Registered number:
FOR THE YEAR ENDED 31 JULY 2024
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY INFORMATION
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONTENTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
The Directors present their strategic report together with the Directors’ report and audited financial statements of the Company for the year ended 31 July 2024.
Principal activities The principal activity of the Company continues to be that of an independent family run retailer selling to customers through stores and online. Whilst the Company has grown, the passion and values it was founded on remain the same; we only sell products that we would be happy to take home ourselves, and work hard to ensure they are fantastic value for money.
During the financial year, the Company underwent a significant restructuring to optimise its corporate structure and enhance operational efficiency. On the 1st of August 2023, the trade and assets of our workshop operation transferred to a new company, Charlies Ag and Turf Limited.
A new holding company was established, Charlies Stores Holdings Limited, which wholly owns both Charlies Stores Limited and Charlies Ag and Turf Limited. The separation of the workshop business was important because that element of the business sells unique products and services, has its own strategic aims and ambitions, as well as specific working capital, reporting, insurance and financing needs. These specialised needs can now be more effectively serviced following the separation of the Ag and Turf business into its own legal entity, and this change also provided us with the opportunity to introduce other operational improvements for the workshop. The results for the Company are as shown in the annexed financial statements. This year’s sales were £62.3m, a £11.5m (16%) decrease on the prior year, owing to the transfer-out of the workshop business. On a like-for-like basis, sales are up £1.8m (+3%), driven by strong store sales. For our bricks and mortar stores, turnover has increased compared to the prior year. This was considered an excellent result given the strong economic headwinds that we faced, as the impact of low consumer confidence, high cost-inflation and high interest rates continued through the year. This increase in turnover in stores bucked many national retail and consumer spending trends, and is testament to the high quality of products, customer service and in-store experience that we work so hard to provide. With the dampened consumer demand in mind, this was a year of consolidation for our e-commerce business. Our focus for the year was on profitability, ensuring our operation ran efficiently and gaining a deeper understanding of how to build on this foundation for future growth. Owing to the pressures in the market, we decided to curtail our marketing spend, reducing it by around 10% but ensuring the remaining advertising spend was directed in the most effective way. So, whilst our e-commerce operation decreased its sales by £350k (-2%) to £15m, operating profit increased from a loss of £0.2m in 2023 to a profit of £0.5m in 2024. The Company remains focused on controlling overheads. Our single largest cost is that of our staff, which accounts for over half of all our operating costs. Whilst Charlies is not an accredited Real Living Wage (RLW) employer, it has for the past few years paid the then-current RLW rate to all employees over 18 years of age. The increases from £9.90 to £12.00 per hour in the last two years have therefore put significant pressure on our bottom line. We understand the importance of staffing our stores appropriately and recognise the importance of maintaining our high store and customer service levels.
Page 1
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Business review (continued)
Despite these cost increases, we were able to achieve a profit before tax of £1.74m, down just £1.3.m (43.8%) from last year. Our total inventory holding decreased following the transfer of the workshop business to Charlies Ag and Turf Limited, but additionally our gross retail-business warehouse stock has also decreased by £1.2m (7%) to £15.2m on 31 July 2024. We did not take on any additional bank borrowing this year, nor did we need to take out any government backed loans or defer rent or VAT payments. We finished the year with a cashflow surplus as a result of this. Our gross margin reduced by just one fifth of a percentage point, from 37.7% in 2023 to 37.5% this year. Our margin saw a slight reduction this year as we strategically adjusted pricing to optimise inventory levels, improve cash flow, and better align our inventory with expected future demand and goods costs. Shipping costs relating to deliveries of products have also increased due to disrupted shipping and logistics largely caused by the various conflicts around the globe.
In all business operations, risk management and process control are a priority, and the Board of Directors is ultimately responsible for considering major risks.
