Company Registration Number 14475609 (England and Wales)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2024
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
COMPANY INFORMATION
Directors
Mrs J A Simpson
Mr R Simpson
Company number
14475609
Registered office
c/o Charles Farris Limited
Quarry Fields Industrial Estate
Mere
Warminister
Wiltshire
BA12 6LA
Auditor
Alliott Wingham Limited
Kintyre House
70 High Street
Fareham
Hampshire
United Kingdom
PO16 7BB
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9 - 10
Group statement of comprehensive income
11
Group balance sheet
12 - 13
Company balance sheet
14
Group statement of changes in equity
15 - 16
Company statement of changes in equity
17
Group statement of cash flows
18
Notes to the financial statements
19 - 46
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2024
- 1 -
The directors present the strategic report for the period ended 30 April 2024.
Review of the business
Small Brown Bird Limited continued to be a holding company for a group of businesses within the candle market.
The group took this period to build upon the new group structure that was formed in the previous period and start to create synergies between the newly acquired subsidiary entities which very much remains an ongoing process. The results presented in these financial statements show a loss before taxation of continuing operations for the period of £168,303. This loss predominantly relates to one subsidiary entity and despite this, does reflect an improvement on the performance achieved in the first period to 30 November 2023.
This period also saw the closure of Walter Shearer Limited which entered into liquidation in February 2024. These results are reflected as discontinued operations.
Trading conditions in the candle market have been very difficult and the performance of the group to date has not been satisfactory.
The results in the period show a significant loss made by the trading subsidiary companies totalling £268,215 before tax. The majority of the losses have been incurred in Hayes & Finch Limited and its subsidiary, Walter Shearer Limited (£528,887). John G Rathborne Limited also showed a small loss in the period. Charles Farris Limited achieved a profit before tax of £266,714 for the period.
During the latest year, Charles Farris Limited is again forecasting to achieve a profit.
The group remained solvent at the reporting date, virtue of the net assets acquired on acquisition of the subsidiary companies.
It is expected that with additional time to build synergies through the rest of 2024 and into 2025 that results of the group will continue to reflect improvement.
The Small Brown Bird group remains one of the main players in the candle market across the UK and Ireland.
Principal risks and uncertainties
The group operations take place across the UK and Ireland. The main distribution points are in the South West of England, Liverpool, Dublin and formerly Glasgow. There are some imports and exports that take place.
These operations are subject to a number of risks. The main risks and uncertainties to this point are in relation to the UK economy and the ongoing fallout from the UK's exit from the European Union (BREXIT) as well as the impact caused by Russia's invasion of Ukraine.
The impact of BREXIT is mitigated by having a subsidiary that operates within the European Union.
The group is exposed (to a greater or lesser extent) to a variety of financial risks from its operations including price risk, exchange rate risk, credit risk and liquidity risk.
Price risk
The group has exposure to the fluctuations in the cost of bought in goods and services due to the high volume of materials used to manufacture its products. Whilst it is possible to increase the sales price of products to compensate for such an increase in cost, the company needs to remain competitive against rival suppliers to ensure it achieves a good sales volume.
Exchange rate risk
The group is exposed to changes in foreign currency exchange rates as one of the main trading companies operates out of the Republic of Ireland. Each subsidiary invoices in its local currency (GBP or Euro). However, the combination of using both these currencies to invoice in part mitigates the risk of foreign currency exchange losses.
continued...
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 2 -
Credit risk
The groups credit risk relates primarily to its trade receivables and loans to other companies under the control of the directors. The subsidiary companies contract directly with customers, which range from churches and other places of worship across the UK and Ireland to wholesalers and retailers. Credit terms offered are proportionate to the risk level attached to each customer. Due to the large number of customers, the risk of any one customer failing to pay is low.
Liquidity risk
The cash position of the group was healthy at 30 April 2024 and in fact improved since 30 November 2023, albeit this was as a result of proceeds realised on disposal of an investment property held by Hayes & Finch Limited. The individual subsidiary companies maintain their own cash positions and review their cashflow forecasts on a weekly basis to ensure it is able to meet its short term liabilities. Credit terms offered to customers are typically in line or shorter than those credit terms offered by supplies to help keep a strong working capital position. The liquidity risk is increased given the significant losses within the group. In particular within Hayes & Finch Limited.
Some external finance was provided to support working capital within Hayes & Finch Limited and Walter Shearer Limited. This was achieved a loan re-financing arrangement that took place during the period. As highlighted above, an investment property was sold as part of the loan re-financing arrangement.
Future development
It is expected that synergistic opportunities shall continue to arise out of the acquisitions made, which will drive down costs as the group now has production and distribution facilities in northern and southern England as well as in the Republic of Ireland. Pooling of resources will also help to achieve profitability for the group.
Key performance indicators
The main key performance indicators of the group are to monitor its turnover and margins. The group also monitor sales growth, as well as gross and operating profit margins, given it hopes to see synergistic benefits arising from its acquisition. Sales targets are also set within the group for both geographical areas and market sectors.
The group also monitors the working capital position by reviewing aged debtor and creditor days to ensure there is no significant deterioration in performance.
At 30 April 2024 (and 30 November 2023), the key performance indicators for the group were as follows:
2024 2023
Gross profit margin 45.6% 39.1%
Operating profit margin (5.2%) (12.5%)
Trade debtor days 30 days 52 days
Trade creditor days 78 days 79 days
Working capital ratio 1.37:1 1.64:1
Working capital, excluding stock ratio 0.57:1 0.70:1
Other performance indicators
Management also use a range of non-financial performance measures to monitor and manage the business. Included in these are:
On Time in Full: to measure whether orders are supplied in full on the promised date.
Measuring quality testing, complaints, and customer returns
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 3 -
Mr R Simpson
Director
22 April 2025
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2024
- 4 -
The directors present their annual report and financial statements for the period ended 30 April 2024.
