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Kandy Works Properties Limited

Registered number: 12913500
Annual report and
 financial statements
For the year ended 30 June 2024

 
KANDY WORKS PROPERTIES LIMITED
 
 
COMPANY INFORMATION


Directors
D T Abbott 
S F Brown 
N A Reed (appointed 1 November 2024)
D M Bannerman (appointed 1 November 2024)




Company secretary
D T Abbott



Registered number
12913500



Registered office
Kandy Works
Brown Lane East

Leeds

West Yorkshire

LS11 0BT




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor

3 Wellington Place

Leeds

LS1 4AP





 
KANDY WORKS PROPERTIES LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 5
Directors' Report
 
6 - 8
Independent Auditor's Report
 
9 - 12
Consolidated Statement of Comprehensive Income
 
13
Consolidated Statement of Financial Position
 
14
Company Statement of Financial Position
 
15
Consolidated Statement of Changes in Equity
 
16
Company Statement of Changes in Equity
 
17
Consolidated Statement of Cash Flows
 
18
Notes to the Financial Statements
 
19 - 38


 
KANDY WORKS PROPERTIES LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024

Introduction
 
The directors present their Strategic Report and the audited financial statements for the year ended 30 June 2024.

Business review
 
The Statement of Comprehensive Income, which is set out on page 13, shows the business turnover decreasing from £48.3m to £40.6m.
This fall was primarily in sales to its own customers and marketplace partners. Wholesale and retail remained in line with expectations.
Following a thorough review of the factors contributing to the fall in turnover, the Group believes that whilst the current market conditions and reduced consumer spending in the clothing sector were both factors, it was also driven by internal factors which could be changed:
 
a)The Group's changed strategy in order to widen the product’s appeal. It believes this had an adverse effect on customer spend as diluting the individuality and handwriting of the product alienated the existing customer base. 
 
b)Issues pertaining to the e-commerce platform led to inefficiencies during the fiscal year. This was despite efforts to increase sales and improve the customer experience. The various operational and technical challenges caused a suboptimal performance across key performance metrics.
 
The Group has redressed these issues and trading is returning to the levels experienced prior to last year’s fall. 
Other factors within the business were an increase in gross margin from 58.7% to 60.0% during the year. This was the result of selling less discounted product.
Marketing expenditure decreased by £0.9m as the Group sought to market more efficiently to its customers. The Board believes this was the right strategy given the United Kingdom’s challenging macroeconomic environment, as evidenced by stagnant retail sales across the sector. 
The Group did not copy the heavy discounting tactic used by many of the brand’s competitors to boost sales in response to the headwinds they faced. Instead, the Board took the view that continuing to invest in the brand would better serve the Group's long-term interests.
Employment costs rose £0.5m during the year as the Group continued to enhance its team, especially in e commerce and buying. This aimed to improve the consumer’s online experience and enhance the depth and breadth of the range available to them.
Overheads rose by £1.2m. Most of this increase was due to a provision made for a commercial legal dispute, asset impairment coupled with increased Rent and Rates from an additional retail unit. The Group continues to monitor all aspects of expenditure and seeks to be as efficient as possible.
Operating profit reduced by £3.7m in the financial year leading to a loss before tax of £1.7m, and EBITDA decreased by £3.5m.
The Group continued holding healthy cash reserves to exploit market opportunities and insure against business shocks.
 
- 1 -

 
KANDY WORKS PROPERTIES LIMITED
 

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


Business environment
The Group continues to operate in a very competitive market. A wide array of brands provide consumers with clothing, homeware, and accessories through multiple channels. To insulate against market shifts, Joe Browns Limited constantly monitors its competitors and recognises the need to invest carefully in all areas of its business. This is especially important at the touchpoints the customers have with the label as this is where the most difference can be made to customer experience.
Emphasis continues to be placed on product quality, range, and branding. The Group continues to invest in its website, and while paper marketing remains an important part of its strategy, it has embarked on a more e commerce-focused plan.
The Group also concentrated on sustainability, a key concern for its customers and the fashion industry. It has committed to minimising the negative environmental and social impacts associated with manufacturing, transporting, and packaging the goods it sells.
Future developments
The Group will continue to invest in recruiting new customers and retaining existing ones. It believes that increasing the number of shoppers and keeping those already engaged with the brand offers the best opportunity to return to increased sales and profitability quickly.
The Group recognises that it should also strive to improve the efficiency of its operations through vigorous cost control and, where possible, cost elimination.

