Company Registration No. 04639036 (England and Wales)
CARDZONE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 JUNE 2024
CARDZONE LIMITED
COMPANY INFORMATION
Directors
Mrs C Taylor
Mr P Taylor
Mr J Taylor
Company number
04639036
Registered office
Hexgreave Hall
Upper Hexgreave
Farnsfield
Notts
NG22 8LS
Auditor
BDO LLP
Water Court
116-118 Canal Street
Nottingham
NG1 7HF
Business address
Hexgreave Hall
Upper Hexgreave
Farnsfield
Notts
NG22 8LS
CARDZONE LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 12
Statement of comprehensive income
13
Balance sheet
14
Statement of changes in equity
15
Notes to the financial statements
16 - 28
CARDZONE LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 29 JUNE 2024
- 1 -

The directors present the strategic report for the period ended 29 June 2024.

Principal activities

The principal activity of the company continued to be that of selling greeting cards and gifts.

Review of the business

The Directors are pleased to report another good year, in what continue to be challenging times for the high street. Although inflation returned to lower levels, there continue to be a number of challenges facing the high street including cost of living, high interest rates and minimum wage increases, all of which put pressure on the business,

 

Sales totalled £53.6m for the 52 week period (2023: £52.0m – 52 week period), and the Directors feel this is a satisfactory performance. LFL growth continues to be a challenge, and the location of stores remains key to achieving this. The turnover growth has come from the full year impact of new stores, which has exceeded lost revenue from closed stores. The high street continues to be unpredictable, and the company is seeing reduced footfall in the stores year on year. The company continues to monitor performance of the existing estate and continue to close the poor performing stores, which whilst impacting on turnover had improved profitability.

 

Margins remain key to the business. The company consider it a good result to have increased margins from the prior year levels given the level of inflation and price pressures coming from suppliers. The mix of sales continues to evolve with a reduced reliance on lower margin lines such as confectionery and waxes over the period of trading. Pre-tax profits have reduced slightly to £5.5 million (2023: £6.3 million).

 

During the year the group that owns Cardzone has restructured, and the company is now owned by P&C Property Rental Company Limited (parent company) on 17th April 2023. The wider group has also made a strategic acquisition of Esquire Retail Limited on 4th March 2024. The synergies between this acquisition and the Company give many opportunities moving forwards.

 

As part of this restructuring, a dividend of £14.9m was declared to the Parent Company, and this company now provides treasury management for the whole group and also provides the working capital for the company. As such the cash reserves have dropped to £3.0m (2023: £8.6m) in Cardzone. The overall cash reserves of the group leaves the company well placed to get through the continued challenges that the high street will face in the coming 12 months.

 

The Directors felt that the company was overstocked, and worked hard during the year to reduce the stock levels at the year end. The company also declared a dividend during the year which reduced the other debtors as it cleared the amounts owed from parent, rather than being paid.

 

 

CARDZONE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 2 -
Principal risks and uncertainties

The key risks identified by the Board of Directors are summarised below.

 

The business is sensitive to consumer spending and general economic conditions, and an economic slowdown could impact financial performance.

 

The global market conditions are causing price increase and availability issues, and the retail sector is not immune to this. The risk of price rises and product not being available at the key times during the year is significant and could have a large impact on the business.

 

The sales of the business are largely dependent upon providing new and compelling products that are attractive to the consumer.

 

The high street is very competitive and the footfall into stores remains challenging. Failure to remain competitive on price and attractive to customers could adversely impact the business.

 

The business leases the majority of its stores and there are risks associated with this. The stores are generally on leases for under 5 years and there are no assurances that the renegotiation of leases will be successful.

 

The key to mitigating a number of these risks, is to maintain a competitive advantage. The business seeks to create and maintain this advantage through:

Development and performance

The start of 2024 / 25 has continued similar to the previous year. Footfall on the high street continues to be down on the same period pre pandemic. The Directors continue to look for opportunities for growth and new stores.

