The directors present the strategic report for the year ended 31 December 2024.
In the year to 31 December 2024, the group made a profit after tax of £128,272, compared to £369,346 in the comparative period. The principal reason for the decline in profit was a reduction in turnover, with the hospitality sector continuing to be affected by the ongoing cost-of-living crisis.
Looking ahead, the group expects to continue generating profits over the twelve months from the date of signing. However, the level of profitability will depend on a range of factors, including political decisions, government strategies to address the current macroeconomic environment, interest rate decisions by the Bank of England, upcoming rent reviews, international economic policies (including those associated with former US President Trump), the group’s trading performance in the months leading up to Christmas, and fluctuations in currency exchange rates. Management continues to monitor cash flow carefully, and the latest forecasts indicate that there will be sufficient funds to meet working capital requirements and maintain a positive net cash position.
When preparing these financial statements, management has applied the going concern assumption. The group made a profit after tax of £128,272 during the year under review and as noted as is forecasted to make further profit in for twelve months from the date of signing. Management prepared forecasts to for twelve months from the date of signing which indicate the group will be able to meet its working capital requirements during this period.
The group has an invoice discount facility in place, the terms have been considered when preparing the forecast. Either party can cancel the terms of the facility following a contractual agreed notice period, and should cancellation take place during the going concern review period being twelve months from the date of signing, an alternative facility will need to be secured.
To achieve the overall group strategy, the directors monitor the business by measuring actual performance in comparison to details monthly and annual budgets, and by reference to certain specific financial and nonfinancial key performance indicators. Sales growth, gross profit margin and staff costs levels are very important indicators in this respect.
The management of the business and the nature of the group's strategy are subject to several risks. The directors have set out below the principal risks facing business. Where commercially possible, the directors have put in place processes to monitor and mitigate such risks.
High proportion of variable overheads and variable revenues
A large portion of the group's overheads are still variable. The group looked at reducing overheads where there is a significant change in revenue to ensure the group can cover such costs. Management closely monitors fixed overheads against budget monthly and cost saving exercises and implemented when there is an anticipated decline in revenues.
Competition
The market in which the group operates is highly competitive. As a result, there is a constant downwards pressure on the margins and the additional risk of being unable to meet customers' expectations. Policies of constant price monitoring and on-going market research are in place to mitigate such risks.
Fluctuations in currency exchange
Approximately 91% of the group's purchases of goods for resale are from Italy and other countries in the European Union, which represent 75% of the total cost of sales. Total cost of sales includes goods purchased, transport costs from Italy, duty and storage costs. As a group, therefore there is exposure to foreign currency fluctuations.
The group uses various financial instruments which include cash, loans, and other items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instrument is to raise finance for the group's operations. The existence of these financial instruments exposes the group to several financial risks, which are described in more detail below.
The main risks arising from the group's financial instruments are currently risk, interest rate risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarized below. These policies have remained unchanged from previous years.
Liquidity risk
The group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable need. Short-term flexibility is achieved through invoice discounting facilities.
Cash flow interest rate risk
The group finances its operations through a mixture of retained profits, invoice discount facilities and unsecured loans. All the group's borrowings are at variable rates of interest. The group managers its exposure to interest rate fluctuations by seeking to minimise short term borrowings using its invoice discounting facilities.
Credit risk
The group's principal financial assets are cash deposits and trade debtors. The principal credit risk arises from its trade debtors.
To manage credit risk, the directors set limits for customers based on a combination of payment history, customer relationships, knowledge of the types of customers and business and third-party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
There are no adjusting or non-adjusting post balance sheet events.
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Franciacorta Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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 £11,248 (2023: £10,255 profit).
Franciacorta Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Units 2 & 3, 199 Eade Road, London, UK, N4 1DN.
The group consists of Franciacorta Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention modified to include the revaluation of 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Franciacorta 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 financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
When preparing these financial statements, management has applied the going concern assumption. The group made a profit after tax of £128,272 during the year under review and as noted in the strategic report is forecasted to make further profit in the twelve months from the date of signing. Management prepared forecasts covering twelve months from the date of signing which the group will be able to meet its working capital requirements during this period.
Turnover represents the net invoiced value of goods, excluding value added tax. Turnover arose from the group's principal activity, which is that of the sale of wines and provisions. Turnover is recognised at the point of sale, which is when the goods are supplied to the customer.
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 income statement.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The group operates a contributory money purchase pension scheme for all of its employees through the National Employment Savings Trust. The group's contributions are charged against profits in the year in which the contributions are made.
Assets acquired under hire purchase contracts are capitalised at their fair value on acquisition and finance charges are allocated over the period of the contract in proportion to the capital element outstanding. Rentals payable under operating leases are charged to Statement of comprehensive income on a straight line basis over the lease term.
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.
