to profit or loss
(382,741)


Arising on business combinations
(37,742)



At end of year
(1,336,846)

Page 30

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
 
12.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:





Group
Group
2024
2023
£
£

Accelerated capital allowances
1,338,028
916,363

Pension surplus
(1,182)
-

1,336,846
916,363


13.


Intangible assets

Group 





Website
RHI contracts
Goodwill
Total

£
£
£
£



Cost


At 1 July 2023
21,454
637,628
1,246,178
1,905,260


Disposals
(21,454)
-
-
(21,454)



At 30 June 2024

-
637,628
1,246,178
1,883,806



Amortisation


At 1 July 2023
2,732
250,050
290,775
543,557


Charge for the year on owned assets
1,093
35,423
124,618
161,134


On disposals
(3,825)
-
-
(3,825)



At 30 June 2024

-
285,473
415,393
700,866



Net book value



At 30 June 2024
-
352,155
830,785
1,182,940



At 30 June 2023
18,722
387,578
955,403
1,361,703



Page 31

 


 
M. R. GORTON LIMITED


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024


14.


Tangible fixed assets


Group







Freehold property
Property improvement
Plant and machinery
Motor vehicles
Office equipment
Total

£
£
£
£
£
£



Cost or valuation


At 1 July 2023
4,749,608
3,644,625
13,558,502
615,466
201,958
22,770,159


Additions
-
62,156
631,434
31,195
16,829
741,614



At 30 June 2024

4,749,608
3,706,781
14,189,936
646,661
218,787
23,511,773



Depreciation


At 1 July 2023
684,165
784,291
8,270,885
454,520
147,510
10,341,371


Charge for the year
75,466
150,405
813,919
41,996
12,651
1,094,437



At 30 June 2024

759,631
934,696
9,084,804
496,516
160,161
11,435,808



Net book value



At 30 June 2024
3,989,977
2,772,085
5,105,132
150,145
58,626
12,075,965



At 30 June 2023
4,065,443
2,860,334
5,287,617
160,946
54,448
12,428,788

Page 32

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

           14.Tangible fixed assets (continued)

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2024
2023
£
£



Plant and machinery
612,145
1,096,023

Motor vehicles
-
53,578

612,145
1,149,601

Included in the cost of freehold property is freehold land of £821,465 (2023: £821,465) which is not depreciated.


Company






Freehold property

£

Cost or valuation


At 1 July 2023
-


Additions
666,936



At 30 June 2024

666,936



Depreciation


At 1 July 2023
-


Charge for the year
-



At 30 June 2024

-



Net book value



At 30 June 2024
666,936



At 30 June 2023
-






Page 33

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 July 2023
8,354,014


Additions
50


Transfer of value upon hive up of properties from subsidiaries
(666,986)



At 30 June 2024
7,687,078





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Holding

Traditional Norfolk Properties Limited
Oak Tree Business Park, Hargham Road, Shropham, Norfolk, NR17 1DS
100%
Traditional Norfolk Poultry Limited
Oak Tree Business Park, Hargham Road, Shropham, Norfolk, NR17 1DS
100%
The Norfolk Black Chicken Ltd
Oak Tree Business Park, Hargham Road, Shropham, Norfolk, NR17 1DS
100%

At the year end, both Traditional Norfolk Poultry Limited and The Norfolk Black Chicken Ltd were held directly. Traditional Norfolk Properties Limited was formerly held directly but disposed of during the year.

The aggregate of the share capital and reserves as at 30 June 2024 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Traditional Norfolk Properties Limited
(46,347)
458,717

Traditional Norfolk Poultry Limited
7,666,326
1,587,063

The Norfolk Black Chicken Ltd
-
-

Page 34

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

16.


Stocks

Group
Group
2024
2023
£
£

Raw materials and consumables
219,051
1,778,426

Work in progress (goods to be sold)
2,065,851
200,579

Finished goods and goods for resale
15,595
22,421

2,300,497
2,001,426


No provision for impairment has been made against stock and work in progress (2023 - £ Nil).
The replacement value of stock is not materially different to the carrying value.
The Company held no stock at the year end (2023 - £ Nil).


17.


Debtors

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£


Trade debtors
6,485,831
5,460,627
-
-

Amounts owed by group undertakings
-
-
-
917,072

Other debtors
371,675
480,719
-
-

Prepayments and accrued income
273,195
331,529
-
-

7,130,701
6,272,875
-
917,072


Included within trade debtors are amounts totalling £5,963,987 (2023 - £5,460,627) that are subject to an invoice discounting agreement. These assets have not been derecognised from the balance sheet because the Group remains ultimately responsible for any unpaid balance, so the director consider significant risks to have been retained.
Amounts due from group undertakings are unsecured, interest free, and have no fixed date of repayment.

Page 35

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

18.