Principal risks and uncertainties
 
The Group's board has developed a framework for identifying risks and uncertainties that may impact its performance. It focuses on but is not limited to the following:
 
Changing consumer spending habits - this is managed by frequent analysis of external trends and closely monitoring its product sales and the behaviour of its competitors.
 
Inflation – the Group recognises that despite inflation reducing during the financial year, its customers have seen a fall in their standard of living and that they will continue to have concerns about the cost of living. It realises that any future prolonged period of inflation will impact consumers’ purchasing habits again as real incomes suffer. 
 
Adverse exchange rate fluctuations - the Group is vulnerable to falls in the value of the GBP relative to the USD as many of its supplier's price in USD. To combat this, it purchases USD in advance of the applicable season. However, it recognises that this is a short-term measure and that long-term currency risk and the inherent pressure on prices are best managed by investment in the brand so that consumers’ desire to be associated with its products is as price-inelastic as possible.
 
Supplier failure - this is continually monitored, and any supplier considered at risk of collapse or suffering from issues that may cause severe delays is replaced. The Group maintains close relationships with several manufacturers with short lead times, so it can quickly assign replacement orders in the event of a supplier's failure to deliver.
 
- 2 -

 
KANDY WORKS PROPERTIES LIMITED
 

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

Brand reputation - the Group constantly monitors its brand perception via customer interaction and social and traditional media. It also continually invests in the brand to maximise its resilience.
 
Financial risk - the Group maintains a large cash balance to insulate against significant financial shocks. This also ensures that it is not beholden to any lender for its short- or long-term financing requirements.
 
Environmental and social concerns - the Group has implemented systems to monitor environmental and social risks within its supply chain. It recognises that failing to manage these risks could severely damage the brand’s reputation.
 
Cybersecurity - the Group  has implemented a comprehensive cybersecurity policy which addresses areas such as compliance, data safeguarding and maintaining digital assets.   

Financial key performance indicators
 
Key performance indicators used by the directors to monitor the Group include the following:


2024
2023
Turnover
40.6
48.3
Gross margin as % of turnover 
60.0%
58.7%
EBITDA (£m)
(1.1)
2.4


 
Statement of Compliance with Section 172 (1) Companies Act 2006
 
The board of directors of Kandy Works Properties Limited consider that both individually and together for the year ended 30 June 2023 they have acted in the way they consider, in good faith, would be the most likely to promote the success of the Group for the benefit of its members as a whole and having regard to the matters set out in s.172 (1) (a) to (f) as below:
a)  The likely consequences of any decision in the long term;
b)  The interests of the Group’s employees;
c)  The need to foster the Group’s business relationships with suppliers, customers and others;
d)  The impact of the Group’s operations on the community and the environment;
e)  The desirability of the Group maintaining a reputation for high standards of business conduct; and
f)  The need to act fairly between members of the Group.
(a)  The likely consequences of any decision in the long term:
The directors acknowledge that all decisions should be based on the Group's and its stakeholders' long-term interests. The impact of any decision is discussed, and one of the factors weighed in that discussion is its lasting implications. The Group’s dividend policy reflects this. The effect of the timing and quantum of the dividend is balanced against the interests of the other parties, which are crucial to the sustainability of the business. This ensures that dividends are only paid when they will not detrimentally affect the stakeholders' current or future interests. For example, care is taken to ensure the Group retains enough funds to be able to take advantage of any profitable investments at a later date.
 