The following are key risks which can affect the Company’s net income: Margin Erosion We operate in an environment where pricing is transparent, and it is often easy for the customer to compare prices across different retailers. Additionally, the current global economic situation resulting in rising prices could lead to the erosion of profit margins in the short to medium term. We take a balanced approach that includes strategic pricing and a focus on maintaining strong relationships with suppliers so that we can remain competitive and protect our margins. Supply Chain The current global economic situation is impacting on the supply chain and our customers expect stock to be on hand. Charlies Stores builds strong relationships with suppliers across its large product offering to help ensure product availability. Competition in our markets Charlies Stores operates in a competitive market environment and the provision of new and great-value product ranges is key to our success. Customer care is a top priority, and Charlies Stores maintains strong relationships with customers by seeking to provide great service and responding to all customer feedback in a timely manner. Decline in customer numbers Charlies Stores is subject to fluctuations in customer numbers. We endeavour to ensure customer retention by regularly updating our product lines each season and by offering well-known branded products at competitive prices. Charlies Stores aims not only to provide good value products but also to sell a wide range of essential and staple products to ensure a strong sales foundation. The Company will continue to concentrate on its existing stores and online business and would only consider additional large format out of town stores if they were in the right position and at a realistic base rent.
Page 2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Foreign Exchange
The Company is exposed to currency transaction risk in respect of the purchases it makes in US dollars and Euros. The risk is managed by monitoring markets and where it is considered appropriate, holding cash to transact in these currencies. Interest Rates The Company has an overdraft and loan facilities and is therefore exposed to interest rate risk on these borrowings. The bank is currently satisfied with the Company’s financial performance and the Directors do not think that there is any risk of facilities being withdrawn. Sensitivity analysis has been performed by the Company and we believe that we can continue to service our debt even above the current interest rate. The below ratios are presented on a continuing activities basis where applicable.
Page 3
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
The Company uses a range of KPIs to monitor and measure performance within the business on a regular basis, at both a top-level and division or store-specific level. The KPI’s reported below cover the whole business. The Company’s KPIs cover diverse areas of the business such as wage efficiency, productivity, and energy efficiency, the latter of which has been reported in the Director’s Report.
Customer experience is important to Charlies Stores, and it is what keeps our customers coming back time and time again. We want all our customers to be delighted with all aspects of the products and service they receive from us. All website customers are sent on-line customer satisfaction surveys from Trustpilot, to voluntarily complete. Store customers are also able to leave reviews of their experiences with Charlies Stores via that same platform. Reviews are scored between 1- and 5-stars, with 1 being the lowest level and 5 being the highest level of customer satisfaction. Charlies Stores strives to get everything right first time but acknowledges that occasional issues can arise. Charlies Stores is proud to have maintained a trust score of at least 4.9 for the last 4 years and works extremely hard to maintain that high level of customer satisfaction. All poor reviews are investigated or responded to, to either get a better understanding of the issue and/or to find a satisfactory resolution with the customer.
Page 4
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
The Board of Directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider would most likely be in the best interest of the Company taking into account the requirements of all stakeholders. Further information is included in the Directors’ Report.
Decision Making at the Board All matters which are reserved for decision by the Directors are presented at Board meetings. Directors are briefed on any potential impacts and risks for our customers, employees and other stakeholders including our suppliers, the community and environment and how they are to be managed. The Directors take these factors into account before making a final decision which together they believe is in the best interests of the Company. Stakeholders Our key stakeholders are our employees, who are the heart of our purpose and work in service of our customers. We are focused on responding to the needs of, and building long term relationships with, our customers. Other key stakeholders are the producers and suppliers from whom we purchase goods and services, and the communities in which we operate. Long term sustainability We aim to make sufficient profits to sustain the Company’s commercial viability. This is balanced against the needs of our customers, employees and other stakeholders and the community to ensure we are conducting all our business relationships with integrity. The long-term sustainability of the Company is at the forefront of decision making, particularly in response to the challenging economic conditions in retail following the Coronavirus pandemic. Employees Our team members are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach to the pay and benefits our team members receive. The health, safety and wellbeing of our team members is one of our primary considerations in the way we do business, and the business is a member of the Retail Trust, which helps us further promote employee health and wellbeing and to further assist the local managers in supporting staff in this area. They support our colleagues with wellbeing support, counselling services and financial aid grants as needs arise. It is widely reported that the number and severity of customer abuse and theft incidents has increased, particularly in retail, since the end of the coronavirus pandemic. Unfortunately, we have not been immune to these challenges. In response, we now offer more of our staff the option of wearing a body camera, providing them with an added sense of security and peace of mind while working in store. The Company supports it employees to ensure they understand the Company’s objectives and goals and how they can assist the delivery of this. The Company invests in high levels of employee engagement to enable us to retain, develop and acquire the talent required to continue to grow and remain successful. The Company’s policy is to consult and discuss with employees at meetings those issues most likely to affect employees’ interests. Information on matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the operational, financial and economic factors affecting the Company’s performance. Charlies Gender Pay Gap report can be accessed via our web site: www.charlies.co.uk. As a Company we are committed to improving all diversity, not just diversity of gender.