Creditors: Amounts falling due within one year

Group
Group
as restated
Company
Company
2024
2023
2024
2023
£
£
£
£

Bank loans
470,806
529,261
226,869
276,689

Trade creditors
4,501,821
5,177,428
-
-

Amounts owed to group undertakings
-
-
-
1,047,309

Corporation tax
835,990
101,554
-
-

Other taxation and social security
203,624
129,250
-
-

Obligations under finance lease and hire purchase contracts
204,441
377,693
-
-

Proceeds of factored debts
4,708,205
4,723,676
-
-

Other creditors
553,402
206,895
418,886
-

Accruals and deferred income
367,138
520,086
25,545
26,000

11,845,427
11,765,843
671,300
1,349,998


The proceeds of factored debts relate to amounts advanced under invoice discounting. The balance is measured on the trading debts for which the Group has received monies in advance of trading debt settlement.
Amounts owed to group undertakings are unsecured, interest free, and have no fixed date of repayment.
The hire purchase contracts are secured against the relevant assets. Repayments are made on a monthly basis. Interest is charged at rates between 1.35% and 4.55%.

Page 36

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

19.


Creditors: Amounts falling due after more than one year

Group

Group
as restated
Company

Company
2024
2023
2024
2023
£
£
£
£

Bank loans
3,338,465
3,772,302
2,823,935
3,013,836

Net obligations under finance leases and hire purchase contracts
186,583
411,889
-
-

Other creditors
-
837,773
-
837,773

Accruals and deferred income
734,907
771,818
-
-

4,259,955
5,793,782
2,823,935
3,851,609



The following liabilities were secured:
Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£


Bank loans
3,809,271
4,260,131
3,050,804
3,249,092

Hire purchase contracts
391,025
789,582
-
-

Invoice discounting advance
4,708,205
4,723,676
-
-

8,908,501
9,773,389
3,050,804
3,249,092

Details of security provided:

The bank holds a fixed and floating charge over all assets of the Group against indebtedness to it.
Hire purchase contracts are secure against the underlying assets concerned.
Invoice discounting advance are secured against the Group's freehold property and trade debtors.



Page 37

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

20.


Loans


Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£

Amounts falling due within one year

Bank loans
470,806
529,261
226,869
276,688

Amounts falling due 1-2 years

Bank loans
477,156
466,602
232,304
235,256

Amounts falling due 2-5 years

Bank loans
2,835,420
3,218,826
2,591,631
2,778,580

Amounts falling due after more than 5 years

Bank loans
25,889
86,874
-
-

3,809,271
4,301,563
3,050,804
3,290,524


At the end of the year, the subsidiaries in the Group had five loans outstanding as follows:
Loan 1 - This is an ongoing loan with Paragon Business Finance plc. The loan is repayable by 60 equal monthly instalments of £2,467, incurring interest at 3.90% and is due to expire in September 2024.
Loan 2 - This is an ongoing loan with HSBC Bank plc. The loan is repayable by 120 equal monthly instalments  of £5,211, incurring interest at 2.60% and is due to expire in November 2029.
Loan 3 - This is an ongoing loan with Paragon Business Finance plc. This loan is repayable by 60 equal monthly instalments of £9,945, incurring interest at 3.87% and is due to expire in July 2026.
Loan 4 - This is an ongoing loan with Investec. The loan is repayable by 60 equal monthly instalments of £6,790, incurring interest at 4.08% and is due to expire in March 2027.
The loan in M. R. Gorton Limited was drawn down in March 2021 and had a principal value of £3,700,000. It is being repaid over five years with fixed rates of interest between 2.24% and 2.37% per annum.


21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2024
2023
£
£

Within one year
204,441
377,693

Between 1-5 years
186,583
411,889

391,024
789,582

Page 38

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

22.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



100 (2023 - 100) Ordinary shares of £1.00 each
100
100

On 2 March 2021, 99 ordinary shares were issued as part of the consideration to acquire Traditional Norfolk Properties Limited. One ordinary share was also credited as fully paid as part of this acquisition. As the Company acquired more than 90% of the shares in Traditional Norfolk Properties Limited, Secton 612 of the Companies Act 2006 applies, and accordingly the company set up a merger relief reserve on the issue of the consideration of shares.
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.



23.


Reserves

Merger reserve

The merger relief reserve represents the premium for the consideration shares, issued as part of the acquisiton of Traditional Norfolk Properties Limited, over their nominal value.

Profit and loss account

This reserve represents accumulated retained profits and losses.


24.


Contingent liabilities

There is a joint and several liability under a group VAT registration. As at 30 June 2024, the total amount of VAT recoverable was £282,987 (2023 - £173,166).


25.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £210,185  (2023 - £116,227). Contributions totalling £49,101 (2023 - £38,074) were payable to the fund at the balance sheet date and are included in creditors.

Page 39

 
M. R. GORTON LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

26.


Related party transactions


Director
Companies associated with a common director
Close family of the director
£
£
£

Balance outstanding at start of year
-
(12,000)
-
Sales in year
11,000
-
-
Salaries in year
(22,570)
-
(45,994)
Purchases in year
-
(114,115)
-
Dividends declared
(303,500)
-
-
Amounts received in year
(11,000)
-
-
Amounts paid in year
326,070
108,373
45,994
Balance outstanding at year end
-
(17,742)
-


27.


Post balance sheet events

Since the year-end dividends totalling £30,000 have been paid.
The Group has made several capital purchases totalling £537,351 of which £249,446 was financed via new Hire Purchase agreements.


28.


Prior year adjustment

The Director has identified that deferred income pertaining to grants were inaccurately aged in the prior year. Consequently, the 2023 comparatives have been corrected to move £771,818 from accruals and deferred income due within one year to accruals and deferred income due after one year.


29.


Controlling party

The ultimate controlling party is Mr M R Gorton.


Page 40