FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE RETAIL LIMITED
COMPANY INFORMATION
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NEPTUNE RETAIL LIMITED
CONTENTS
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NEPTUNE RETAIL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The Company is a wholly owned subsidiary of the Neptune Holdco Limited Group (‘The Group’).
FY24 was a pivotal year for Neptune, marking important progress in our journey toward long-term, sustainable profitability. While Group turnover remained stable at £73.4m (vs £73.6m in FY23), this performance was achieved against a backdrop of continued significant external headwinds, including category-wide demand softness in the UK and ongoing shipping disruptions arising from conflict in the Middle East. In response, the Group delivered a broad range of cost reduction and operational efficiency initiatives whilst also making strategic changes to strengthen leadership, most notably through the appointment of our new CEO, Mike Clark. These efforts supported a return to profitability, with Group operating profit of £0.6m. While this compares to £1.9m in FY23, the prior year included a one-off gain of £2.6m from negative goodwill. On an underlying basis, this reflects a material improvement, from a £0.7m operating loss in FY23 to a £0.6m profit in FY24. Throughout the year, we have remained focused on investing in our brand and sharpening our core product propositions. This renewed focus led to robust kitchen and furniture order books as we exited FY24, positioning us strongly for the year ahead. In parallel, our financing was successfully renewed in August 2024 on terms consistent with prior arrangements, providing continued stability and support for our growth ambitions. “FY24 represents a clear turning point in Neptune’s turnaround strategy, moving us from stabilisation into positive momentum. The Board is particularly encouraged by the continued improvement in financial performance into H1 FY25, with EBITDA nearly doubling that of the same period last year. We are increasingly confident that the business is on track to deliver a much stronger full-year result. As we look ahead, we do so with a renewed sense of purpose, focus, and optimism. I would like to offer my thanks to the Neptune team whose hard work and determination have been instrumental in navigating the challenges of the past few years and setting new pace and momentum for the business.” Will Kernan, Executive Chairman
The company is exposed to the following risks and uncertainties and mitigates them as follows:
Interest rate and liquidity risk The company has bank borrowings and is therefore exposed to interest rate and liquidity risk. The directors closely monitor borrowing facilities in order to mitigate this risk. Technology risk The company will continue to invest in research and development in order to ensure its products and internal processes remain competitive
The directors of the Company consider that they have fulfilled their individual and collective duty under section 172(1) of the Companies Act 2006 to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of all stakeholders of the company including its shareholders, employees, customers and the wider community. By managing the business responsibly the directors intend to support a financially stable and rewarding organisation which looks to deliver value for all stakeholders.
Page 1
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NEPTUNE RETAIL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
This report was approved by the board and signed on its behalf.
Page 2
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NEPTUNE RETAIL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors present their report and the financial statements for the year ended 30 September 2024.
The loss for the year, after taxation, amounted to £2,080,068 (2023: loss £802,061).
No dividends were paid during the year (2023: £Nil).
The directors who served during the year were:
The retail environment in the UK remains challenging and therefore represents an ongoing risk to the business. However, the business delivered a number of transformation initiatives during the year and the business has the wider support of the Neptune Group, which has delivered a step change in performance during the first half of FY25. As part of the Neptune Group, the business continues to have ongoing funding support. As a result, the Group’s projections, after considering reasonable possible changes in performance, show that the Group is able to operate within its financing levels and therefore management deem that the accounts should be made on a going concern basis.
The Company's policy is to consult and discuss with employees matters likely to affect their interests.
Information on matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Company's performance.
The Company has continued to foster relationships with both customers and suppliers, using regular meetings and updates to provide information on any major decisions that would impact them.
The Company has included mandatory directors' report disclosures within the strategic report as they are considered by the directors to be of strategic importance.
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NEPTUNE RETAIL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
There have been no events since the balance sheet date that required disclosure in these financial statements.
The auditors, Bishop Fleming Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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NEPTUNE RETAIL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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NEPTUNE RETAIL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE RETAIL LIMITED
We have audited the financial statements of Neptune Retail Limited (the 'Company') for the year ended 30 September 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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NEPTUNE RETAIL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE RETAIL LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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NEPTUNE RETAIL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE RETAIL LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙We have considered the nature of the sector, control environment and financial performance;
∙We have considered the results of enquiries with management and directors in relation to their own identification and assessment of the risk of irregularities within the entity; and
∙We have reviewed the documentation of key processes and controls and performed walkthroughs of transactions to confirm that the systems are operating in line with documentation.