- 3 -

 
KANDY WORKS PROPERTIES LIMITED
 

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

(b)  The interests of the Group’s employees:
The directors affirm that the business cannot function without its employees' goodwill, hard work and dedication. It knows that the key to maintaining this relationship is ensuring that the employee’s interests align with the Group’s. The Group regularly seeks the views of its staff. Its team members are formally interviewed on a routine basis, and the Group also conducts anonymous surveys. It hopes this mix of methods encourages an honest and forthright interaction between all employees. It provides weekly email updates detailing the Group’s performance to its employees. In addition, the directors visited the Group’s other locations where possible. This was done regularly to solicit the views of the staff based at its stores.
The Group also conducts frequent benchmarking exercises, measuring itself against other employers to ensure that it continues to be seen as an employer of choice by prospective candidates. These assignments examine the salaries and other benefits competitors offer in the same or similar labour markets. The Group then seeks to ensure that the packages it compensates its staff with retain and, where necessary, attract the best employees.
(c) The need to foster the Group’s business relationships with suppliers, customers and others:
The directors recognise that one of their core responsibilities is to encourage the development of its connections with suppliers and customers. Staff are instructed that part of their duties is to maintain good relationships with their partners outside the organisation and that this is crucial to the success of the Group. All the suppliers are regularly interacted with and visited to strengthen these bonds. The Group’s board knows it cannot successfully exist without engaging with its customers. To this end, they are regularly surveyed online and using focus groups. The business maintains various social media links and employs staff to generate, monitor and respond to posts. It also operates a customer-specific contact centre open 7 days a week. Interactions with this service are aggregated and reported upon so that significant problems are pre-empted. The aim is to create an association that generates a lasting willingness to purchase.
(d)  The impact of the Group’s operations on the community and the environment:
The directors know the business is nested in its local community and relies on civic amenities to function. It also draws many of its staff from the local area, so it needs to maintain good community relations. The Group is investing in sustainability to reduce its environmental impact by incorporating more recycled material into its range and packaging. Furthermore, the Group continues to support local charities through clothing donations.
The Group also ensures that it complies with best practice where possible to minimise its environmental effect in all areas.
(e)  The desirability of the Group maintaining a reputation for high standards of business conduct:
The directors of the Group recognise their essential duty to ensure that the Group complies with the laws and regulations in each of the jurisdictions in which it operates. This includes but is not limited to ensuring compliance with rules relating to forced and child labour use and guaranteeing, for example, that its products are safe to use. The directors understand that reputational damage is a significant risk to the Group and strive to ensure that the policies and practices to avoid and mitigate this risk are of the highest standard.
The Group also takes the need to pay its suppliers on time very seriously to maintain its standing in the industry.
 
- 4 -

 
KANDY WORKS PROPERTIES LIMITED
 

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

(f)  The need to act fairly between members of the Group:
The directors know that the Group needs to consider the interests of its members equally. It also recognises that there will be occasions when members' interests are in conflict and that any contest should be resolved to balance those competing interests. Member views are sought if such a situation arises. Any decision taken is documented and explained in an open and accountable way so that all the members can see what actions were taken to reach a settlement.


This report was approved by the board on 23 December 2024 and signed on its behalf.





D T Abbott
Director

- 5 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024

The directors present their report and the financial statements for the year ended 30 June 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


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

make judgements and accounting estimates that are reasonable and prudent;

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

Results and dividends

The loss for the year, after taxation, amounted to £1,446,745 (2023 - profit £1,544,341).

Dividends of £Nil (2023: £2,000,000) were paid to ordinary shareholders during the year.
Going concern
The directors have considered the use of the going concern assumption appropriate in preparing these financial statements, including an exercise on the impairment of fixed assets and have not identified any factors that may give rise to uncertainty over the Group's ability to continue as a going concern.
Despite reduced Sales within the year, the gross margin has improved alongside reduced marketing costs and efficiencies in the cost of taking and dispatching of orders.
The Group continues to have a strong net current asset position at £11m (2023: £12m) and net asset position of £15m (2023: £17m). 
The Group’s healthy cash balance at the year-end gives it strength and flexibility, particularly in buying decisions. This, along with the other factors included within the Business Review and Future Developments section of the Strategic Report, supports the director's assessment that no factors give rise to a material uncertainty over the going concern assumption.

- 6 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024


Directors

The directors who served during the year were:

D T Abbott 
S F Brown 

Qualifying third party indemnity provisions

The Group has made qualifying third-party indemnity provisions for the benefit of its Directors which were made during the year and remain in force at the date of this Annual Report.

