The directors present the strategic report for the year ended 30 June 2024.
The principal activity of the company is that of a holding company.
The principal activity of the subsidiary companies are:
Wholesalers of optical and sunglasses cases
Design, manufacture and distributor of optical and sunglasses frames.
Manufacturers and wholesalers of optical lenses.
Provision of distribution, consultancy and design services to the optical industry
Manufacturers and wholesalers of jewellery and gift packaging.
The principal business activity is the design, manufacture and distribution of optical and sunglass frames, cases, and lenses. The Group has trading subsidiaries in the United Kingdom (UK), Germany, Hong Kong and the United States of America (USA).
The actions taken in the previous financial year in response to the cost-of-living pressures has resulted in a significant performance improvement during the current financial year. This trend is forecast to continue into the next financial year with further growth expected for the year ending 30 June 2025.
Significant new business was secured during the current financial year resulting in 3.6% sales growth. Gross profit margins increased by 2% with a continued focus on supply chain management and the product mix being weighted toward higher end products. Sterling strengthened against the Dollar during the current financial year contributing to improved gross profit.
Germany achieved year on year sales growth following on from the growth achieved in the previous financial year.
Hong Kong sales increased year on year as business won in the previous year crystalised.
Trading in the USA also grew as the Group increased its product offering during the current financial year.
The board are pleased with the results for the current financial year because of the actions taken in the previous financial year with results representing a significant improvement. The results ensure that the Group is well placed to take advantage of new opportunities as they arise and as a result growth is forecast for the next financial year.
The directors constantly monitor the Group's funding position and forecast cash requirements, as detailed within the Going Concern section of note 1, to ensure it has access to sufficient funds to meet its cash requirements.
The Group's operations expose it to a variety of financial risks, the Directors deem the most significant risks as follows:
Competitive risks: The Group operates in a highly competitive market alongside many businesses. The Group remains ahead of the latest industry developments and maintains a leading position in many of the markets it operates in.
Credit risks: The Group's credit risk is primarily from its trade debtors. However, these are well spread and appropriate credit checks are performed before large contracts are entered in to. The Group also insures many of the larger debts against default.
Liquidity risk: The Group actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the Group has sufficient funds available for its plans.
Foreign currency risks: The Group trades on a global basis and mitigates this risk with a mixture of forward contracts, which are reviewed on a periodic basis.
The operating profit for the period is £1,131,342 (2023: £215,888) and when adjusted for exchange variances deriving from conversion of foreign currency is £1,016,860 (2023: £303,858).
Financial Highlights:
The Group’s operating profit improved significantly due to new business won and because of the actions taken during the previous financial year ensuring stringent cost controls.
Fixed assets have decreased to £2,671,029 (2023: £3,317,984) as significant investment was made in the previous year so limited investment was required in the current year. A further years amortisation of goodwill has also been recognised. Stock levels decreased to £5,093,875 (2023: £6,437,921) as global freight disruption reduced, enabling us to reduce contingency stock levels. There has been a decrease in debtors to £3,346,855 (2023: £3,539,851) due mainly to the timing of revenue recognised and a corporation tax debtor was reduced. There has been a decrease in current liabilities to £8,601,532 (2023: £9,468,854), due to a reduced utilisation of shorter-term financing facilities because of longer-term financing secured via funding received from directors. Trade Creditors also reduced due to timing of supplier invoices.
Creditors falling due after more than one year decreased to £1,149,973 (2023: £2,132,577) because of capital repayments made against bank loans and finance leases.
The Directors use a number of key performance indicators to ensure that business activities are monitored and controlled effectively. The Directors consider these measures ensure a high level of control over the Group's operations and form an integral part of the Group's financial reporting structure.
The Group has a highly regarded reputation in both domestic and global markets as one of the leading independent Suppliers of high-quality eyewear and eyewear related optical products.
The long-term business objectives of the Group are:
Organic growth
Acquisition-based growth strategy
Strong cash generation
Continued investment in research and development
Investment in the Group’s brands
Switch to sustainable products and reducing its carbon footprint.
The Group is a certified B Corp, an accreditation that reinforces the Group's ongoing commitment to continually improve its social and environmental impact. The Group's latest annual mission statement can be found on its website, www.millmeadopticalgroup.com.