 

The company sees investment in its current portfolio as key to success and plans to continue a schedule of store re-fits throughout the coming years. The Directors will also continue to closely monitor the existing portfolio and will look at closing any of the poorer performing stores.

Key performance indicators

The directors use the standard retail key performance indicators to monitor the performance of the company. These include like for like sales, gross profit margin, net profit margin and hours per store.

Other information and explanations

Financial risk management

The company’s operations expose it to a number of financial risks that include liquidity risk, interest rate risk and credit risk.

 

Liquidity risk

The company seeks to manage financial risk by ensuring that enough liquidity is available to meet foreseeable needs. The group maintains significant cash reserves and combined with the cash generated from operations, these facilities provide sufficient liquidity.

 

Interest rate risk

The company finances its operations through cash resources. Interest receivable on funds on deposit is affected by changes in market interest rates.

 

Credit risk

The principal credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. group only holds accounts main high street banks. As such credit risk is deemed to be low.

CARDZONE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 3 -
Promoting the success of the company

This Section 172 statement explains how the Directors:

When making decisions, each Director ensures that they act in the way they consider, in good faith, would most likely promote the Company’s success for the benefit of its members as a whole, and in so doing they have regard (among other matters) to:

a.    The likely consequence of any decision in the long term

The business operated by the Company was founded in 2003. Our longevity is built on a commitment to our customers and employees. Our mission is to build a highly profitable, multi-branded High Street retailer that sets the bar for our industry and our long-term decisions are made on the basis of continuing this.

b.    The interests of the Company’s employees

The Directors recognize that our employees are fundamental to the success of the business; having great employees depends upon our ability to attract, retain, and motivate them. From pay and benefits to our health, safety and workplace environment, the Directors factor the implications of decisions on employees and the wider workforce.

c.    The need to foster the Company’s business relationships with suppliers, customers and others

In order to succeed, we need strong, mutually beneficial relationships with suppliers, customers and our bank. These relationships are based on trust and openness.

d.    The impact of the company's operations on the community and the environment

The Company has a broad range of relationships with the communities in which it operates. The company recognises that it is has an important role in contributing to the wider society. The company has partnership with a number of Charities to promote the sale of seasonal cards to help generate income.

e.    The desirability of the company maintaining a reputation for high standards of business

Specific examples where we ensure we maintain high standards of business include data security and partnering with suppliers. To do this, we protect the data we hold, use it fairly and make sure it’s as accurate as possible. We are open about the data we collect, how we use it and who we share it with. Our relationships with suppliers are based on trust and openness.

f.    The need to act fairly as between members of the company

Stakeholder engagement is key – be it customers, suppliers, employees, or shareholders. We communicate regularly with all stakeholders through a variety of means to ensure that relationships are developed and maintained.

Compliance with Anti Bribery and Corruption laws and regulations forms part of considerations when dealing with new suppliers.

Compliance with the Modern Slavery Act; details are available in the modern slavery statements on the Clinton Cards website.

CARDZONE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 4 -

On behalf of the board

Mr P Taylor
Director
26 March 2025
CARDZONE LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 29 JUNE 2024
- 5 -

The directors present their annual report and financial statements for the period ended 29 June 2024.

Results and dividends

The results for the period are set out on page 13.

Ordinary dividends were paid amounting to £14,934,000. The directors do not recommend payment of a further dividend. In the prior year a dividend of £1,349,920 was paid.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

Mrs C Taylor
Mr P Taylor
Mr J Taylor
Disabled persons

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

Employee involvement

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

 

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

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Future developments

Information on likely future developments in the business has been included in the Strategic Report on page 2.

Auditor

BDO LLP were appointed auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Energy and carbon report

The combined energy consumption of 3,590,198 (or 3,592 MWh) for Cardzone Ltd exceeds the threshold of 40 MWh. Below this threshold, an organisation is considered to be a Low Energy User and is not required to make a detailed disclosure of their energy and carbon information.

Cardzone Ltd does not meet the definition of a Low Energy User and is required to report its detailed energy and carbon information as laid out in the following sections of this report.