Greenhouse gas emissions, energy consumption and energy efficiency action

The Group is required to report its annual greenhouse gas emissions pursuant to the (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 ("Regulations"). The 2018 regulations, known as Streamlined Energy and Carbon Reporting (SECR) came into effect on 1 April 2019 and the Group is required to report the emissions and energy consumption for this year to 30 June 2024 to coincide with the financial reporting period.

Following the location-based methodology, 429,888 kWh (2023: 400,727 kWh) of scope 2 energy and 222,759 kWh (2023: 215,120 kWh) of scope 1 natural gas has been consumed in relation to the Group's UK premises, resulting in 129,751 kgCO2e (2023: 122,332 kgCO2e). In addition, under scope 1, the energy consumption of 35,426 kgCO2e (2023: 38,126 kgCO2) resulted from transport usage. During the year, no specific steps were taken to lower energy consumption.

Emissions per employee have been considered to be an appropriate intensity ratio - average emissions per employee for the year were 913 kgCO2e (2023: 877 kgCO2e), and the Group aims to lower this where possible in future.

Matters covered in the Group Strategic Report

Certain information is not shown in the Directors’ Report is shown in the Strategic Report instead in accordance with Section 414C (11) of the Companies Act 2006. The Strategic Report includes a business review, future developments and information on the Group's key performance indicators.

- 7 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024


Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

the director 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 auditor is aware of that information.

Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 23 December 2024 and signed on its behalf.
 





D T Abbott
Director

- 8 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KANDY WORKS PROPERTIES LIMITED
 

Opinion

We have audited the consolidated financial statements of Kandy Works Properties Limited (the ‘Parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Changes in Equity, Consolidated Statement of Cashflows and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 Parent Company’s affairs as at 30 June 2024 and of the Group's loss 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 Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group's and Parent Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the consolidated financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the consolidated 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 nor Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the consolidated 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 consolidated 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 consolidated 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.
- 9 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KANDY WORKS PROPERTIES LIMITED
 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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 consolidated financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:
 
the information given in the Group Strategic Report and the Directors' Report for the financial year for which the consolidated financial statements are prepared is consistent with the consolidated financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

- 10 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KANDY WORKS PROPERTIES LIMITED
 

Responsibilities of Directors

As explained more fully in the Directors' Responsibilities Statement set out on page 6, the directors are responsible for the preparation of the consolidated 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group's and 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 directors intend either to liquidate the Group or Parent 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 consolidated 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 consolidated financial statements.
 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
 
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. 

Based on our understanding of the Group and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the consolidated financial statements: employment regulation, health and safety regulation and anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the Group is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the Group which were contrary to applicable laws and regulations, including fraud.  

We also considered those laws and regulations that have a direct effect on the preparation of the consolidated financial statements, such as tax legislation, pension legislation, the Companies Act 2006. 
- 11 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KANDY WORKS PROPERTIES LIMITED
 

In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the consolidated financial statements, including the risk of override of controls, and determined that the principal risks were related to  posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut off assertion) and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

A further description of our responsibilities for the audit of the consolidated financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of the audit 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.




Shaun Mullins (Senior Statutory Auditor)

  
for and on behalf of

Forvis Mazars LLP
Chartered Accountants and Statutory Auditor 
5th Floor
3 Wellington Place
Leeds
LS1 4AP

23 December 2024
- 12 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024

2024
2023
Note
 £
£

  

Turnover
 4 
40,570,491
48,296,603

Cost of sales
  
(16,217,375)
(19,933,077)

Gross profit
  
24,353,116
28,363,526

Distribution costs
  
(1,979,894)
(2,730,265)

Administrative expenses
  
(24,246,461)
(23,781,674)

Operating (loss)/profit
 5 
(1,873,239)
1,851,587

Interest receivable and similar income
 9 
220,112
109,216

(Loss)/profit before tax
  
(1,653,127)
1,960,803

Tax on (loss)/profit
 10 
206,382
(416,462)

(Loss)/profit for the financial year
  
(1,446,745)
1,544,341

  

There were no recognised gains and losses for 2024 or 2023 other than those included in the consolidated statement of comprehensive income.

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

The notes on pages 19 to 38 form part of these financial statements.

EBITDA for the current year was £(1,086,604) (2023: £2,365,638).