As a result of the action taken by the board during the previous financial year along with new business won, the results for the current financial year show a significant improvement in trading. The upturn in performance has continued into the year ending 30 June 2025 with the Group forecasting to achieve year on year sales growth.
As a result of previous investments, the Group is well positioned to take advantage of new opportunities with the view to further improving the trading results in future periods. An acquisition of the trade and assets of an optical case competitor was completed during the current financial year which has aided sales growth and will continue to do so in future years whilst also increasing market share.
The Board continue to investigate potential new products via collaboration with third parties and via internal research and development. The Group remains determined to grow its sales and has invested in its sales team in the second half of the current financial year with the aim of growing sales organically. The Board will continue to assess potential acquisition opportunities as they arise to ensure they add maximum value.
The Directors believe the Group has created a robust and long-term sustainable platform to deliver its long-term growth strategy. This is further backed by the Group's ability to navigate external challenges in recent years and ensure that it is still able to take advantage of opportunities as they arise.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
On 27 November 2024, after the balance sheet date, Millmead Optical Group Ltd entered into significant new lease agreement for a business premesis. The minimum contractual commitment of this lease is 5 years and a total of £2,172,875 is payable over this time period. This is not reflected in the notes to the financial statements regarding operating lease commitments at the balance sheet date.
On 2 July 2024, the Group acquired intellectual property rights, domain names and social media accounts from Unique Brands International (an unincorporated entity controlled by the directors D M Thorn and J G Conway) for consideration of £569,952. On 29 October 2024, the Group then acquired further business goodwill and intellectual property rights from Unique Brands International for consideration of £2,175,821.
There have been no further post balance sheet events since the year end.
MHA were appointed as 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.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principal risks and uncertainties and future developments.
We have audited the financial statements of Millmead Optical Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management about any known or suspected instances of fraud and non-compliance with laws and regulations;
Auditing the risk of fraud in revenue, including through the testing of the cut off of income at the year end and sales transaction testing to ensure revenue is complete in the financial statements and recognised in the correct accounting period;
Challenging the assumptions and judgements made by management in their accounting estimates;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls; and
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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.
The notes on pages 16 to 38 form part of these financial statements.
The notes on pages 16 to 38 form part of these financial statements.
The notes on pages 16 to 38 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £678,845 (2023 - £629,989 profit).
The notes on pages 16 to 38 form part of these financial statements.
The notes on pages 16 to 38 form part of these financial statements.
The notes on pages 16 to 38 form part of these financial statements.
Millmead Optical Group Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 83 Sefton Lane, Maghull, Liverpool, L31 8BU.
The group consists of Millmead Optical Group Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Millmead Optical Group Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The Group monitors its funding position and its liquidity risk throughout the year to ensure it has access to sufficient funds to meet forecast cash requirements. Cash forecasts are regularly produced and reviewed by the Board to ensure the Group can honour its cash commitments.
Forecasts have been prepared by the Directors that have been sensitised to only include known new business and incorporate all known/expected increases in its cost base. The forecasts demonstrate that the Group will have sufficient cash reserves to meet its obligations as they fall due for a period of at least 12 months from the date of signing these financial statements.
The Group achieved sales growth on improved margins with further growth forecast for the next financial year which should generate increased cash inflows from operating activities for the year ending 30 June 2025, supported by new business won during the current financial year and post year end.
As a result of the Groups financing arrangements, it must comply with financial covenants set by its bankers. During the current financial year, the Group was fully compliant, and forecasts anticipate the Group to be compliant during the next financial year.
As such, the directors are satisfied that the Group has adequate resources to operate for the foreseeable future. For this reason, they continue to adopt the going concern basis for preparing these financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
All financial assets are considered basic 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
All financial liabilities are considered basic financial liabilities.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability js measured at fair value. the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or tosses on non-monetary items recognised in other comprehensive income, When the related translation gain or loss is also recognised in other comprehensive income.
Assets and liabilities of overseas subsidiaries (including goodwill and fair value adjustments in relation to
overseas subsidiaries) are translated into the group's presentation currency at the rate ruling at the reporting date. Income and expenses of overseas subsidiaries are translated at the average rate for the year as the directors consider this to be a reasonable approximation to the rate at the date of the transaction. Translation differences are recognised in other comprehensive income and accumulated in equity
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The Directors must consider the carrying value of investments in subsidiary companies based on the performance of each subsidiary. The nature of the judgement will impact whether or not there is deemed to be any indicators of impairment, which could materially impact the carrying value of those investments.