Principal activities
The principal activity of the group was that of candle manufacturers for sale to churches and the retail market.
Branches
The group has one subsidiary operating out of Dublin, Ireland. All other operations originate out of the UK.
The parent company itself has no overseas branches.
Results and dividends
The results for the period are set out on pages 9 to 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Mrs J A Simpson
Mr R Simpson
Research and development
A small amount of research and development work has taken place within the period. This is primarily to look at new product ranges and improvement in manufacturing methods.
Future developments
As mentioned in the strategic report, the intention is to continue consolidating business activities within the group and achieve the synergistic benefits of being part of a larger group. This will be achieved through improved distribution channels, wider group interactions and other cost efficiency savings.
Auditor
The auditor, Alliott Wingham Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr R Simpson
Director
22 April 2025
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 APRIL 2024
- 5 -
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
- 6 -
Opinion
We have audited the financial statements of Small Brown Bird Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 April 2024 which comprise the group profit and loss account, 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).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 30 April 2024 and of the group's loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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 period 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.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We gained an understanding of the legal and regulatory framework applicable to the group and the industry in which it operates, and considered the risk of acts by the group that were contrary to applicable laws and regulations, including fraud. Our audit procedures were designed at Group and significant component levels to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involved deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, financial reporting legislation, the Companies Act 2006 and UK tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, review of board meeting minutes, enquiries with management, enquiries of external legal advisors and review of correspondence with external legal advisors.
There are inherent limitations in the audit procedures described above and, the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates. We addressed the risk of management override of internal controls through testing journals, in particular any entries posted with unusual account combinations or posted by senior management. We evaluated whether there was evidence of bias by the Directors in accounting estimates that represented a risk of material misstatement due to fraud. We challenged assumptions and judgements made by management in their significant accounting estimates.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
- 8 -
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.
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.
Mark Nolan FCA (Senior Statutory Auditor)
For and on behalf of Alliott Wingham Limited, Statutory Auditor
Chartered Accountants
Kintyre House
70 High Street
Fareham
Hampshire
PO16 7BB
United Kingdom
22 April 2025
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 APRIL 2024
- 9 -
Period
Period
Period
Period
ended
ended
ended
Continuing
Discontinued
30 April
Continuing
Discontinued
30 November
operations
operations
2024
operations
operations
2023
Notes
£
£
£
£
£
£
Turnover
3
4,208,464
217,343
4,425,807
5,556,669
161,212
5,717,881
Cost of sales
(2,247,557)
(161,730)
(2,409,287)
(3,187,032)
(294,401)
(3,481,433)
Gross profit
1,960,907
55,613
2,016,520
2,369,637
(133,189)
2,236,448
Distribution costs
(989,737)
(24,427)
(1,014,164)
(1,258,673)
(32,539)
(1,291,212)
Administrative expenses
(1,372,650)
(145,513)
(1,518,163)
(1,475,420)
(187,487)
(1,662,907)
Other operating income
287,649
-
287,649
2,725
-
2,725
Operating loss
4
(113,831)
(114,327)
(228,158)
(361,731)
(353,215)
(714,946)
Interest receivable and similar income
7
134,000
-
134,000
83,083
-
83,083
Interest payable and similar expenses
8
(188,912)
-
(188,912)
(132,007)
-
(132,007)
Amounts written off investments
9
-
-
-
(217)
-
(217)
Loss before taxation
(168,743)
(114,327)
(283,070)
(410,872)
(353,215)
(764,087)
Tax on loss
10
153,019
-
153,019
88,364
-
88,364
Loss for the financial period
31
(15,724)
(114,327)
(130,051)
(322,508)
(353,215)
(675,723)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP PROFIT AND LOSS ACCOUNT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
Period
Period
Period
Period
ended
ended
ended
Continuing
Discontinued
30 April
Continuing
Discontinued
30 November
operations
operations
2024
operations
operations
2023
Notes
£
£
£
£
£
£
- 10 -
Loss for the financial period is attributable to:
- Owners of the parent company
(58,560)
(580,450)
- Non-controlling interests
(71,491)
(95,273)
(130,051)
(675,723)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 APRIL 2024
- 11 -
Period
Period
ended
ended
30 April
30 November
2024
2023
£
£
Loss for the period
(130,051)
(675,723)
Other comprehensive income
Actuarial loss on defined benefit pension schemes
(3,000)
(36,000)
Currency translation loss taken to retained earnings
(8,476)
(26,536)
Cash flow hedges gain arising in the period
Tax relating to other comprehensive income
1,079
9,197
Other comprehensive income for the period
(53,339)
(17,339)
Total comprehensive income for the period
(164,448)
(693,062)
Total comprehensive income for the period is attributable to:
- Owners of the parent company
(92,754)
(597,667)
- Non-controlling interests
(71,694)
(95,395)
(164,448)
(693,062)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP BALANCE SHEET
AS AT 30 APRIL 2024
30 April 2024
- 12 -
30 April 2024
30 November 2023
Notes
£
£
£
£
Fixed assets
Goodwill
13
262,744
275,709
Negative goodwill
13
(2,132,665)
(2,227,958)
Net goodwill
(1,869,921)
(1,952,249)
Other intangible assets
13
23,718
25,307