- 13 -

 
KANDY WORKS PROPERTIES LIMITED
REGISTERED NUMBER: 12913500

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 12 
4,438,362
4,686,493

  
4,438,362
4,686,493

Current assets
  

Stocks
 14 
5,322,159
7,524,520

Debtors: amounts falling due within one year
 15 
4,080,757
4,553,084

Cash at bank and in hand
 16 
7,383,197
7,282,868

  
16,786,113
19,360,472

Creditors: amounts falling due within one year
 17 
(5,772,544)
(7,374,332)

Net current assets
  
 
 
11,013,569
 
 
11,986,140

Total assets less current liabilities
  
15,451,931
16,672,633

Provisions for liabilities
  

Deferred taxation
 18 
(248,270)
(124,017)

Other provisions
  
(101,790)
-

Net assets
  
 
 
15,101,871
 
 
16,548,616


Capital and reserves
  

Called up share capital 
 20 
11,230
11,230

Other reserves
 21 
360,457
360,457

Profit and loss account
 21 
14,730,184
16,176,929

  
15,101,871
16,548,616


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 December 2024.




D T Abbott
Director

The notes on pages 19 to 38 form part of these financial statements.

- 14 -

 
KANDY WORKS PROPERTIES LIMITED
REGISTERED NUMBER: 12913500

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 12 
2,105,688
2,175,915

Investments
 13 
11,229
11,229

  
2,116,917
2,187,144

Current assets
  

Debtors: amounts falling due within one year
 15 
316
16,197

Cash at bank and in hand
 16 
41,760
59,438

  
42,076
75,635

Creditors: amounts falling due within one year
 17 
(2,170,327)
(2,247,399)

Net current liabilities
  
 
 
(2,128,251)
 
 
(2,171,764)

Total assets less current liabilities
  
(11,334)
15,380

Deferred taxation
 18 
(1,936)
-

  
 
 
(1,936)
 
 
-

Net (liabilities)/assets
  
(13,270)
15,380


Capital and reserves
  

Called up share capital 
 20 
11,230
11,230

Profit and loss account
 21 
(24,500)
4,150

  
(13,270)
15,380


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 loss after tax of the Parent Company for the year was £28,650 (2023 profit: £1,994,562).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 December 2024.


D T Abbott
Director

The notes on pages 19 to 38 form part of these financial statements.

- 15 -

 
KANDY WORKS PROPERTIES 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
11,230
360,457
16,632,588
17,004,275


Comprehensive income for the year

Profit for the year
-
-
1,544,341
1,544,341
Total comprehensive income for the year
-
-
1,544,341
1,544,341


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(2,000,000)
(2,000,000)


Total transactions with owners
-
-
(2,000,000)
(2,000,000)



At 1 July 2023
11,230
360,457
16,176,929
16,548,616


Comprehensive expense for the year

Loss for the year
-
-
(1,446,745)
(1,446,745)
Total comprehensive expense for the year
-
-
(1,446,745)
(1,446,745)


At 30 June 2024
11,230
360,457
14,730,184
15,101,871


- 16 -

 
KANDY WORKS PROPERTIES LIMITED
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 July 2022
11,230
9,588
20,818


Comprehensive income for the year

Profit for the year
-
1,994,562
1,994,562
Total comprehensive income for the year
-
1,994,562
1,994,562


Contributions by and distributions to owners

Dividends: Equity capital
-
(2,000,000)
(2,000,000)


Total transactions with owners
-
(2,000,000)
(2,000,000)



At 1 July 2023
11,230
4,150
15,380


Comprehensive expense for the year

Loss for the year
-
(28,650)
(28,650)
Total comprehensive expense for the year
-
(28,650)
(28,650)


At 30 June 2024
11,230
(24,500)
(13,270)


The notes on pages 19 to 38 form part of these financial statements.

