FIRED EARTH LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
30TH SEPTEMBER 2024 |
FIRED EARTH LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
30TH SEPTEMBER 2024 |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 6 |
Report of the Independent Auditors | 9 |
Statement of Comprehensive Income | 12 |
Balance Sheet | 13 |
Statement of Changes in Equity | 14 |
Notes to the Financial Statements | 15 |
FIRED EARTH LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
First Floor, Woburn Court |
2 Railton Road |
Woburn Rd Ind Est |
Kempston |
Bedfordshire |
MK42 7PN |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
The directors present their strategic report for the year ended 30th September 2024. |
REVIEW OF BUSINESS |
PRINCIPAL ACTIVITIES |
The principal activities of the company continue to be that of retail, marketing and distribution of hand-made ceramic tiles, specialist interior finishes and home fashion products. |
REVIEW OF BUSINESS |
The company's performance during the year was as follows: |
30 September 2024 |
30 September 2023 |
£ | £ |
Turnover | 14,995,946 | 14,170,202 |
Loss before interest, tax, depreciation, amortisation, and exceptional income / costs ("EBITDA") |
(1,358,491 |
) |
(1,742,455 |
) |
Operating loss | (1,662,361 | ) | (1,780,743 | ) |
Profit / (loss) for the financial year attributable to members of the parent company | (1,660,522 | ) | (1,530,608 | ) |
Average number of employees | 144 | 140 |
The turnover for the year at £14,995m was up 5.8% on the previous year (2023: £14.170m). The EBITDA loss for the period was lower at £1.358m loss (2023: £1.742m loss) and the operating loss was £1.662m (2023: £1.781m loss). |
It was encouraging to see an improvement in turnover against the backdrop of a particularly challenging market. However, cost pressures and wage inflation contributed to an operating loss. |
We saw a decline in our online performance but double-digit growth in our showrooms as customer behaviour shifted back towards the full retail in-store experience, taking advantage of our design service and knowledgeable employees. |
The closing shareholders' deficit at 2024 was £3.083m (2023: £1.422m). |
No dividends were declared in the year (2023: £nil). |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
Financial risk management |
The company has established risk management procedures, involving the identification and monitoring of operational, regulatory, financial and market driven factors, at various levels throughout the business. The company takes a proactive approach to managing risks. |
Changes in current economic conditions can have a sudden and material impact on the company. This makes awareness and flexibility key to mitigating risks in rapidly changing conditions and important in identifying relevant business opportunities. |
The company operates in a number of competitive markets and as such the activities of our competitors can adversely affect the company. Competition in the market place, particularly from online retailers, can create pricing pressures. A significant downwards pressure on pricing and or a reduction in demand might impact the company's ability to deliver its strategy and business plans. |
To mitigate these risks: |
- We have differentiated, high quality products and actively invest in new product and design to maintain our position. |
- Constant monitoring of our market position and competitor strategies. |
General economic conditions |
The company's operations are sensitive to the current economic conditions and our exposure is most notable in the consumer and housing markets. Improved economic conditions would bring benefits given the operational gearing of the company whereas adverse conditions can result in reduced demand for our products. Cost of living pressures and economic uncertainty are both impacting consumer confidence and a more considered purchasing journey. Inflationary pressures have eased from previous years but have still increased the cost base of the business particularly relating to salary costs. |
To mitigate these risks: |
- The company tracks key economic metrics for the markets in which it operates. The data is used to identify early signs of change enabling the company to adjust its strategic plans and modify its investment priorities on a timely basis. |
- The company seeks to explore other revenue streams and international sales to reduce individual market dependency. |
Health, safety and environmental |
The safety of employees, customers and visitors to our premises is of critical importance. As a business with a range of activities the company is exposed to a number of health and safety risks. The company is committed to adhering to environmental standards set by governments and other organisations. It recognises that an environmental incident could impact on the community in which we operate. Furthermore, the environmental performance and reputation of our products may affect customer demand and the environmental performance of our operations impact profitability and efficiency. |
To mitigate these risks: |
- We are committed to achieving the highest standards. We conduct regular audits to ensure compliance with relevant laws and regulations. We review both incidents and 'near misses' to establish their root cause. |
- We have a health and safety executive committee with a focus on these aspects of the business. |
- We follow well-established frameworks for Health & Safety with clear policies, procedures and audits in place. |
- We work with a third-party health and safety company, providing professionally qualified Health & Safety Consultants to review and continuously improve our working practices. |
- We maintain a training programme for all employees with a focus on Health & Safety aspects. |
Legal and regulatory |
Compliance with laws and regulations is fundamental to the company's success. Changes to laws and regulatory requirements remain a source of both risk and opportunity throughout the company. |
To mitigate these risks: |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
- The company is committed to compliance with relevant laws and regulations and sees this compliance as central to the operations. |
- We monitor the legal and regulatory environment within the countries in which we operate and maintain dialogue with relevant regulatory bodies. We take specialist public policy advice, if required. Managers are tasked with ensuring that employees are aware of and comply with regulations and laws specific to their roles. |
People |