 

CARDZONE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 6 -
2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
26,325
61,393
- Electricity purchased
3,231,396
3,688,844
- Fuel consumed for transport
332,477
351,918
3,590,198
4,102,155
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
94.95
94.06
- Fuel consumed for owned transport
-
-
94.95
94.06
Scope 2 - indirect emissions
- Electricity purchased
669.06
763.86
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
-
-
Total gross emissions
764.01
857.92
Intensity ratio
Tonnes CO2e per square foot
0.0022
0.0025
Quantification and reporting methodology

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per square foot, the recommended ratio for the sector.

Measures taken to improve energy efficiency

Cardzone Limited has an effective management control system covering its electricity and gas consumption through its metering & internal management and financial controls as well as the recording of business mileage using this system.

We benefit from the available energy and carbon management advice from our energy supplier and from other relevant sources.

During the reporting year, Cardzone Limited has been closely interrogating our energy use. We examine our half-hourly electricity data monthly and raise queries with sites whose data is demonstrating potential wastage. This is yielding 5-10% savings each month

Our Energy and Carbon Reporting will continue into the next year to gain further insight into our baseline energy consumption with an opportunity to reduce our electricity usage and carbon footprint in-line with contributing to the UK Government’s target to bring all greenhouse gas emissions to net zero by 2050.

 

CARDZONE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 7 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr P Taylor
Director
26 March 2025
CARDZONE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 29 JUNE 2024
- 8 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CARDZONE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARDZONE LIMITED
- 9 -
Opinion

We have audited the financial statements of Cardzone Limited (the 'company') for the period ended 29 June 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

CARDZONE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARDZONE LIMITED (CONTINUED)
- 10 -

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

CARDZONE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARDZONE LIMITED (CONTINUED)
- 11 -

Non-compliance with laws and regulations

Based on:

 

we considered the significant laws and regulations to be compliance with UK Accounting Standards, the Companies Act 2006, corporate taxes, VAT and employment taxes legislation.

 

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be health and safety legislation, sale of goods legislation, intellectual property legislation And the Bribery Act 2010.

 

Our procedures in respect of the above included:

Fraud

 

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

 

Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue and significant accounting estimates.

 

Our procedures in respect of the above included:

 

CARDZONE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARDZONE LIMITED (CONTINUED)
- 12 -

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

 

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

 

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

Laurie Hannant (Senior Statutory Auditor)
For and on behalf of BDO LLP
27 March 2025
Water Court
116-118 Canal Street
Nottingham
NG1 7HF
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
CARDZONE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 29 JUNE 2024
- 13 -
Period
Period
ended
ended
29 June
1 July
2024
2023
Notes
£
£
Turnover
3
53,645,848
51,976,957
Cost of sales
(21,883,051)
(21,540,564)
Gross profit
31,762,797
30,436,393
Administrative expenses
(26,487,525)
(24,297,344)
Other operating income
55,152
131
Operating profit
4
5,330,424
6,139,180
Interest receivable and similar income
8
207,801
185,364
Profit before taxation
5,538,225
6,324,544
Tax on profit
9
(1,405,449)
(1,434,052)
Profit for the financial period
4,132,776
4,890,492

