CHAPEAU FETTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 JULY 2024
2.ACCOUNTING POLICIES (continued)
Since the end of FY24 the Group in which the company forms a part has continued to grow, with turnover for the first half of FY25 54% higher than the corresponding period in FY24 (Note: £10.2m in Q1 and Q2 FY25, compared to £6.6m in Q1 and Q2 FY24). The increase in turnover has been aided by strong like-for-like House sales and new openings during the year. Looking forward, the Company has three additional Houses currently under construction (Note: Chrysler, Battersea Power Station, Millennium Bridge). The increasing number of Houses continues to increase contribution to central overheads, resulting in improved EBITDA performance.
Based on this growth, forecasts prepared for the period to July 2027, and improving profitability metrics, the Company has the appropriate level of support in place. The Company is currently in a net liability position and loss making however the Group in which the Company forms a part is expected to continue to generate positive cash flows for the foreseeable future. The Group has confirmed it will provide financial support to enable the Company to meet its financial obligations.
The directors consider that the Company maintains an appropriate level of liquidity, sufficient to meet the demands of the business including any capital and servicing obligations.
Prior to the year-end the Group in which the Company forms a part has ensured additional funding through a share issue and a loan, as such the Director has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubts upon the Company's ability to continue as a going concern. Thus the Director has continued to adopt the going concern basis of accounting in preparing these financial statements.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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CASH AND CASH EQUIVALENTS
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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The Company has no employees other than the director, who did not receive any remuneration (2023: £NIL).
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