Total intangible assets
(1,846,203)
(1,926,942)
Tangible assets
14
4,394,598
4,482,847
Investment property
15
1,465,959
845,485
Investments
16
46,428
46,428
4,060,782
3,447,818
Current assets
Stocks
18
3,518,415
3,534,251
Debtors
19
1,635,730
1,902,642
Cash at bank and in hand
858,483
705,774
6,012,628
6,142,667
Creditors: amounts falling due within one year
20
(4,390,703)
(3,750,394)
Net current assets
1,621,925
2,392,273
Total assets less current liabilities
5,682,707
5,840,091
Creditors: amounts falling due after more than one year
21
(908,032)
(845,882)
Provisions for liabilities
Deferred tax liability
24
779,775
922,861
(779,775)
(922,861)
Net assets excluding pension surplus
3,994,900
4,071,348
Defined benefit pension surplus
26
260,000
324,000
Net assets
4,254,900
4,395,348
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP BALANCE SHEET (CONTINUED)
AS AT 30 APRIL 2024
30 April 2024
30 April 2024
30 November 2023
Notes
£
£
£
£
- 13 -
Capital and reserves
Called up share capital
27
10,001
10,001
Revaluation reserve
28
(1,250)
(469)
Other reserves
4,499,337
4,499,337
Profit and loss reserves
31
(703,246)
(635,273)
Equity attributable to owners of the parent company
3,804,842
3,873,596
Non-controlling interests
450,058
521,752
Total equity
4,254,900
4,395,348
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
The financial statements were approved by the board of directors and authorised for issue on 22 April 2025 and are signed on its behalf by:
22 April 2025
Mr R Simpson
Director
Company registration number 14475609 (England and Wales)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
COMPANY BALANCE SHEET
AS AT 30 APRIL 2024
30 April 2024
- 14 -
30 April 2024
30 November 2023
Notes
£
£
£
£
Fixed assets
Investments
16
4,507,263
4,507,263
Current assets
-
-
Creditors: amounts falling due within one year
20
(21,915)
(7,500)
Net current liabilities
(21,915)
(7,500)
Net assets
4,485,348
4,499,763
Capital and reserves
Called up share capital
27
10,001
10,001
Other reserves
4,497,262
4,497,262
Profit and loss reserves
31
(21,915)
(7,500)
Total equity
4,485,348
4,499,763
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 £14,415 (2023 - £7,500 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 22 April 2025 and are signed on its behalf by:
22 April 2025
Mr R Simpson
Director
Company registration number 14475609 (England and Wales)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2024
- 15 -
Share capital
Revaluation reserve
Merger reserve
Fair value reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
£
Balance at 10 November 2022
-
-
-
-
-
Period ended 30 November 2023:
Loss for the period
-
-
-
-
(580,450)
(580,450)
(95,273)
(675,723)
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
-
-
(36,000)
(36,000)
-
(36,000)
Currency translation differences
-
-
-
-
(26,536)
(26,536)
-
(26,536)
Tax relating to other comprehensive income
-
197
-
-
9,000
9,197
-
9,197
Amounts attributable to non-controlling interests
-
-
-
-
122
122
(122)
-
Total comprehensive income
-
197
-
-
(633,864)
(633,667)
(95,395)
(729,062)
Issue of share capital
27
10,001
-
-
-
-
10,001
-
10,001
Transfers
-
(666)
-
2,075
(1,409)
-
-
-
Acquisition of subsidiary
-
-
-
-
-
-
617,147
617,147
Acquisition of subsidiaries
-
-
4,497,262
-
-
4,497,262
-
4,497,262
Balance at 30 November 2023
10,001
(469)
4,497,262
2,075
(635,273)
3,873,596
521,752
4,395,348
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
Share capital
Revaluation reserve
Merger reserve
Fair value reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
£
- 16 -
Period ended 30 April 2024:
Loss for the period
-
-
-
-
(58,560)
(58,560)
(71,491)
(130,051)
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
-
-
(3,000)
(3,000)
-
(3,000)
Currency translation differences
-
-
-
-
(8,476)
(8,476)
-
(8,476)
Tax relating to other comprehensive income
-
329
-
-
750
1,079
-
1,079
Amounts attributable to non-controlling interests
-
-
-
203
203
(203)
-
Total comprehensive income
-
329
-
-
(69,083)
(56,754)
(71,694)
(128,448)
Transfers
-
(1,110)
-
-
1,110
-
-
-
Balance at 30 April 2024
10,001
(1,250)
4,497,262
2,075
(703,246)
3,804,842
450,058
4,254,900
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2024
- 17 -
Share capital
Merger reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 10 November 2022
-
-
Period ended 30 November 2023:
Loss and total comprehensive income for the period
-
-
(7,500)
(7,500)
Issue of share capital
27
10,001
-
-
10,001
On acquisition of investments
-
4,497,262
-
4,497,262
Balance at 30 November 2023
10,001
4,497,262
(7,500)
4,499,763
Period ended 30 April 2024:
Profit and total comprehensive income
-
-
(14,415)
(14,415)
Balance at 30 April 2024
10,001
4,497,262
(21,915)
4,485,348
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 APRIL 2024
- 18 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
34
85,256
(701,001)
Interest paid
(44,926)
(57,007)
Income taxes paid
(13,208)
(44,299)
Net cash inflow/(outflow) from operating activities
27,122
(802,307)
Investing activities
Purchase of business
-
1,286,167
Purchase of intangible assets
-
(5,389)
Purchase of tangible fixed assets
(14,388)
(36,678)
Proceeds from disposal of investment property
532,480
-
Repayment of loans
-
(217)
Interest received
3,083
Net cash generated from investing activities
518,092
1,246,966
Financing activities
Proceeds from borrowings
501,000
790,000
Repayment of borrowings
(778,225)
-
Repayment of bank loans
(40,998)
(502,037)
Payment of finance leases obligations
(36,928)
(33,390)
Net cash (used in)/generated from financing activities
(355,151)
254,573
Net increase in cash and cash equivalents
190,063
699,232
Cash and cash equivalents at beginning of period
697,087
Effect of foreign exchange rates
(30,769)
(2,145)
Cash and cash equivalents at end of period
856,381
697,087
Relating to:
Cash at bank and in hand
858,483
705,774
Bank overdrafts included in creditors payable within one year
(2,102)
(8,687)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2024
- 19 -
1
Accounting policies
Company information
Small Brown Bird Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is c/o Charles Farris Limited, Quarry Fields Industrial Estate, Mere, Warminister, Wiltshire, BA12 6LA.