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

CARDZONE LIMITED
BALANCE SHEET
AS AT
29 JUNE 2024
29 June 2024
- 14 -
29 June 2024
1 July 2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
85,812
164,942
Tangible assets
12
1,636,416
2,086,412
1,722,228
2,251,354
Current assets
Stocks
13
5,174,111
7,076,591
Debtors
14
5,498,968
9,664,148
Cash at bank and in hand
2,988,814
8,617,374
13,661,893
25,358,113
Creditors: amounts falling due within one year
15
(7,797,771)
(9,203,746)
Net current assets
5,864,122
16,154,367
Total assets less current liabilities
7,586,350
18,405,721
Provisions for liabilities
Provisions
16
1,588,721
1,509,700
Deferred tax liability
17
290,006
387,174
(1,878,727)
(1,896,874)
Net assets
5,707,623
16,508,847
Capital and reserves
Called up share capital
19
15
15
Profit and loss reserves
5,707,608
16,508,832
Total equity
5,707,623
16,508,847
The financial statements were approved by the board of directors and authorised for issue on 26 March 2025 and are signed on its behalf by:
Mr P Taylor
Director
Company registration number 04639036 (England and Wales)
CARDZONE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 29 JUNE 2024
- 15 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 3 July 2022
15
12,968,260
12,968,275
Period ended 1 July 2023:
Profit and total comprehensive income
-
4,890,492
4,890,492
Dividends
10
-
(1,349,920)
(1,349,920)
Balance at 1 July 2023
15
16,508,832
16,508,847
Period ended 29 June 2024:
Profit and total comprehensive income
-
4,132,776
4,132,776
Dividends
10
-
(14,934,000)
(14,934,000)
Balance at 29 June 2024
15
5,707,608
5,707,623
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 JUNE 2024
- 16 -
1
Accounting policies
Company information

Cardzone Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hexgreave Hall, Upper Hexgreave, Farnsfield, Notts, NG22 8LS.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Cardzone Limited is a wholly owned subsidiary of Pillarbox Designs Limited and the results of Cardzone Limited are included in the consolidated financial statements of P & C Property Rental Company Limited which are available from Newstead House, Pelham Road, Nottingham, NG5 1AP.

CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
1.2
Going concern

The financial statements have been prepared on a going basis, having taken into account both the current trading of the business and the future outlook of the business.true

 

The Company has prepared financial forecasts for the 2025 and 2026 financial year ends, which is in excess of 12 months from the date of signing the Cardzone Limited financial statements. The forecasts have taken into account trading to December 2024 and expected trading for the remaining months of the financial year and then the following 12 months. The company continues to closely monitor its costs and reducing these wherever possible

 

The Board of Directors closely monitor cash balances throughout the year and has a strong cash position coming out of December 2024. The company has considered a range of like for like sales performances and the impact that this would have on the cash position. The Company does not currently have any bank debt within the business. After making appropriate enquiries, the Directors have a reasonable expectation that the Company has adequate cash resources to continue its operations and operate within its banking facilities.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is between 3 and 5 years.

 

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Franchise Fees
3 years
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings Freehold
2% straight line
Land and buildings Leasehold
Written off over lease term
Fixtures, fittings & equipment
15% straight line
Motor vehicles
25% straight line
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 18 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Stocks

Stock is valued at the lower of cost and net realisable value primarily using the retail method and represents goods for resale. The retail method is an industry-specific accounting method used to derive a weighted average product cost. Product cost and retail values are aggregated into categories to determine an average margin per category. These margins are then applied to the retail value of stocks to derive the cost of the stocks. Net realisable value is the estimated selling price in the ordinary course of business. This method intrinsically takes into account any mark down of any obsolete or slow moving goods sold below cost.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments
Other financial assets

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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 19 -
Other financial liabilities

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.

Derecognition of financial liabilities

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

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 20 -
1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

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.

1.13
Retirement benefits

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

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Rentals payable under operating leases are charged against income on a straight-line basis over the lease term. For those leases where a rent-free period exists, the value of the rent-free period is spread evenly over the lease term.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.16

Onerous lease provision

Present obligations arising out of onerous contracts are recognised and measured as provisions. An onerous lease is considered to exist with the company has a contract under which the unavoidable costs of meeting its obligations exceed the economic benefits expected to be received. The amounts provided are based on the Company’s best estimate of the least cost of exit. Due to the short lease terms, the impact of discounting is not material.

1.17

Dilapidations provision

Provision for dilapidation is made at the best estimate of expenditure required to settle the obligation at the reporting date. A dilapidation provision is only recognised on those properties which are likely to be exited. Where such property has been identified, the full costs expected are recognised. This provision relates to the wear and tear incurred on the leasehold properties. The impact of discounting is not material.

 

 

 

 

CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

Dilapidation provisions:

 

Dilapidations costs for stores that have closed, have had notice served on the lease during the period, or the Directors plan to close in the next 12 months have been estimated and included within accruals based on the knowledge of previous costs incurred in respect of prior store closures.