The company requires skilled people to enable it to develop fully and exploit new opportunities. A failure to recruit quality personnel in a competitive market and develop existing talent might in time erode our competitive advantage. Further, a failure to plan adequately for succession could also damage the future prospects of the company. |
To mitigate these risks: |
- The company undertakes annual reviews of its employees and considers succession plans and personal development plans. The board is kept updated on key issues. |
- Remuneration packages including fixed, variable and long-term elements and compensation arrangements are regularly benchmarked to ensure the company's remuneration policy remains in line with market practice. |
Supply Chain |
The company's operations require the timely supply of quality products and materials. Supply chain disruptions can adversely impact the company. Such disruptions include the failure of key suppliers. Quality issues in the supply chain can also adversely impact the company as faulty or substandard products are unacceptable. |
To mitigate these risks: |
- We closely monitor our supply chain and employ a range of strategies to reduce reliance on individual suppliers and minimise the impact of potential supplier failures. |
Foreign currency risk |
The company's main transaction exposures are in respect of the movement in exchange rates on purchases of goods that are not denominated in sterling. These are mainly imports which are denominated in US Dollars or Euros. To mitigate this, the currency exchange rates are reviewed on a regular basis and forward currency contracts may also be used to reduce exposure to variability of foreign exchange rates. |
Liquidity and funding risk |
The company is financed by its parent company Fired Earth Holdings Limited, and ultimate controlling party Simon Lousada. The company has received funding from Lousada PLC (a group company) to support trading losses and capital investments in accordance with its business plan. The board is confident that the company can return to an operating profit in the near future. |
Interest rate and cash flow risk |
The company's interest rate risk will be determined by changes in the financial markets and the company will continue to analyse its interest rate exposure on a regular basis. |
Credit and price risk |
The company monitors closely the availability of trade finance to its customers and suppliers. In addition, the ability of our suppliers to maintain credit insurance on the company and its principal operations is an important issue. We have excellent relationships with our suppliers and we continue to work closely with them on a normal commercial basis. There are no significant concentrations of credit risk within the company. The maximum credit risk exposure relating to financial assets is represented by their carrying value as at the balance sheet date. |
The company's operations are exposed to risk in the price movement of key raw materials and shipping costs. The company continues to review exposure to any remaining commodity risk and mitigates these risks wherever possible. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
FUTURE DEVELOPMENTS |
The directors are confident that the business will return to an operating profit and that growth is achievable in the future. The company continues to benefit from a strong brand awareness. We continue to review our systems and internal processes to drive operational efficiencies. |
Fired Earth Limited is owned by Fired Earth Holdings Limited which is part of a group of companies owned by Simon Lousada. We benefit from the financial support of the group. |
ON BEHALF OF THE BOARD: |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
The directors present their report with the financial statements of the company for the year ended 30th September 2024. |
DIVIDENDS |
No dividends will be distributed for the year ended 30th September 2024. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1st October 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
1. Disabled persons |
All applications for employment from disabled persons are given proper consideration and those recruited receive training, career development and promotion as their case warrants. Special attention is given to the particular needs of individuals who become disabled whilst employed by the company; including redeployment to other work if that is necessary and practicable. |
2. Employee participation |
The company has developed individual, mainly informal, methods of communication. Employees are provided with information relevant to the negotiations of terms and conditions, rationalisation and development of facilities and products. These communications are supplemented by an internal intranet. |
3. Creditor payment policy |
The company is responsible for establishing appropriate policies with regard to the payment of their suppliers. The company agrees terms and conditions under which business transactions with suppliers are conducted. It is company policy that, provided a supplier is complying with the relevant terms and conditions, including the prompt and complete submission of all specified documentation, payment will be made in accordance with agreed terms. It is company policy to ensure that suppliers know the terms on which payment will take place when business is agreed. |
The company's trade creditors at year end equated to 33 days (2023: 31) of related purchases. |
4. Going concern |
The company has reported a loss for the year and net liabilities as at 30 September 2024. The accounts have been prepared on the going concern basis, and the directors consider that this is appropriate because of the support from the Lousada group. |
As at the point of authorising the accounts, and for the foreseeable future, the directors consider the going concern assumption to still be appropriate. The directors acknowledge that given the currently rapidly changing business and social environment, there are likely to be significant unknown factors which may present themselves. Such factors are considered by the directors to represent a general inherent level of risk in relation to the going concern assumption albeit not quantifiable at this time. |
5. Directors' qualifying third party indemnity provisions |
The company has granted an indemnity to its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. |
6. Risks and uncertainties |
In accordance with the Companies Act 2006 section 414c\ii), the disclosure of the principal risks and uncertainties has been included in the Strategic Report. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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 and then apply them consistently; |