The Directors must consider the recoverable amount of goodwill and make judgements as to whether there are any indicators of impairment. An indicator could result in a material impact on the figures in the financial statements.
The Directors must consider the performance of entities within the group to assess whether intra-group balances are considered recoverable. The outcome of the judgement could have a material impact on the financial statements in the instance that group balances are not deemed recoverable.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stocks are valued at the lower of cost and net realisable value. Where necessary, provisions for slow moving and obsolete stocks are made. Calculation of these provisions require judgements to be made, the provisions are based on both the age and use of stock in the last 24 – 60 months, with provision made as a percentage of these values. Furthermore, the valuation of stock includes the absorption of overheads such as freight and duties to accordingly reflect the cost of acquiring stocks for resale. The Directors use estimation techniques to assess the value of overheads based upon historical average annual costs of freight and duties as a percentage of total stock purchases.
The company establishes a specific provision for debtors that are estimated not to be recoverable. When assessing recoverability, the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
On 1 April 2023 the government enacted changes to the corporation tax rate, increasing the main tax rate to 25%. The previous financial year end straddled two tax years, pre and post the increase of corporation tax to 25%. Profits were apportioned in the ratio to account for the number of months under the 19% taxation rate and 25% rate. The effective tax rate for the period ended 30 June 2023 was therefore 20.50%.
Deferred tax is not recognised in respect of tax losses of £2,984,686 (2023: £3,792,572) as it is not probable that they will be recovered in full against the reversal of deferred tax liabilities or future taxable profits over the next 12 months. The directors continue to monitor this situation annually and aim to make a provision for the deferred tax asset on unutilised losses as soon as the period in which future taxable profits can be measured more accurately.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The assets under finance leases owed by Millmead Optical Group Ltd were originally acquired and continue to be capitalised by the subsidiary company The Optoplast Actman Eyewear Co Limited. The differing ownership and financing of these assets has no impact on the group consolidated financial statements, as The Optoplast Actman Eyewear Co Limited is a wholly-owned subsidiary, under the control of the same beneficial owners.
Details of the company's subsidiaries at 30 June 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
An increase has been made against the group stock provision resulting in a debit to the Statement of Comprehensive Income of £150,380 (2023: £285,389)
Amounts owed to the company by group undertakings due in less than one year are interest free and are unsecured, repayable on demand.
There has been a decrease in the group provision for bad debts resulting in a credit to the Statement of Comprehensive Income of £661 (2023: £87,176) during the period.
Included within amounts owed to group undertakings by the company, are amounts owed to a subsidiary entity which accrue interest at a rate of 1% per annum. This loan is repayable on 30 June 2026, however, the subsidiary company has the right to recall this loan on giving 6 months notice and as such this balance is included within amounts due in less than one year.
All other amounts owed by the company to group undertakings are unsecured, interest free and are repayable on demand.
Details of the security and other terms of bank loans, overdrafts, other loans and finance leases are disclosed in notes 18 and 19 of the financial statements.
Details of the security and other terms of bank loans, overdrafts, other loans and finance leases are disclosed in notes 18 and 19 of the financial statements.
Bank loans and overdrafts are secured, in favour of HSBC Bank Plc by means of a fixed charge over the book debts and a floating charge over all the other assets of Millmead Optical Group Ltd and its subsidiaries.
Other loans, which include import loans and invoice discounting facilities are also secured in favour of HSBC Plc, by means of a fixed charge over the book debts and a floating charge over all the other assets of all the companies that constitute the Millmead Optical Group.
Import loans accrue interest at a rate of 2.975% over the Bank of England base rate and cover a maximum period of between 120 and 240 days.
In June 2020 the group secured a Coronavirus Business Interruption Loan ("CBIL") of £3,200,000. The loan was interest free for the first year and following this, interest is charged at 3.99% above Bank of England base rate. The first repayment was made on 4 September 2021, following which quarterly repayments of £160,000 are to be made.
The CBIL loan is subject to adjusted net cash, EBITDA and adjusted tangible net worth covenants at each balance sheet date. As reported in the prior period financial statements, bank covenant breaches were identified by the Directors in both financial year 2023 and 2022. These breaches were formally waived by the bank who confirmed that no action would be taken as a result of the breaches.