- 17 -

 
KANDY WORKS PROPERTIES LIMITED
 

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

2024
2023
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(1,446,745)
1,544,341

Adjustments for:

Depreciation of tangible assets
786,635
514,051

Impairments of fixed assets
254,040
-

Interest received
(220,112)
(109,216)

Taxation charge
(206,382)
416,462

Decrease in stocks
2,202,361
1,315,194

Decrease/(increase) in debtors
999,757
(37,994)

(Decrease) in creditors
(1,403,292)
(1,978,831)

Increase in provisions
101,790
-

Corporation tax (paid)
(395,291)
(701,792)

Net cash generated from operating activities

672,761
962,215

Cash flows from investing activities

Purchase of tangible fixed assets
(792,544)
(1,956,847)

Interest received
220,112
109,216

Net cash from investing activities

(572,432)
(1,847,631)

Cash flows from financing activities

Dividends paid
-
(2,000,000)

Net cash used in financing activities
-
(2,000,000)

Net increase/(decrease) in cash and cash equivalents
100,329
(2,885,416)

Cash and cash equivalents at beginning of year
7,282,868
10,168,284

Cash and cash equivalents at the end of year
7,383,197
7,282,868


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
7,383,197
7,282,868


- 18 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

1.


General information

Kandy Works Properties Limited ("the Company") is a privately owned company, limited by shares, and incorporated in England and Wales. The Company's registration number is 12913500. The address of its registered office and principal place of business is Kandy Works, Brown Lane East, Leeds, West Yorkshire LS11 0BT.
The principal activity of the Company is that of a holding company. 
The principal activity of the Group is that of the sale of women's clothing, men's clothing, homeware and accessories under the Joe Browns brand via a mail order catalogue, its website and stores. The Group also operates a wholesale division which sells to a variety of other businesses ranging from public limited companies to small owner managed retail stores.

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 judgement 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.

- 19 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.3

Going concern

The directors have considered the use of the going concern assumption appropriate in preparing these financial statements, including an exercise on the impairment of fixed assets and have not identified any factors that may give rise to uncertainty over the Group's ability to continue as a going concern.
Despite reduced Sales within the year, the gross margin has improved alongside reduced marketing costs and efficiencies in the cost of taking and dispatching of orders.
The Group continues to have a strong net current asset position at £11m (2023: £12m) and net asset position of £15m (2023: £17m). 
The Group’s healthy cash balance at the year-end gives it strength and flexibility, particularly in buying decisions. This, along with the other factors included within the Business Review and Future Developments section of the Strategic Report, supports the director's assessment that no factors give rise to a material uncertainty over the going concern assumption.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP, rounded to the nearest £1.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

- 20 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.5

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.

Royalty income
Royalty income is recognised on an accruals basis in accordance with the substance of the agreements in place.
Rental income
The Company receives rental income. This income is recognised in the Statement of Comprehensive Income on a straight line basis as the provision of rental space is provided.

 
2.6

Operating leases: the Group as lessee

Payments under operating leases relate to the leases undertaken in respect of the three retail stores.

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

- 21 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.8

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss 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 income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting 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 reporting 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 reporting date.

- 22 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.10

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
40 years
Long-term leasehold property
-
10% per annum
Motor vehicles
-
33% per annum
Fixtures and fittings
-
15% per annum
Computer equipment
-
33% per annum

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 profit or loss.

 
2.11

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

- 23 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.14

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.

 
2.15

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.

 
2.16

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.

 
2.17

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 profit or loss.

 
2.18

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

- 24 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)


2.18
Financial instruments (continued)

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

- 25 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)


2.18
Financial instruments (continued)

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method, discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

 
2.19

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.

- 26 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In applying the Company and the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors’ judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectively involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
Critical judgements in applying the accounting policies
The critical judgements that the directors have made in the process of applying the Company and the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements are discussed below:
Stock provision
The Group estimates any required impairment to the carrying value of stock by assessing the amount and value of obsolete and slow-moving stock, using their judgement of the future sales value generated by those stock items. Refer to Note 14 for details of impairment losses recognised in stock.
Other sources of estimation uncertainty
Other sources of estimation uncertainty, that are not considered to give rise to an increased risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Royalty income recognition 
The Group received royalty income over a period that is not co-terminus with the reporting date. For these periods the Group estimates whether the Group will achieve their targets that generate the royalties and the amount of income that should be recognised, using their judgement based on historical performance.
Determining residual values and useful economic lives of tangible assets
The Group depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of tangible assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied. Judgement is also applied when determining the residual values for fixed assets. When determining the residual value, the directors have assessed the amount that the Group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.