- | make judgements 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 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, HW Bedford Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FIRED EARTH LIMITED |
Opinion |
We have audited the financial statements of Fired Earth Limited (the 'company') for the year ended 30th September 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, 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). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 30th September 2024 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FIRED EARTH LIMITED |
Matters on which we are required to report by exception |
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 Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page eight, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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: |
* Identifying and assessing the controls management has in place to prevent and detect fraud; |
* Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; |
* Challenging assumptions and judgments made by management in its significant accounting estimates and judgments pertaining to the assessment and evaluation of potential fixed asset impairment indicators, fixed asset dilapidation estimates and deferred tax recognition. |
* Identifying and testing journal entries, in particular journal entries posted with unusual account combinations; and |
* Assessing the extent of compliance with the relevant laws and regulations. |
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusions. |
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 Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FIRED EARTH LIMITED |
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 a Report of the Auditors 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 |
First Floor, Woburn Court |
2 Railton Road |
Woburn Rd Ind Est |
Kempston |
Bedfordshire |
MK42 7PN |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
STATEMENT OF COMPREHENSIVE |
INCOME |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
2024 | 2023 |
Notes | £ | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
10,366,441 | 9,467,734 |
(1,710,361 | ) | (1,516,305 | ) |
Other operating income |
OPERATING LOSS | 5 | ( |
) | ( |
) |
Interest payable and similar expenses | 8 | ( |
) | ( |
) |
LOSS BEFORE TAXATION | ( |
) | ( |
) |
Tax on loss | 9 |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
BALANCE SHEET |
30TH SEPTEMBER 2024 |
2024 | 2023 |
Notes | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 14 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 17 | ( |
) | ( |
) |
NET LIABILITIES | ( |
) | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Share premium | 19 |
Retained earnings | 19 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
The financial statements were approved by the Board of Directors and authorised for issue on |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1st October 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 30th September 2023 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 30th September 2024 | ( |
) | ( |
) |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
1. | STATUTORY INFORMATION |
Fired Earth Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £. |
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
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. |
Critical accounting judgements and key sources of estimation uncertainty |
The prevarication of financial statements requires management to make estimates and judgements that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. |
Actual results may differ from these estimates under different assumptions and conditions. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. It also requires management to exercise its judgements in the process of applying the company's accounting policies. |
Provision is made for the estimated liability on all products still under warranty based on historical experience. Provision is also made for goods returned based on the historical experience of management. Provision is made for onerous lease contracts where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. |
Provision is also made for the fixed asset impairments where the future economic benefit of the shop fittings relating to onerous leased shops is expected to be lower than the net book value of assets. This required management to exercise its judgement in calculation of these provisions. |
Turnover |
Turnover which excludes valued added tax represents the invoiced value of goods and services supplied to customers. Revenue is recognised from the sale of goods when the significant risks and rewards of ownership of the goods have passed to the buyer and can be readily measured. This is deemed to be when the goods have been despatched and the title has passed to the customer. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets are stated at cost, net of depreciation and any provision of impairment. |
Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life: |
Short leasehold | - Over 50 years or the period of the lease |
Plant, machinery, office equipment and shop fittings | - Straight line over 3 years and straight line over 10 years |
The carrying value of tangible fixed assets is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present location and condition. Cost is calculated using the first-in, first-out formula. Provision is made for damaged, obsolete and slow-moving stock where appropriate. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The Company 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 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 debtors, are initially measured at transactions price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. |
Other financial assets |
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price.Such assets are subsequently carried at fair value nd 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. |
Impairment of financial assets |
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date. |
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss. |
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed when the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit and loss. |
Classification of financial liabilities |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Basic financial liabilities |
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