Invoice discount facility
The group has an invoice discount facility in place based on the value of trade debtors. Under this arrangement, the group has retained both the credit and late payment risk associated with the trade debtors. As the group has retained substantially all the risks and rewards of ownership of the trade debtors, it continues to recognise the trade debtors in the statement of financial position with advances from the facility provider treated as a separate liability.
Forward exchange contracts
Gains and losses on forward foreign exchange contracts, used to manage foreign exchange exposure, are taken to the statement of comprehensive income on maturity to match the underlying transactions.
Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the group but are presented separately due to their size or incidence.
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.
Provision for obsolete, slow moving or defective stocks
The directors have applied their knowledge and experience of the wholesale consumables industry in determining the level and rates of provisioning required in calculating the appropriate stock carrying values. The provision includes estimates for shrinkage, spoilage and slow-moving items depending on the age and current selling process of the individual stock items.
Provision for bad debt
The directors have reviewed the ageing of the trade debtors at the year end and the level of recovery following the year end. The provision is based on historical experience of recovery and the ageing of debts as well as specific knowledge of the solvency and ability to pay off the group's customers at the reporting date.
Prior Period Adjustment – Foreign Exchange Disclosure
A prior period adjustment has been made to reclassify certain expenditure, which affects the disclosure of foreign exchange movements. As a result, the previously reported foreign exchange gain of £369,251 for the financial year ended 31 December 2023 has been restated.
This adjustment has no impact on the Group Statement of Comprehensive Income, the Group Statement of Financial Position or the Company Statement of Financial Position.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year retirement benefits were accruing to 4 directors (2023: 4) in respect of defined contribution pension schemes.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Camisa Shops Limited ceased trading effective 3 August 2024 and therefore results for the company have been included as discontinued operations. It is the intention of the present Board to hold the company as dormant before striking it off in the future. The Franciacorta group has confirmed that they will provide support to enable the company to fulfil its financial obligations as and when they fall due until this point.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Ali-Vini Company (1985) Limited, a company indirectly held by the company, was dissolved on 19 November 2024.
The registered office address of all subsidiaries is the same as that for Franciacorta Limited, which is detailed on the company information page of these financial statements,
Camisa Shops Limited - Audit Exemption
The directors have taken advantage of exemption available under section 479A of the Companies Act 2006 and have not had the financial statements of Camisa Shops Limited for the year ended 31 December 2024 audited. Camisa Shops Limited is a wholly owned subsidiary of the group, registered in England and Wales with company number 06276923.
An impairment of stocks recognised in the statement of comprehensive income was £5,031 (2023: £53).
Trade debtors include an amount of £2,540,340 (2023: £2,722,984) which provide security in respect of invoice discount facilities.
During the year impairment losses totaling £34,262 (2023: £55,147) were recognised on trade debtors.
A deferred duty creditor of £69,751 (2023: £93,035) is included in trade creditors above and is guaranteed by a third party. In order for this guarantee to be given the group is required to hold £150,000 on deposit.
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £63 (2023: £6,371) remained unpaid at the year end.
The shares carry full rights to vote, receive dividends, and participate in capital distributions, including in the event of a winding up. The shares are not redeemable.
Share premium
Includes only premiums received on issue of share capital. Any transaction costs associated with issuing of shares are deducted from share premium.
Capital redemption reserve
This represents reserves created on buy-back of class B shares.
Profit and loss account
Includes all current and prior period retained profit and losses.
Invoice discounting facilities
The invoice discount facilities are secured by a fixed and floating charge over all assets of the two principal United Kingdom subsidiary companies, Alivini Company Limited and Alivini (North) Limited and by a cross guarantee among those companies and Franciacorta Limited.
The company utilised its invoice discounting facility at the year end, resulting in a closing debtor balance of £50,539 (2023: £108,718). The invoice discount facilities are secured by a fixed and floating charge over all assets of the two principal United Kingdom subsidiary companies, Alivini Company Limited and Alivini (North) Limited and by a cross guarantee among those companies and Franciacorta Limited.
VAT Group
The parent company is a member of a VAT group with Alivini Company Limited and Alivini (North) Limited, both being subsidiaries of the parent. Should Alivini Company Limited or Alivini (North) Limited fail to meet its VAT obligations, HM Revenue and Customs are entitled to make additional claims against the parent company.
As at 31 December 2024, the group and parent company had no capital commitments (2023: None).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
No related party transactions have been disclosed between the company and 100% owned other group companies as permitted by FRS 102 Section 33.
During the year, the group made payments totalling £90,310 (2023: £74,250) to the Alivini Group Directors Pension Scheme for rental of the group's warehouse and offices in Leeds. The Alivini Group Directors Pension Scheme is a related party by virtue of the fact that several directors of the group are also trustees of the Pension Scheme. There was no balance due to the Alivini Group Directors Pension Scheme at the year end (2023: £Nil).
In the opinion of the directors, there is no ultimate controlling related party.