- 27 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Sale of goods
38,274,676
45,809,227

Royalties
2,295,815
2,487,376

40,570,491
48,296,603


Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
39,558,937
47,277,178

Rest of Europe
956,303
959,004

Rest of the world
55,251
60,421

40,570,491
48,296,603



5.


Operating (loss)/profit

The operating profit is stated after charging/(crediting):

2024
2023
£
£

Depreciation of tangible fixed assets
786,635
514,051

Exchange differences
(16,730)
(18,532)

Other operating lease rentals
763,462
677,603

- 28 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

6.


Auditor's remuneration

During the year, the Group obtained the following services from the Company's auditor:


2024
2023
£
£

Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
49,000
44,950

Fees payable to the Company's auditor in respect of:

Taxation compliance services
8,150
7,600

Other non-audit services
7,850
7,450


7.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
2024
2023
£
£


Wages and salaries
5,940,167
5,478,282

Social security costs
594,928
519,460

Cost of defined contribution scheme
109,382
100,638

6,644,477
6,098,380

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


        2024
        2023
            No.
            No.







Selling, distribution and office
143
143



Warehouse
38
42

181
185

The Company has no employees other than the director, who did not receive any remuneration (2023 - £NIL)
- 29 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
279,218
278,766

Group contributions to defined contribution pension schemes
1,321
1,321

280,539
280,087


During the year retirement benefits were accruing to 1 director (2023 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £149,726 (2023 - £155,793).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2023 - £NIL).


9.


Interest receivable

2024
2023
£
£


Other interest receivable
220,112
109,216


10.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
5,501
439,152

Adjustments in respect of previous periods
(336,136)
(67,254)

(330,635)
371,898


Deferred tax


Origination and reversal of timing differences
109,402
392,163

Adjustment to tax charge in respect of previous periods
14,851
(347,599)

Total deferred tax
124,253
44,564


Taxation on (loss)/profit on ordinary activities
(206,382)
416,462
- 30 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 20.5%). The differences are explained below:

2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(1,653,127)
1,960,803


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 20.5%)
(413,282)
401,965

Effects of:


Expenses not deductible for tax purposes
68,836
(15,161)

Fixed asset differences
126,264
8,130

Adjustments to tax charge in respect of prior periods
(336,136)
(67,254)

Adjustment to tax charge in respect of prior periods - deferred tax
14,851
(347,599)

Remeasurement of deferred tax for changes in tax rates
-
(9,885)

Movement in deferred tax not recognised
-
448,849

Losses carried back
333,085
-

Other differences leading to an increase (decrease) in the tax charge
-
(2,241)

Marginal relief
-
(342)

Total tax charge for the year
(206,382)
416,462


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


11.


Dividends

2024
2023
£
£


Dividends declared on Ordinary shares
-
1,515,760


Dividends declared on Ordinary A shares
-
484,240

-
2,000,000

- 31 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

12.


Tangible fixed assets

Group






Freehold property
Leasehold property
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£
£



Cost


At 1 July 2023
3,393,457
1,666,417
24,830
1,502,820
2,102,624
8,690,148


Additions
-
33,150
-
288,524
470,870
792,544



At 30 June 2024

3,393,457
1,699,567
24,830
1,791,344
2,573,494
9,482,692



Depreciation


At 1 July 2023
1,217,542
40,635
24,830
1,123,500
1,597,148
4,003,655


Charge for the year
70,227
169,032
-
191,524
355,852
786,635


Impairment charge
-
-
-
217,970
36,070
254,040



At 30 June 2024

1,287,769
209,667
24,830
1,532,994
1,989,070
5,044,330



Net book value



At 30 June 2024
2,105,688
1,489,900
-
258,350
584,424
4,438,362



At 30 June 2023
2,175,915
1,625,782
-
379,320
505,476
4,686,493

- 32 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

           12.Tangible fixed assets (continued)


Company






Freehold property

£

Cost


At 1 July 2023
3,393,457



At 30 June 2024

3,393,457



Depreciation


At 1 July 2023
1,217,542


Charge for the year
70,227



At 30 June 2024

1,287,769



Net book value



At 30 June 2024
2,105,688



At 30 June 2023
2,175,915






- 33 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 July 2023
11,229



At 30 June 2024
11,229





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Joe Browns Limited
Kandy Works, Brown Lane East, Leeds, West Yorkshire, LS11 0BT
Ordinary
100%


14.