As a result of these procedures, we have considered the opportunities and incentives that may exist within the organisation for fraud and identified the highest area of risk to be in relation to revenue recognition, with a particular risk in relation to year-end cut-off. In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override. We have also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the Financial Statements. The key laws and regulations we considered in this context included the UK Companies Act, FRS 102 and UK tax legislation. In addition, we considered provisions of other laws and regulation that do not have a direct effect on the Financial Statements but compliance with which may be fundamental to the Company's ability to operate or avoid a material penalty. These included data protection legislation, health and safety regulations and employment law. Audit response to risks identified We identified recognition of revenue and management override as key audit matters related to the potential risk of fraud, our procedures to respond to risks identified included the following:
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
∙Performing various substantive tests of detail related to the recognition of revenue;
∙Enquiring of management concerning actual and potential litigation claims;
∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement or fraud; and
∙In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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NEPTUNE RETAIL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE RETAIL LIMITED (CONTINUED)
As a result of the inherent limitations of an audit, there is a risk that not all irregularities, including a material misstatement in the Financial Statements or non-compliance with regulation, will be detected by us. This risk increases the further removed compliance with a law and regulation is from the events and transactions reflected in the Financial Statements, given we will be less likely to be aware of it, or should the irregularity occur as a result of fraud rather than a one-off error, as this may involve intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
10 Temple Back
BS1 6FL
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NEPTUNE RETAIL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE RETAIL LIMITED
REGISTERED NUMBER:05406630
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 27 form part of these financial statements.
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NEPTUNE RETAIL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Neptune Retail Limited is a limited liability company incorporated in England. The registered office is The Neptune Building, Frankland Road, Blagrove, Swindon, Wiltshire, SN5 8YG.
2.ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3)
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
- the requirements of Section 7 Statement of Cash Flows; - the requirements of Section 33 Related Party Disclosures as per Section 33.1A. This information is included in the consolidated financial statements of Neptune Holdco Limited as at 30 September 2024.
The Company is a parent company that is also a subsidiary included in the consolidated financial
statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
The retail environment in the UK remains challenging and therefore represents an ongoing risk to the business. However, the business delivered a number of transformation initiatives during the year and the business has the wider support of the Neptune Group, which has delivered a step change in performance during the first half of FY25. As part of the Neptune Group, the business continues to have ongoing funding support. As a result, the Group’s projections, after considering reasonable possible changes in performance, show that the Group is able to operate within its financing levels and therefore management deem that the accounts should be made on a going concern basis.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.ACCOUNTING POLICIES (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.ACCOUNTING POLICIES (continued)
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.ACCOUNTING POLICIES (continued)
GOODWILL
OTHER INTANGIBLE ASSETS
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.ACCOUNTING POLICIES (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Statement of financial position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.ACCOUNTING POLICIES (continued)
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Derecognition of financial instruments Derecognition of financial assets Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained. Derecognition of financial liabilities Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled. Stock provision The year end stock provision seeks to provide against any old, slow moving or damaged stock. Management performs a detailed assessment of the stock and considers ageing reports in establishing this provision.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Page 20
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
9.TAXATION (CONTINUED)
There were no factors that may affect future tax charges.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Capital redemption reserve
Profit and loss account
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
A company under common control has entered into the following agreements with HSBC Bank Plc:
Revolving credit facility - under the terms of this agreement Neptune Holdco Limited is entitled to request loans of up to £10,000,000. At the year end the company had received £10,000,000 of this facility. These loans are secured by a fixed and floating charge over all assets of Neptune Retail Limited in favour of the bank as well as an unlimited composite company guarantee between all members of the group and its associates. In addition, the following group company banking facilities are supported by the unlimited composite company guarantee between all members of the group in favour of HSBC Bank Plc: Forward contracts & currency options £5,950,440 (2023: £12,410,034).
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund an amounted to £111,277 (2023: £86,214). Contributions total £18,295 (2023: £20,658) were payable to the fund at the reporting date and are included in creditors.
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NEPTUNE RETAIL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The ultimate and immediate parent undertaking is Neptune Holdco Limited, a company incorporated in England and Wales. The smallest and largest group for which group financial statements are prepared is Neptune Holdco Limited. Copies of the group financial statements are available from Companies House.
There is no ultimate controlling party. The company is controlled equally by the two directors, J G Redman and J E Sims-Hilditch.
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