FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
COMPANY INFORMATION
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NEPTUNE HOLDCO LIMITED
CONTENTS
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NEPTUNE HOLDCO LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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.
The company is exposed to the following risks and uncertainties and mitigates them as follows:
Foreign Exchange Risk The group transacts in different currencies. The directors closely monitor foreign exchange rates in order to mitigate this risk and use forward exchange contracts to hedge against this risk. Interest Rate and Liquidity Risk The group 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 group will continue to invest in research and development in order to ensure its products and internal processes remain competitive.
The directors objective for the group is to continue its growth through expanding market share and its product ranges despite the tough economic environment.
The directors of the group 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 group for the benefit of all stakeholders of the group 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.
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NEPTUNE HOLDCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
This report was approved by the board and signed on its behalf.
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NEPTUNE HOLDCO 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 £1,121,056 (2023:profit £875,370).
No dividends were declared in the year (2023: Nil).
The directors who served during the year were:
The group'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 group's performance.
The group 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.
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NEPTUNE HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2021 UK Government's Conversion Factors for Company Reporting. Intensity measurement The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per person, the recommended ratio for the sector.
Measures taken to improve energy efficiency
We educate staff to be energy aware and have installed technology to control our lighting and heating to reduce the time they are on and thus the energy used. We have also made significant strides in reducing CO2 emissions from our distribution fleet by improving delivery efficiency, enabling the business to significantly reduce the number of vehicles in operation and stem mileage. The increase in the intensity ratio is due to headcount cost reduction initiatives in the business during the year.
Notes:
Transport fuel use/emissions have not been included as the amount of business travel is negligible.
The group has included mandatory directors' report disclosures within the strategic report as they are considered by the directors to be of strategic importance.
There have been no events since the balance sheet date that required disclosure in these financial statements.
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NEPTUNE HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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 HOLDCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 the Group 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 for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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NEPTUNE HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE HOLDCO LIMITED
We have audited the financial statements of Neptune Holdco Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 September 2024, which comprise the Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated statement of financial position, the Company statement of financial position, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity, the Consolidated statement of net debt 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 Group 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 Group's or the 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 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 HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE HOLDCO LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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NEPTUNE HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE HOLDCO 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 Group 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:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙We have considered the nature of the industry and sector, control environment, and business performance;
∙We have considered the results of enquiries with management and the directors in relation to their own identification and assessment of the risks of irregularities within the entity;
∙We have reviewed the documentation of key processes and controls and performed walkthroughs of transactions to confirm that the systems are operating effectively, in line with documentation.
∙Any matters we identified having obtained and reviewed the Company and Group's documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
∙The matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
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 and Group 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 regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company's and the Group’s ability to operate or avoid a material penalty. These included data protection and health and safety legislation. 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;
∙Enquiring of management in relation to actual and potential claims or litigation;
∙Performing analytical procedures to identify unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
∙Reviewing board minutes;
∙Performing detailed testing in relation to the recognition of revenue with a particular focus around the year end cut off;
∙Reviewing acquisitions made in the period to consider the appropriateness of management's assumptions and accompanying journal postings; and
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NEPTUNE HOLDCO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPTUNE HOLDCO LIMITED (CONTINUED)
∙In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgments made in accounting estimates are indicative of potential bias; and evaluating the business rationale of significant transactions that are unusual or outside the normal course of business.
We also communicated identified laws and regulations and potential fraud risks to all members of the engagement team and remained alert to possible indicators of fraud or non-compliance with laws and regulations throughout the audit.
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 HOLDCO LIMITED
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
REGISTERED NUMBER:08480249
CONSOLIDATED 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 20 to 42 form part of these financial statements.
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NEPTUNE HOLDCO LIMITED
REGISTERED NUMBER:08480249
COMPANY 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 20 to 42 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
22.DEFERRED TAXATION (CONTINUED)
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Share premium account
Foreign exchange reserve
Merger Reserve
Profit and loss account
Cash flow hedge reserve This includes all movements on the fair value of forward foreign exchange contracts which are accounted for as derivative financial instruments. To the extent the cash flow hedge is effective, movements in fair value of the derivative financial instruments are recognised in other comprehensive income and presented in a seperate cash flow hedge reserve. Any ineffective portions of those movements are recognised in profit or loss for the year.
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 group has guaranteed merchant service facilities. The aggregate amount guaranteed at the year end was £1,516,000 (2023: £1,516,000). The group guarantees the third party lease commitments of a company under common control. At 30 September 2024, the lease commitments totalled £2,085,00 (2023: £2,085.000).
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £339,418 (2023: £330,122). At the year end £64,749 (2022: £70,225) was owing to the group's scheme.
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NEPTUNE HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
There is no ultimate controlling party. The company is controlled equally by the two directors, J G Redman and J Sims - Hilditch.
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