On 7 October 2024, a revised CBIL loan agreement was signed, amending the bank covenants and adjusting the interest rate to 3.5% above Bank of England base rate. Quarterly payments of £160,000 continue to be made by the group under the new agreement. No further breaches under the old or recently amended covenants have been identified by the Directors as at 30 June 2024.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The interest rates implicit in the leases range between 3-4%.
The leases are secured against the assets to which they relate and which are owned under the name of the wholly owned subsidiary The Optoplast Actman Eyewear Co Limited, as detailed in note 11 of the financial statements.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset relates to both fixed asset and short term timing differences which are expected to reverse as the associated assets are utilised.
Deferred tax is not recognised in respect of tax losses of £2,984,686 (2023: £3,792,572) as it is not probable that they will be recovered in full against the reversal of deferred tax liabilities or future taxable profits over the next 12 months. The Directors continue to monitor this situation annually and aim to make a provision for the deferred tax asset on unutilised losses as soon as the period in which future taxable profits can be measured more accurately.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The ordinary A, B1 and B2 shares, which carry no fixed right to income, each carry the right to one vote at general meetings.
On 14 July 2023, Millmead Optical Group Ltd acquired 100% of the share capital on incorporation of Kirk Originals Eyewear Ltd, a company incorporated in England and Wales.
On 27 September 2023, Millmead Optical Group Ltd acquired 100% of the share capital on incorporation of Wires Eyewear Limited, a company incorporated in England and Wales.
Both of the above transactions have been accounted for under the acquisition method and both entities remain dormant from acquisition throughout the reporting period.
There is a debenture dated 6 October 2008, in favour of HSBC Bank Plc, secured by way of fixed and floating charges over all the assets of the company and its subsidiary group companies.
A charge was registered on 7 October 2022, in favour of The Conthorn Retirement Benefit Scheme, a scheme which exists for the benefit of certain directors. Secured by way of a fixed charge over the Chattels of the company.
There is an unlimited composite company guarantee dated 6 October 2008 across all companies in the Millmead Optical Group over all bank borrowings. The total amount outstanding in relation to the associated group banking facilities at the year end was £4,336,696 (2023: £6,005,463).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Please see note 26 for details of a lease entered into after the balance sheet date. This lease commitment is not included in the above note to the financial statements.
On 2 July 2024, the Group acquired intellectual property rights, domain names and social media accounts from Unique Brands International (an unincorporated entity controlled by the directors D M Thorn and J G Conway) for consideration of £569,952. On 29 October 2024, the Group then acquired further business goodwill and intellectual property rights from Unique Brands International for consideration of £2,175,821.
On 27 November 2024, after the balance sheet date, Millmead Optical Group Ltd entered into a significant new lease agreement for a business premises. The minimum contractual commitment of this lease is 5 years and a total of £2,172,875 is payable over this time period.
There have been no further post balance sheet events since the year end.
During the year the group entered into the following transactions with related parties:
Royalty payments of £324,000 (2023: £270,000) have been made in the year ended 30 June 2024 in respect of patents owned by members of key management. An advance payment covering the initial period of the licence agreement was released to the statement of comprehensive income, amounting to £nil (2023: £100,000).
Included within other debtors is £6,196 (2023: £3,124) due from Conthorn, an unincorporated business owned by members of key management.
During the year £16,200 was received from Breeze International Designs Ltd, a company related through common Directors of the group, for facilitating the sale of stock to a third party company. No transactions of this nature took place in the year ended 30 June 2023.
During the year, wages and salaries of £18,000 (2023: £18,000) were paid to close family members of a Director.
The company has taken the exemption conferred by s33.1A of FRS102 from disclosing related party transactions with wholly owned members of this group, on the basis that its results are consolidated in the results of the group as a whole.
The total amount outstanding on loans received from the directors is £1,447,491 (2023: £1,074,000),which is included within other creditors note 16 of the financial statements. The loans are guaranteed by a subsidiary entity, Victoria Collection GmbH. Interest of £31,876 (2023: £32,729) has been paid by the group in relation to these loans. Interest is payable at 2.65% above the Bank of England base rate.
The directors have agreed not to call in repayment of the loans for at least 12 months from the date of signing of these financial statements.