The group consists of Small Brown Bird Limited and all of its subsidiaries.
1.1
Reporting period
The parent company has decided to align its financial year end with its subsidiary entities. Therefore, these financial statements cover a period of 5 months. The comparative period covers the first financial statements of the group for a period of 11 months and 3 weeks.
Direct comparison is therefore not possible.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.3
Business combinations
In the parent company financial statements, investments in subsidiaries are accounted for at cost less impairment.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 20 -
1.4
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Small Brown Bird Limited 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 active subsidiaries prepare accounts to 30 April each year. In the previous period, the subsidiary companies prepared accounts covering up to 31 December 2023, 31 March 2024 and 30 April 2024. In all cases where trading activity had taken place, adjustments were made to report subsidiary results up to 30 November 2023.
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.
1.5
Going concern
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the group's ability to continue as a going concern.
The trading conditions are difficult with demand from the church market remaining below pre-pandemic levels. The group results show a significant loss incurred during the first full year of group activities. Measures are being introduced to turn results around through synergies that can be achieved from being part of a larger group. Work is also being undertaken to reduce costs and explore new opportunities for growth.
Forecasts for the next 12 months show that a loss overall will be incurred but profitability is expected in at least one of the subsidiary companies. Re-financing arrangements undertaken and ongoing financial support from the group shareholders provide the support needed to cover any working capital shortfalls.
1.6
Turnover
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.
1.7
Research and development expenditure
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.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 21 -
1.8
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.9
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents & licences
10 years straight line
Other
5 years straight line
1.10
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% on cost. Land not depreciated
Leasehold land and buildings
2% on cost. Land not depreciated
Plant and equipment
12.5% on cost or over lease term if shorter
Fixtures and fittings
10% on cost
Computers
33% on cost
Motor vehicles
25% reducing balance
Office equipment
25% reducing balance
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.
1.11
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 22 -
1.12
Fixed asset investments
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.
1.13
Impairment of fixed assets
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.
1.14
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 23 -
Costs includes all costs incurred in bringing each product to its present location and condition, as follows:
Raw materials, consumables - purchase cost on a first in, first out basis
and goods for resale
Work in progress and finished goods - cost of direct materials and labour using standard costing
Net realisable value is based on the actual or estimated selling price, less further costs expected to be incurred to completion of goods, less further costs to be incurred in marketing, selling and distribution of finished goods.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.15
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.16
Financial instruments
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
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 24 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 25 -
1.17
Equity instruments
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.
1.18
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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
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.
1.19
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.20
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 26 -
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.21
Leases
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.22
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 27 -
2
Judgements and key sources of estimation uncertainty
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Goodwill
Determining the useful life of the asset acquired and whether the amortisation rate remains appropriate. Also determining whether there are indicators of impairment. Factors taken into consideration in reaching such a decision include reviewing the financial performance of subsidiaries acquired and whether they are generating the levels of profits expected, including factored in growth, from when they were acquired. This includes performance achieved to date along with the expected future performance of the subsidiaries.
The value of goodwill in the group is £262,744 (2023: £275,709) at the reporting date. There is also negative goodwill in relation to the subsidiary acquisitions of £2,132,665 (2023: £2,227,959) at the reporting date.
Stock
Inventories are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
Judgement is also required in relation to the quality of a product after manufacture and whether there could be any potential defects amongst the finished goods which would result in a reduced sales price.
At the reporting date, the group has stock held for resale of £3,518,415 (2023: £3,534,251) and this is after factoring in a stock provision.
Bad debt provision
Determining whether or not a trade debtor balance is recoverable or not. Factors taken into consideration include looking at historical time frame for customer to settle their debt and whether this is unusual or not, financial stability of the customer and discussions with the customer themselves to ascertain a timescale on when payment will be made and agreeing payment plans where appropriate.
A bad debt provision of £505,688 (2023: £469,133) has been recognised at the reporting date.
Fair value
Determining the fair value of investment property sometimes requires judgement based on external property sales in the local area for similar properties. The directors were able to establish the fair value of the UK investment property as it was sold on an arms length basis in December 2023 which has been considered reflective of the property's fair value at the reporting date.
After taking account of the property purchase and disposals during the period, the fair value of investment property at the reporting date was £1,465,959 (2023: £845,485).
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 28 -
Classification of leases
The group has entered into leases as a lessee obtaining the use of land and buildings and other tangible fixed assets. The classification of such leases as operating or finance leases requires management to determine, based on evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the balance sheet.
The amount due under finance leases and hire purchase agreements at the reporting date is £243,854 (2023: £280,781).
Key sources of estimation uncertainty
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.