 

Goodwill amortisation:

 

The company estimates the useful life of goodwill 3-5 years based on the average length of the lease remaining when the stores are acquired.

 

Depreciation:

 

Fixtures and fittings are depreciated over 7 years. The Directors have assessed the average length of time between refits of stores and considered that 7 years is the average length of time between store refits and the date of which fixtures and fittings are replaced.

 

Stock valuation:

 

Valuation of stock is done based on the margin attributable to each category of stock. There is an element of estimation involved in this due to the number of products within each category where the margin fluctuates.

 

Onerous lease provision:

 

The company assess the performance of each of the store and provide an estimate of future losses for the remaining period of the lease.

 

Impairment of tangible and intangible fixed assets:

 

The company impairs the intangible and tangible fixed assets of any stores that are loss making where they are not expected to return to profits during the remaining life of the lease.

 

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2024
2023
£
£
Other revenue
Interest income
207,801
185,364

The whole of the turnover of the group is attributable to one class of business the sale of greeting cards and gifts all of which arose in the UK.

 

CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 22 -
4
Operating profit
2024
2023
Operating profit for the period is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
558,145
550,486
Loss/(profit) on disposal of tangible fixed assets
32,421
(28,946)
Amortisation of intangible assets
79,130
79,940
Onerous lease provision utilised / created
252,021
(2,267,210)
Operating lease charges
7,072,031
7,048,376
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
65,000
50,000
6
Employees

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

2024
2023
Number
Number
Management
3
3
Administration
28
30
Stores
936
901
Total
967
934

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
10,968,089
10,476,271
Social security costs
595,142
556,621
Pension costs
161,405
379,873
11,724,636
11,412,765
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 23 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
174,799
575,794
Company pension contributions to defined contribution schemes
1,321
251,321
176,120
827,115

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
n/a
398,000
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
207,801
185,364
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,502,617
1,391,235
Deferred tax
Origination and reversal of timing differences
(97,168)
42,817
Total tax charge
1,405,449
1,434,052
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
(Continued)
- 24 -

The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
5,538,225
6,324,544
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
1,384,556
1,296,532
Expenses not deductible for tax purposes, other than goodwill and intangible asset amortisation
41,969
21,465
Non-tax deductible amortisation of goodwill and intangible assets in excess of capital allowances
-
0
16,387
Other timing differences leading to an increase in tax charge
80,139
56,851
Depreciation in excess of capital allowances
(4,047)
42,817
Movement in deferred taxation
(97,168)
-
0
Taxation charge for the period
1,405,449
1,434,052

Factors that may affect future tax charged

 

From 1 April 2023 the corporation tax rate increased to 25%.Deferred taxes at the balance sheet date

have been measured using these enacted rates and reflected in the financial statements.

 

10
Dividends
2024
2023
£
£
Final paid
14,934,000
1,349,920
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 25 -
11
Intangible fixed assets
Goodwill
Franchise Fees
Total
£
£
£
Cost
At 2 July 2023 and 29 June 2024
3,088,724
7,200
3,095,924
Amortisation and impairment
At 2 July 2023
2,923,782
7,200
2,930,982
Amortisation charged for the period
79,130
-
0
79,130
At 29 June 2024
3,002,912
7,200
3,010,112
Carrying amount
At 29 June 2024
85,812
-
0
85,812
At 1 July 2023
164,942
-
0
164,942
12
Tangible fixed assets
Land and buildings Freehold
Land and buildings Leasehold
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 2 July 2023
408,000
14,541
4,288,929
374,186
5,085,656
Additions
-
0
-
0
484,625
84,599
569,224
Disposals
(408,000)
-
0
(153,708)
(217,745)
(779,453)
At 29 June 2024
-
0
14,541
4,619,846
241,040
4,875,427
Depreciation and impairment
At 2 July 2023
24,000
14,541
2,765,183
195,520
2,999,244
Depreciation charged in the period
-
0
-
0
497,885
60,260
558,145
Eliminated in respect of disposals
(24,000)
-
0
(153,708)
(140,670)
(318,378)
At 29 June 2024
-
0
14,541
3,109,360
115,110
3,239,011
Carrying amount
At 29 June 2024
-
0
-
0
1,510,486
125,930
1,636,416
At 1 July 2023
384,000
-
0
1,523,746
178,666
2,086,412

During the year the properties were disposed of at net book value to the parent company, P & C Property Rental Company Limited.