Page 5
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Customers and suppliers
Engagement with suppliers and customers is key to our success. Customer experience is important to Charlies Stores, and it is what keeps our customers coming back time and time again. All website customers are sent on-line customer satisfaction surveys from Trustpilot, to voluntarily complete. All poor reviews are investigated or responded to, to either get a better understanding of the issue and/or to find a satisfactory resolution with the customer. We work closely with our supply chain and take the appropriate action, when necessary, to prevent involvement in modern slavery, corruption, bribery, and breaches of competition law. We recognise that our biggest exposure to Modern Slavery is in our product supply chain. Charlies Stores stocks predominately third-party brands, and last year we began requiring our suppliers to accept our Modern Slavery Policy at trading agreement stage, which states that they must provide employees with good working conditions, reasonable pay and to fully comply with all applicable laws and to provide evidence of factory audits and standards compliance. Other third parties that are of great importance to Charlies Stores include our professional advisers, bankers and our various regulators. Financial stakeholders The Company seeks to make information available to financial stakeholders, including our relationship bank, as part of information provided about and by the Company. Community and environment The Company takes all reasonable steps to minimise any detrimental impact that its operations may have on the environment. Directors routinely assess the impact of the Company’s operations on the community and environment and wider social responsibilities, and in particular how we comply with environmental legislation, pursue waste saving opportunities and react promptly to local community concerns. As a Board of Directors, our intention is to behave responsibly and ensure that the management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected. The intention is to nurture our reputation, through the delivery of our objectives, that reflects our responsible behaviour. Business conduct The Company aims to conduct all its business relationships with integrity and courtesy, and scrupulously to honour every business agreement.
Page 6
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
This report was approved by the board and signed on its behalf.
Page 7
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
The Directors present their report and the financial statements for the year ended 31 July 2024.
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company'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 Company 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,306,003 (2023 - £2,379,150).
The Directors have declared a dividend of £11,525,870 (2023: £NIL).
The Directors who served during the year were:
Page 8
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Charlies Stores anticipates a challenging economic climate ahead, but we remain committed to driving growth in turnover and market share throughout 2024-25. In parallel, we will focus on reviewing our pricing strategy to improve margins, while our e-commerce division builds on its solid foundation after a year of consolidation. We will continue to prioritise delivering excellent service and value by getting the basics right. At this time, there are no immediate plans to expand our brick-and-mortar stores.
Disabled employees It is our policy to give full and fair consideration to the employment of disabled persons in jobs suited to their individual circumstances and, as appropriate, to consider them for recruitment opportunities, career development and training. Where possible, arrangements are made for the continuing employment of employees who have become disabled whilst in our employment.
The Company is committed to the principle of equal opportunity in employment. Our policies for recruitment, selection, training, development and promotion are designed to ensure that no applicant or employee received less favourable treatment on the grounds of race, colour, nationality, ethnic or national origin, religion, political beliefs, disability, sex, gender or marital status. The business is committed to ensuring that all individuals are treated fairly, with respect and are valued.
Employees are regularly consulted by local managers and kept informed of matters affecting them and the overall development of the Company.
Delivering our strategy requires strong mutually beneficial relationships with suppliers and customers. We continue to strengthen supplier relationships by obtaining supplier agreements signed by both parties before placing orders and to continually improve our products and customer service.
Engagement with customers We recognise that developing a strong understanding of our customers’ needs is critical for our business strategy. Meeting customers’ needs takes many forms, including for instance providing quality products at good value prices, and providing excellent customer service. Engagement with others We aim to be a responsible member of our community and minimise our impact on the environment. Charlies Stores engages with its local communities, local government, regulators, and others to ensure it fosters positive relationships with them.
Page 9
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
The Company’s greenhouse gas emissions and energy consumption are as follows:
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2024 and 2023 UK Government’s conversion factors for company reporting. We closely monitor energy usage and ensure that infrastructure projects and the replacement of materials and systems consider energy efficiency. We are required to comply with the Governments energy assessment scheme (Energy Savings Opportunity Scheme) and have completed an energy audit to ensure our compliance with Phase III during this financial year. We will use the output from this assessment to help inform energy-efficient decisions and investments within the business. The Company’s chosen intensity measurement ratios are total gross emissions in metric tonnes CO2e per employee, and total gross emissions in metric tonnes CO2e per £100,000 turnover:
Page 10
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
There have been no significant events affecting the Company since the year end.