Useful life of tangible fixed assets
Tangible fixed assets, other than investment properties and land and buildings, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Value in use
Where an indication of impairment exists, the directors will carry out an impairment review to determine the recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and value in use. The value in use calculation requires the directors to estimate the future cashflows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Retail, candle and other church supplies
4,425,807
5,717,881
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
3,563,143
4,426,672
Republic of Ireland
862,664
1,291,209
4,425,807
5,717,881
2024
2023
£
£
Other revenue
Interest income
134,000
83,083
Rental income arising from investment properties
3,090
-
Management charges
300,000
-
Sundry income
392
-
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 29 -
4
Operating loss
2024
2023
£
£
Operating loss for the period is stated after charging/(crediting):
Exchange gains
(4,059)
(6,964)
Research and development costs
-
1,452
Fees payable to the group's auditor for the audit of the group's financial statements
5,600
4,000
Depreciation of owned tangible fixed assets
87,080
112,170
Depreciation of tangible fixed assets held under finance leases
13,824
23,767
Profit on disposal of tangible fixed assets
(7,388)
(4,433)
Loss on disposal of investment property
9,520
Amortisation of intangible assets
(80,739)
(23,999)
Impairment of intangible assets
50,891
Operating lease charges
146,369
133,231
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,600
4,000
Audit of the financial statements of the company's subsidiaries
20,562
19,388
26,162
23,388
For other services
Taxation compliance services
3,033
-
All other non-audit services
9,000
-
12,033
-
For services in respect of associated pension schemes
Audit
417
1,250
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the period was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
101
81
2
2
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
6
Employees
(Continued)
- 30 -
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
1,493,853
1,765,889
Social security costs
126,659
137,012
-
-
Pension costs
127,149
105,659
1,747,661
2,008,560
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
3,083
Interest on the net defined benefit asset
134,000
80,000
Total income
134,000
83,083
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
22,717
27,069
Other interest on financial liabilities
29,296
15,931
Interest on finance leases and hire purchase contracts
9,021
8,188
Net interest on the net defined benefit liability
125,000
75,000
Other interest
2,878
5,819
Total finance costs
188,912
132,007
9
Amounts written off investments
2024
2023
£
£
Amounts written back to/(written off) current loans
-
(217)
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(19,029)
(2,256)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
10
Taxation
2024
2023
£
£
(Continued)
- 31 -
Deferred tax
Origination and reversal of timing differences
(133,990)
(86,108)
Total tax credit
(153,019)
(88,364)
The actual credit for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(283,070)
(764,087)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
(70,768)
(191,022)
Tax effect of expenses that are not deductible in determining taxable profit
2,543
1,239
Tax effect of utilisation of tax losses not previously recognised
(23,260)
Unutilised tax losses carried forward
78,812
Adjustments in respect of prior years
347
Effect of change in corporation tax rate
-
9,488
Depreciation on assets not qualifying for tax allowances
7,152
7,919
Amortisation on assets not qualifying for tax allowances
(20,581)
6,132
Deferred tax adjustments in respect of prior years
(1,274)
Tax at marginal rate
(5)
Indexation allowance
(48,105)
Taxation credit
(153,019)
(88,364)
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2024
2023
£
£
Deferred tax arising on:
Revaluation of property
(329)
(197)
Actuarial differences recognised as other comprehensive income
(750)
(9,000)
(1,079)
(9,197)
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 32 -
11
Discontinued operations
Walter Shearer Limited
In February 2024, the decision was made to liquidate Walter Shearer Limited. The discontinued operations column represents the 2 months (2023: 3 months) of trading activity for Walter Shearer until it ceased trading.
12
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2024
2023
Notes
£
£
In respect of:
Goodwill
13
-
50,891
Recognised in:
Administrative expenses
-
50,891
The impairment relates to goodwill in subsidiary company Lalor Limited.
13
Intangible fixed assets
Group
Goodwill
Negative goodwill
Patents & licences
Other
Total
£
£
£
£
£
Cost
At 1 December 2023 and 30 April 2024
359,260
(2,287,043)
12,353
15,380
(1,900,050)
Amortisation and impairment
At 1 December 2023
83,551
(59,085)
825
1,601
26,892
Amortisation charged for the period
12,965
(95,293)
544
1,045
(80,739)
At 30 April 2024
96,516
(154,378)
1,369
2,646
(53,847)
Carrying amount
At 30 April 2024
262,744
(2,132,665)
10,984
12,734
(1,846,203)
At 30 November 2023
275,709
(2,227,958)
11,528
13,779
(1,926,942)
The company had no intangible fixed assets at 30 April 2024 or 30 November 2023.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 33 -
14
Tangible fixed assets
Group
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Office equipment
Total
£
£
£
£
£
£
£
£
Cost
At 1 December 2023
1,859,500
1,879,157
767,640
69,948
9,239
31,208
5,157
4,621,849
Additions
14,388
14,388
At 30 April 2024
1,859,500
1,879,157
782,028
69,948
9,239
31,208
5,157
4,636,237
Depreciation and impairment
At 1 December 2023
24,726
19,329
76,175
9,069
1,775
7,120
808
139,002
Depreciation charged in the period
15,454
17,990
57,985
5,147
926
2,965
437
100,904
Exchange adjustments
303
1,085
190
57
98
1,733
At 30 April 2024
40,180
37,622
135,245
14,406
2,758
10,183
1,245
241,639
Carrying amount
At 30 April 2024
1,819,320
1,841,535
646,783
55,542
6,481
21,025
3,912
4,394,598
At 30 November 2023
1,834,774
1,859,828
691,465
60,879
7,464
24,088
4,349
4,482,847
The company had no tangible fixed assets at 30 April 2024 or 30 November 2023.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
14
Tangible fixed assets
(Continued)
- 34 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2024
2023
2024
2023
£
£
£
£
Plant and equipment
135,575
293,150
Included within the net book value of freehold and leasehold properties at 30 April 2024 is land worth £605,000 (2023: £605,000) and is not depreciated.
15
Investment property
Group
Company
2024
2024
£
£
Fair value
At 10 November 2022
845,485
-
Additions through external acquisition
1,162,474
-
Disposals
(542,000)
-
At 30 April 2024
1,465,959
-
Investment properties are located in both the UK and the Republic of Ireland. The UK property brought forward was disposed of in the period. Another UK property was acquired during the period and the directors believe that its cost price is equal to the fair value at 30 April 2024.