Stocks

Group
Group
2024
2023
£
£

Goods for resale
5,322,159
7,524,520


During the year, a reversal of impairment of £50,263 (2023: £79,286) was recognised within cost of sales in the Statement of Comprehensive Income.

- 34 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

15.


Debtors

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


Trade debtors
1,621,006
1,891,656
-
4,801

Other debtors
5,317
6,040
316
1,040

Prepayments and accrued income
1,927,004
2,655,388
-
-

Tax recoverable
527,430
-
-
-

Deferred taxation
-
-
-
10,356

4,080,757
4,553,084
316
16,197



16.


Cash and cash equivalents

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

Cash at bank and in hand
7,383,197
7,282,868
41,760
59,438



17.


Creditors: Amounts falling due within one year

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

Trade creditors
3,738,991
4,448,646
-
-

Amounts owed to group undertakings
-
-
2,159,939
2,231,939

Corporation tax
-
198,496
-
7,460

Other taxation and social security
884,544
1,156,256
-
-

Other creditors
37,601
50,211
-
-

Accruals and deferred income
1,111,408
1,520,723
10,388
8,000

5,772,544
7,374,332
2,170,327
2,247,399


Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

- 35 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

18.


Deferred taxation


Group



2024
2023


£

£






At beginning of year
(124,017)
(79,453)


Charged to profit or loss
(124,253)
(44,564)



At end of year
(248,270)
(124,017)

Company


2024
2023


£

£






At beginning of year
10,356
-


Charged to profit or loss
(12,292)
10,356



At end of year
(1,936)
10,356

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

Accelerated capital allowances
253,518
157,283
1,936
(10,356)

Tax losses carried forward
(5,248)
(33,266)
-
-

(248,270)
(124,017)
(1,936)
10,356


19.


Provisions


Group



Dilapidation provision

£





Charged to profit or loss
101,790



At 30 June 2024
101,790

- 36 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

20.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



8,511 (2023 - 8,511) Ordinary shares of £1.00 each
8,511
8,511
2,719 (2023 - 2,719) Ordinary A shares of £1.00 each
2,719
2,719

11,230

11,230

During the year, the Ordinary A shares were renamed to Ordinary shares.
All shares have equal voting rights and dividend rights in accordance with the Articles of Association.



21.


Reserves

Merger reserve

The merger reserve represents the cumulative reserve movement arising from business combinations.

Profit and loss account

The profit and loss account represents cumulative profits or losses net of dividends paid and other adjustments.

22.


Analysis of net funds




At 1 July 2023
Cash flows
At 30 June 2024
£

£

£

Cash at bank and in hand

7,282,868

100,329

7,383,197



23.


Share-based payments

In the year to 30 June 2023 the Company issued 463 B ordinary shares at an exercise price of £408 per share. In the current year the Company did not issue any additional share options and no existing share options were exercised. The options can only be excercised on an exit event.


24.


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 £109,382 (2023: £100,638). Contributions totalling £20,993 (2023: £19,389) were payable to the fund at the reporting date and are included in creditors.

- 37 -

 
KANDY WORKS PROPERTIES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

25.


Commitments under operating leases

At 30 June 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2024
2023
£
£

Not later than 1 year
719,110
525,360

Later than 1 year and not later than 5 years
1,728,333
1,393,333

Later than 5 years
1,017,188
-

3,464,631
1,918,693

26.


Related party transactions

The Group has taken advantage of the exemption conferred by FRS 102 Section 33 not to disclose transactions with wholly owned members of the Group.
During the year services were provided to the Group by a related party of £22,500 (2023: £16,288). The amount payable at the year end was £Nil (2023: £4,350).
During the year services were provided to the Group by key management personnel of £47,808 (2023: £Nil). The amount payable as at the year end was £5,702 (2023: £Nil).
The directors received dividends from the Company in aggregate on the same terms as other shareholders of £Nil (2023: £338,915).


27.


Controlling party

As at 30 June 2024, S F Brown is no longer the ultimate controlling party. As at the date of approval of these financial statements, the directors do not believe there is a single ultimate controlling party.

- 38 -