13
Stocks
2024
2023
£
£
Finished goods and goods for resale
5,174,111
7,076,591
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 26 -
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
11,166
-
0
Amounts owed by group undertakings
2,350,000
-
0
Other debtors
117,541
6,667,626
Prepayments
3,020,261
2,996,522
5,498,968
9,664,148
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
3,831,339
4,411,634
Corporation tax
689,834
687,216
Other taxation and social security
609,261
866,073
Other creditors
1,226,631
1,668,073
Accruals
1,440,706
1,570,750
7,797,771
9,203,746
16
Provisions for liabilities
2024
2023
£
£
Dilapidations
467,000
640,000
Onerous Lease
1,121,721
869,700
1,588,721
1,509,700

Onerous lease provisions will unwind over the next 4 years. Dilapidations provisions are expected to be utilised in 1 and 2 years. The onerous lease has been discounted.

Movements on provisions:
Dilapidations
Onerous Lease
Total
£
£
£
At 2 July 2023
640,000
869,700
1,509,700
Additional provisions in the year
233,000
1,016,447
1,249,447
Reversal of provision
(246,000)
(259,810)
(505,810)
Utilisation of provision
(160,000)
(482,830)
(642,830)
Unwinding of discount
-
(21,786)
(21,786)
At 29 June 2024
467,000
1,121,721
1,588,721
CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 27 -
17
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
290,006
387,174
2024
Movements in the period:
£
Liability at 2 July 2023
387,174
Credit to profit or loss
(97,168)
Liability at 29 June 2024
290,006
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
161,405
379,873

The company operates a defined contribution pension scheme for all qualifying employees.

 

At the year end £32,071 (2023: £nil) was included within creditors relating to the pension.

 

19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1p each
14,500
14,500
15
15

The shares are all voting shares, free from restrictions and entitled to dividends.

CARDZONE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JUNE 2024
- 28 -
20
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases relating to retail stores, which fall due as follows:

2024
2023
£
£
Within one year
6,254,623
7,064,347
Between two and five years
5,147,838
12,866,812
In over five years
112,416
364,493
11,514,877
20,295,652

Lease payments relating to retail stores recognised as an expense during the period amounted to £7,459,560 (2023: £7,048,376). The 2023 comparative figure has been updated to remove the service charge paid.

 

Lease payments relating to motor vehicles recognised as an expense during the period amounted to £10,774 (2023: £17,638).

 

21
Related party transactions
Transactions with related parties

During the period the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

Other information

During the period, the company paid rents of £18,112 (2023: £58,387) for properties in which the directors, Mr P Taylor and Mrs C Taylor, had a personal interest. At the period end £nil (2023: £nil) was owed to Mr & Mrs Taylor.

 

During the year the company transferred properties with a value of £384,000 to P & C Property Rental Company Limited through a dividend in specie.

 

During the year Cardzone Limited paid rents of £180,287 (2023: £108,092) to P&C Property Rental Company Limited.

22
Ultimate controlling party

The company is a subsidiary undertaking of Pillarbox Designs Limited.

 

At the balance sheet date, P & C Property Rental Company Limited is the parent undertaking of the largest group for which group financial statements have been prepared. These consolidated financial statements are available from Companies House.

 

The ultimate parent undertaking is P & C Property Rental Company Limited (registered in United Kingdom at Newstead House, Pelham Road, Nottingham, Nottinghamshire, NG15 1AP) and the ultimate controlling party at the balance sheet date was Mr P Taylor, a director and majority shareholder of the company.

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