The valuation of the Dublin property was carried out on 22 October 2022 by Landwood Group. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
16
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
17
4,507,263
4,507,263
Unlisted investments
46,428
46,428
46,428
46,428
4,507,263
4,507,263
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
16
Fixed asset investments
(Continued)
- 35 -
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 December 2023 and 30 April 2024
46,428
Carrying amount
At 30 April 2024
46,428
At 30 November 2023
46,428
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 December 2023 and 30 April 2024
4,507,263
Carrying amount
At 30 April 2024
4,507,263
At 30 November 2023
4,507,263
17
Subsidiaries
Details of the company's subsidiaries at 30 April 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Charles Farris Limited
England and Wales
Ordinary
100.00
-
Fortress Mere Limited
England and Wales
Ordinary
100.00
-
Direct Candles Limited
England and Wales
Ordinary
100.00
-
Braid Wines Limited
Scotland
Ordinary
0
100.00
Ethos Candles
England and Wales
Ordinary
0
99.93
Candles Provident Trust Limited
England and Wales
Ordinary
100.00
-
John G Rathborne Limited
Republic of Ireland
Ordinary
0
100.00
Lalor Limited
Republic of Ireland
Ordinary
0
100.00
Rathborne Investments Limited
Republic of Ireland
Ordinary
100.00
-
Hayes & Finch Limited
England and Wales
Ordinary
0
79.38
Walter Shearer Limited
Scotland
Ordinary
0
79.38
Hayes & Finch Limited is a subsidiary company of Charles Farris Limited and was acquired on 31 August 2023. Charles Farris Limited holds ordinary and preference shares which give them an overall control over Hayes & Finch Limited of 79.38%.
Walter Shearer Limited is a wholly owned subsidiary of Hayes & Finch Limited. This company entered liquidation in February 2024.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
17
Subsidiaries
(Continued)
- 36 -
The following companies are exempt from the requirements of s479A of the Companies Act 2006 in relation to the audit of their individual financial statements for the year ended 30 April 2024. A parent guarantee statement under s479C of the act has been filed at Companies House for each subsidiary.
Fortress Mere Limited (09933138)
Direct Candles Limited (03531236)
Braid Wines & Altar Supplies Limited (SC257058)
Hayes & Finch Limited (00086040)
Ethos Candles Limited and Candles Provident Trust Limited are both dormant companies and so no audit has been completed for these companies.
18
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
1,207,229
1,191,819
-
-
Work in progress
67,165
19,255
-
-
Finished goods and goods for resale
2,244,021
2,323,177
3,518,415
3,534,251
-
-
19
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
866,953
1,235,349
Corporation tax recoverable
29,330
Other debtors
502,497
456,651
Prepayments and accrued income
171,201
136,134
1,569,981
1,828,134
-
-
Deferred tax asset (note 24)
74,508
1,569,981
1,902,642
-
-
Amounts falling due after more than one year:
Deferred tax asset (note 24)
65,749
Total debtors
1,635,730
1,902,642
-
-
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 37 -
20
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
22
106,487
260,291
Obligations under finance leases
23
74,414
74,659
Other borrowings
22
531,761
790,000
Trade creditors
1,239,391
1,140,488
Corporation tax payable
3,446
Other taxation and social security
708,503
774,630
-
-
Deferred income
25
17,730
17,730
Other creditors
1,343,868
409,688
3,915
Accruals and deferred income
368,549
279,462
18,000
7,500
4,390,703
3,750,394
21,915
7,500
Several subsidiary companies received bounce back loans or business interruption loans during the Coronavirus pandemic. The amount due in the next 12 months in respect of these loans is £79,340 (2023: £79,401).
Subsidiary company Fortress Mere has a bank loan outstanding. The amount due in the next 12 months is £25,044 (2023: £172,203).
Within obligations due under finance leases is £40,489 (2023: £40,734) in relation to a sale and finance leaseback transaction entered into by subsidiary company Hayes & Finch Limited.
Within deferred income is £17,730 (2023: £17,730) of deferred profit in relation to a sale and leaseback transaction that resulted in a finance lease.
Within other creditors is £17,220 (2023: £131,411) in relation to the shares acquired by Charles Farris in Hayes & Finch Limited. This was paid to the individuals who sold their shares to Charles Farris in December 2023 and January 2024, however some shareholders have not come forward to claim their proceeds and a balance does remain owing at 30 April 2024.
21
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
22
697,223
591,002
Obligations under finance leases
23
169,439
206,122
Deferred income
25
41,370
48,758
908,032
845,882
-
-
Amounts totalling £95,257 (2023: £127,967) within borrowings are in respect of Coronavirus Business Interruption Loan Scheme and bounce back loans, provided to several subsidiary companies. These are secured in full by the UK government.
Subsidiary company Fortress Mere has a bank loan outstanding. The amount due beyond the next 12 months is £450,369 (2023: £463,035).
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
21
Creditors: amounts falling due after more than one year
(Continued)
- 38 -
Within obligations due under finance leases is £87,453 (2023: £110,000) in relation to a sale and finance leaseback transaction entered into in by subsidiary company Hayes & Finch Limited.
Within deferred income is £41,370 (2023: £48,758) of deferred profit in relation to a sale and leaseback transaction that resulted in a finance lease.
22
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
801,608
842,606
Bank overdrafts
2,102
8,687
Other loans
531,761
790,000
1,335,471
1,641,293
-
-
Payable within one year
638,248
1,050,291
Payable after one year
697,223
591,002
The loans provided to Hayes & Finch Limited are secured against the investment properties and leasehold land and buildings.
Several subsidiaries of the group received loans under the Bounce Back Loan scheme during the COVID pandemic. These loans are being repaid over the 5 year loan term. Interest at a rate of 2.5% per annum applies to these loans.
Charles Farris Limited received a loan under the Coronavirus Business Interruption Loan Scheme in a previous financial period. No repayment were due in the first 12 months of the loan. The repayments are made over 60 equal instalments. Interest is charged at a fixed 2.5% per annum for the first 5 years of the loan, with the rate becoming variable for the final 12 months of the loan.