The auditors, WR Partners, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 11
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHARLIES STORES LIMITED
We have audited the financial statements of Charlies Stores Limited (the 'Company') for the year ended 31 July 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Page 12
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHARLIES STORES LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the 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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
Page 13
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHARLIES STORES LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the EU General Data Protection Regulation (GDPR). We understood how the Company are complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures. We also reviewed board minutes to identify any recorded instances of irregularity or non compliance that might have a material impact on the financial statements. We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cashbook reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements.
Page 14
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHARLIES STORES LIMITED (CONTINUED)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Belmont House
Shrewsbury Business Park
Shropshire
SY2 6LG
Date:
Page 15
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
Page 16
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET
AS AT 31 JULY 2024
Page 17
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET (CONTINUED)
AS AT 31 JULY 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 40 form part of these financial statements.
Page 18
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
Page 19
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
The principal activity of the Company is that of the retail of general household goods. The Company operates in the UK and is a private company limited by shares and is incorporated and domiciled in the UK. The address of its registered office is Unit 7, Offa's Dyke Business Park, Buttington, Welshpool, Powys, SY21 8SS.
2.Accounting policies
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 management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Charlies Stores Holdings Limited as at 31 July 2024 and these financial statements may be obtained from Companies House.
The Company's forecasts and projections taking account of reasonable possible changes in trading performance, show that the Company is expected to operate within the levels of its current facilities.
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing its financial statements.
Page 20
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Page 21
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Page 22
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Page 23
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the methods detailed below.
Depreciation is provided on the following basis:
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.
Page 24
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company 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 Company's Balance Sheet when the Company 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.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Page 25
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
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
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
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.
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 Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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 creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Page 26
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. In the opinion of the Directors there are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.
The whole of the turnover is attributable to retailing general household goods.
Page 27
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 28
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 29
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 30
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
12.Taxation (continued)
There were no factors that may affect future tax charges.
Page 31
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 32
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
14.Tangible fixed assets (continued)
Page 33
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 34
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
The overdraft facility and bank loans are secured with a legal charge over the leasehold property and the following freehold properties:
- Market Street and Back Lane, Newtown, Powys - Unit 2, Dyffryn Enterprise Park, Newtown, Powys - Coed-Y-Dinas Farm, Welshpool, Powys - Unit 7, Offa’s Dyke Business Park, Buttington, Welshpool, Powys The interest rates charged on the above loans are disclosed within note 21.
Page 35
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
The overdraft facility and bank loans are secured with a legal charge over the leasehold property and the following leasehold properties freehold properties:
- Market Street and Back Lane, Newtown, Powys - Unit 2, Dyffryn Enterprise Park, Newtown, Powys - Coed-Y-Dinas Farm, Welshpool, Powys - Unit 7, Offa’s Dyke Business Park, Buttington, Welshpool, Powys The interest rates charged on the above loans are disclosed within note 21.
Page 36
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 37
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Page 38
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Profit & loss account
A contingent liability exists with the parent Company, Charlies Stores Holdings Limited whereby there is a unlimited inter company composite guarantee between Charlies Stores Holdings Limited, Charlies Stores Limited and Charlies Ag & Turf Limited.
During the financial year, the Company underwent a significant restructuring to optimise its corporate structure and enhance operational efficiency. On the 1st of August 2023, the trade and assets of our workshop operation transferred to a new company, Charlies Ag and Turf Limited.
The trade and assets were transferred at net book value and therefore no gain or loss arose on disposal.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in independently administered funds. The pension cost charge represents contributions payable by the Company to the funds and amounted to £284,251 (2023: £290,465). At the year end, accrued pension contributions amounted to £11,657 (2023: £11,657). There were no prepaid contributions.
Page 39
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
There is a balance within creditors of amounts owed to directors as a result of a property transfer of £98,064 (2023: £263,632). There is a balance included within creditors of other amounts owed to directors of £2,422 (2023: £3,456).
The ultimate parent undertaking of the Company is Charlies Stores Holdings Limited, a Company which owns 100% of the issued share capital of the Company.
The ultimate controlling party is Mr C K Lloyd by virtue of his majority shareholding in Charlies Stores Holdings Limited.
Page 40
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|