£79,340 (2023: £79,401) is due to be paid in the next 12 months, with the balance of £95,257 (2023: £127,967) due beyond the next 12 months in respect of these loans.
All loans are guaranteed by the UK Government.
Subsidiary company Fortress Mere also has a bank loan outstanding. The amount due at the reporting date is £475,413 (2023: £635,238). £25,044 (2023: £172,203) is due to be paid in the next 12 months, with the balance of £450,369 (2023: £463,035) due beyond the next 12 months.
All amounts are due to be repaid within the next 5 years.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 39 -
23
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
74,414
74,659
In two to five years
169,439
206,122
243,853
280,781
-
-
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 3- 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The hire purchase and sale and leaseback transactions undertaken are secured against the specific assets listed in the agreements. The net book value of these assets is disclosed within the tangible fixed asset note earlier in these financial statements.
£127,942 (2023: £150,734) is due in respect of a sale and leaseback transaction that resulted in a finance lease.
24
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Group
£
£
£
£
Accelerated capital allowances
110,235
122,661
-
-
Revaluations
320,200
532,526
65,749
73,768
Retirement benefit obligations
63,662
79,611
-
-
Investment property
285,678
188,063
-
-
Other
-
-
-
740
779,775
922,861
65,749
74,508
The company has no deferred tax assets or liabilities.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
24
Deferred taxation
(Continued)
- 40 -
Group
Company
2024
2024
Movements in the period:
£
£
Liability at 1 December 2023
848,353
-
Credit to profit or loss
(133,990)
-
Credit to other comprehensive income
(750)
-
Other
413
-
Liability at 30 April 2024
714,026
-
The deferred tax liability set out above is expected to partially reverse within 12 months and relates to accelerated capital allowances that are expected to partially mature within the same period. The liability in respect of revaluation relates to a property held by Fortress Mere, which had been revalued prior to acquisition by Small Brown Bird Limited.
The group has unrelieved tax losses for which a deferred tax asset has not been included in the accounts as the timing of the recoverability of this is uncertain.
The deferred tax asset relates to tangible fixed assets sold within the group. Some of this is expected to reverse in the next 12 months through increased depreciation expenditure.
25
Sale and leaseback
Group
Company
2024
2023
2024
2023
£
£
£
£
Arising from deferred profit
59,100
66,488
-
-
Deferred income is included in the financial statements as follows:
Current liabilities
17,730
17,730
Non-current liabilities
41,370
48,758
59,100
66,488
-
-
Within deferred income is £59,100 (2023: £66,488) of deferred profit in relation to a sale and leaseback transaction that resulted in a finance lease.
26
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
50,020
62,982
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.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
26
Retirement benefit schemes
(Continued)
- 41 -
Defined benefit schemes
The group operates a defined benefit scheme for qualifying employees, operated in the UK through Hayes & Finch Limited pension scheme.
The defined benefit scheme was closed to new members on 1 July 2002. A defined contribution pension scheme was introduced for staff from that date.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 5 April 2022 by ISIO Group Limited, a firm of actuaries that are independent of Hayes & Finch Limited.
No contributions were made by the company during the period (2023: £Nil) to cover the administrative costs borne by the scheme.
The next triennial actuarial valuation will be due as at 5 April 2025.
The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.
The scheme is subject to risk in relation to changes in inflation and to changes in the value of the investments and the returns derived from such investments. An investment strategy is in place which has been developed by the pension trustees in order to manage investments and mitigate such risks.
Other information
The balances shown in the movement of plan assets and liabilities below and marked as 'other' is the fair value of the plan assets and liabilities at the time Hayes & Finch was acquired by Charles Farris Limited.
2024
2023
Key assumptions
%
%
Discount rate
5.20
4.5
Expected rate of increase of pensions in payment
2.25
2.1
Expected rate of salary increases
3.00
2.7
Mortality assumptions
2024
2023
Assumed life expectations on retirement at age 60:
Years
Years
Current age 60
- Males
24.7
24.7
- Females
27.3
27.3
Current age 40
- Males
25.6
25.6
- Females
28.3
28.3
Mortality rates are based on S2NxA with allowance for future mortality improvements using CMI-2023 (2023: CMI-2023) with a long term rate of improvement of 1.25% per annum for males and females (2023: 1.25% per annum for males and females).
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
26
Retirement benefit schemes
(Continued)
- 42 -
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
2024
2023
Group
£
£
Present value of defined benefit obligations
7,170,000
7,662,000
Fair value of plan assets
(7,430,000)
(7,986,000)
Deficit/(surplus) in scheme
(260,000)
(324,000)
The company had no post employment benefits at 30 April 2024 or 1 December 2023.
Group
2024
2023
Amounts recognised in the profit and loss account
£
£
Costs/(income):
Net interest on net defined benefit liability/(asset)
(9,000)
(5,000)
Other costs and income
70,000
42,000
Total costs
61,000
37,000
Group
2024
2023
Amounts recognised in other comprehensive income
£
£
Costs/(income):
Actual return on scheme assets
285,000
46,000
Less: calculated interest element
134,000
80,000
Return on scheme assets excluding interest income
419,000
126,000
Actuarial changes related to obligations
(416,000)
(90,000)
Total costs
3,000
36,000
Group
2024
Movements in the present value of defined benefit obligations
Liabilities at 1 December 2023
7,662,000
Benefits paid
(201,000)
Actuarial gains and losses
(416,000)
Interest cost
125,000
At 30 April 2024
7,170,000
The defined benefit obligations arise from plans which are wholly or partly funded.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
26
Retirement benefit schemes
(Continued)
- 43 -
Group
2024
Movements in the fair value of plan assets
£
Fair value of assets at 1 December 2023
7,986,000
Interest income
134,000
Return on plan assets (excluding amounts included in net interest)
(419,000)
Benefits paid
(201,000)
Other
(70,000)
At 30 April 2024
7,430,000
The actual return on plan assets was £42,000 (2023 - £126,000).
Group
2024
2023
Fair value of plan assets
£
£
Gilts
-
4,714,000
Corporate bonds
-
2,999,000
Diversified growth funds
-
86,000
Cash
32,000
187,000
7,398,000
-
7,430,000
7,986,000
27
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
10,001
10,001
10,001
10,001
Ordinary shares have full voting, dividend and distribution rights attached.
28
Revaluation reserve
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the period
(469)
Deferred tax on revaluation of tangible assets
329
197
-
-
Transfer to retained earnings
(1,110)
(666)
-
-
At the end of the period
(1,250)
(469)
-
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 44 -
29
Merger reserve
2024
2023
Group and company
£
£
At the beginning of the period
4,497,262
-
Other movements
-
4,497,262
At the end of the period
4,497,262
4,497,262
The balance in the merger reserve relates to the acquisition of subsidiaries in the previous period,
30
Fair value reserve
2024
2023
Group
£
£
At the beginning of the period
2,075
-
Additions
-
2,075
At the end of the period
2,075
2,075
2024
2023
Company
£
£
At the beginning and end of the period
-
-
31
Profit and loss reserves
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the period
(635,273)
-
(7,500)
-
Loss for the period
(58,560)
(580,450)
(14,415)
(7,500)
Transfer to reserves
-
(1,288)
-
-
Transfer from revaluation reserve
1,110
(121)
-
-
Actuarial differences recognised in other comprehensive income
(3,000)
(36,000)
Tax on actuarial differences
750
9,000
-
-
Currency translation differences
(8,476)
(26,536)
Amounts attributable to non-controlling interests
203
122
-
-
At the end of the period
(703,246)
(635,273)
(21,915)
(7,500)
32
Controlling party
The ultimate controlling party is Mr R Simpson
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 45 -
33
Related party transactions
Transactions with related parties
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2024
2023
£
£
Group
Other related parties
1,116,846
25,618
Company
Other related parties
3,915
-
At the reporting date, the group owed Fortress Whitton Limited, a company under the indirect control of the directors and shareholders of Small Brown Bird Limited, £2,787 (2023: £2,787) in respect of an interest free loan made to Fortress Mere Limited.
At the reporting date, the group owed Senex Capital Limited, a company under the direct control of the directors and shareholders of Small Brown Bird Limited, £1,114,059 (2023: £Nil) in respect of a loan to acquire freehold property (£1,110,144) held by Fortress Mere Limited. No interest has been charged on this loan to date. Legal fees on behalf of Small Brown Bird Limited of £3,915 (2023: £Nil) were also settled by Senex Capital Limited in the period.
The group also owed Senex Capital Limited, £Nil (2023: £22,831) in respect of a loan totalling for £22,700, made to Hayes & Finch Limited. Interest at 6% per annum is charged on the loan balance and £131 of interest has accrued on the loan to date. This loan has now been repaid.
Amounts due from related parties
2024
2023
Balance
Balance
£
£
Group
Other related parties
452,093
399,351
At the reporting date, Senex Capital Limited, a company under the common control of the director and shareholders of Small Brown Bird Limited, owed the subsidiaries of Small Brown Bird Limited the following balances:
2024 2023
Rathborne Investments Limited £198,114 £200,131
Direct Candles Limited £ 85,172 £ 85,172
Fortress Mere Limited £ 10,001 £ 40,339
Charles Farris Limited £145,825 £ 60,728
Candles Provident Trust Limited £ 100 £ 100
Total £439,212 £386,470
All loans were advanced interest free.
At the reporting date, Fortress Whitton Limited, a subsidiary of Senex Capital Limited, owed the group £10,424 (2023: £10,424) in respect of a loan from Charles Farris Limited.
At the reporting date, Fortress Norton Limited, a company under the control of Mr R Simpson, owed the group £2,457 (2023: £2,457) in respect of a loan from Charles Farris Limited.
SMALL BROWN BIRD LIMITED AND ITS SUBSIDIARIES
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 46 -
34
Cash generated from/(absorbed by) group operations
2024
2023
£
£
Loss after taxation
(130,051)
(675,723)
Adjustments for:
Taxation credited
(153,019)
(88,364)
Finance costs
188,912
132,007
Investment income
(134,000)
(83,083)
Gain on disposal of tangible fixed assets
(7,388)
(4,433)
Loss on disposal of investment property
9,520
Fair value gain on investment properties
(3,485)
Amortisation and impairment of intangible assets
(80,739)
26,892
Depreciation and impairment of tangible fixed assets
100,904
135,937
Other gains and losses
-
217
Pension scheme non-cash movement
70,000
42,000
Movements in working capital:
Decrease in stocks
15,836
51,453
Decrease/(increase) in debtors
218,773
(595,796)
(Decrease)/increase in creditors
(13,492)
294,889
Increase in deferred income
-
66,488
Cash generated from/(absorbed by) operations
85,256
(701,001)
35
Analysis of changes in net debt - group
1 December 2023
Cash flows
Market value movements
Exchange rate movements
30 April 2024
£
£
£
£
£
Cash at bank and in hand
705,774
183,478
-
(30,769)
858,483
Bank overdrafts
(8,687)
6,585
-
-
(2,102)
697,087
190,063
-
(30,769)
856,381
Borrowings excluding overdrafts
(1,632,606)
280,251
18,986
-
(1,333,369)
Obligations under finance leases
(280,781)
36,928
-
-
(243,853)
(1,216,300)
507,242
18,986
(30,769)
(720,841)
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