2. | ACCOUNTING POLICIES - continued |
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
Other financial liabilities |
Other financial liabilities, including debt instruments that do not meet the definition of a basic financial instrument, are measured at fair value through profit or loss. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Provisions |
Provisions are made for the estimated liability on all products still under warranty. Product warranties of up to twelve months are given, where appropriate. Other provisions relate to minor legal and other claims and other costs from third parties and are provided for when a legal or constructive obligation arises, as a result of a past event and it is probable that an economic benefit will be required to settle the obligation. Provision has also been made to make good any dilapidations on leased shops during their rental period. |
Provision is made for onerous lease contracts where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
The company has reported a loss for the year and net liabilities as at 30 September 2024. The accounts have been prepared on the going concern basis, and the directors consider this is appropriate because of the support provided from the Lousada Group. |
As at the point of authorising the accounts, and for the foreseeable future, the directors consider the going concern assumption to still be appropriate. The directors acknowledge that given the currently rapidly changing business and social environment, there are likely to be significant unknown factors which may present themselves. Such factors are considered by the directors to represent a general inherent level of risk in relation to the going concern assumption albeit not quantifiable at this time. |
3. | TURNOVER |
The turnover and loss before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2024 | 2023 |
£ | £ |
United Kingdom |
Europe |
Rest of the world | 92,222 | 78,918 |
4. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2024 | 2023 |
Selling and distribution | 119 | 115 |
Administration | 25 | 25 |
2024 | 2023 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
4. | EMPLOYEES AND DIRECTORS - continued |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2024 | 2023 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
5. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) |
Foreign exchange differences | ( |
) |
6. | AUDITORS' REMUNERATION |
2024 | 2023 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's financial statements |
20,000 |
26,000 |
7. | EXCEPTIONAL ITEMS |
2024 | 2023 |
£ | £ |
Exceptional items | (39,851 | ) | 264,438 |
Net exceptional cost of £39,851 were incurred in the year ended 30 September 2024 broken down as follows: |
(£85,362) | Onerous lease provision and other provision adjustments |
£125,213 | Fixed asset impairment |
In the prior year net exceptional income of £264,438 was received relating to onerous lease provision, fixed asset impairments, other provision adjustments, a release of advanced credit deposits.and consultancy costs relating to a strategic review. |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Bank interest | ( |
) | ( |
) |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
2024 | 2023 |
£ | £ |
Deferred tax |
Tax on loss |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Loss before tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2023 - |
( |
) |
( |
) |
Effects of: |
Expenses not deductible for tax purposes | ( |
) |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Deferred tax | - | 15,305 |
Losses carried forward | 420,973 | 599,779 |
Total tax charge | - | 15,305 |
The company has estimated trading losses of £3,768,520 (2023 - £3,330,782) available for carried forward against future trading profits. A deferred tax asset of £942,130 (2023 - £832,696) has not been provided due to the uncertainty of sufficient taxable profits in the foreseeable future. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
10. | TANGIBLE FIXED ASSETS |
Short | Plant and |
leasehold | machinery | Totals |
£ | £ | £ |
COST |
At 1st October 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 30th September 2024 |
DEPRECIATION |
At 1st October 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
Impairments |
At 30th September 2024 |
NET BOOK VALUE |
At 30th September 2024 |
At 30th September 2023 |
Shop fittings relating to onerous leased shops have been impaired by £125,213 (2023 - £36,878) in the year ended 30 September 2024, the impairment has been included in net exceptional costs. |
Shop fittings are depreciated over the term of the lease, however due to lease extensions during the year the economic life of some of the assets have been extended to be in line with the revised lease end date. As a result of this, depreciation charges totalling £Nil (2023 - £155,648) have been written back to the profit and loss accounts in the year ended 30 September 2024. |
11. | STOCKS |
2024 | 2023 |
£ | £ |
Stocks |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Trade debtors |
Doubtful debt provision | (13,000 | ) | (17,000 | ) |
Amounts owed by group undertakings |
Amounts owed by associates |
Deferred tax asset |
Prepayments and accrued income |
The balance outstanding with group entities in prior year were reclassed to amounts owed by associate companies. |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Amounts owed to associates | 132,864 | 111,582 |
Social security and other taxes |
VAT | 456,118 | 336,337 |
Other creditors |
Accrued expenses |
Part of the balance outstanding with group entities in prior year were reclassed to amounts owed to associate companies. |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2024 | 2023 |
£ | £ |
Amounts owed to group undertakings |
15. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2024 | 2023 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
16. | SECURED DEBTS |
There is a fixed and floating charge on assets of Fired Earth Limited for the debenture issued by the parent company of Fired Earth Limited. |
There is a further fixed charge on the bank deposit held by Lloyds Bank Plc that is held in the name of Fired Earth Limited. |
17. | PROVISIONS FOR LIABILITIES |
2024 | 2023 |
£ | £ |
Other provisions | 1,645,044 | 1,730,406 |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
17. | PROVISIONS FOR LIABILITIES - continued |
Deferred | Other |
tax | provisions |
£ | £ |
Balance at 1st October 2023 | ( |
) |
Credit to Statement of Comprehensive Income during year | ( |
) |
Balance at 30th September 2024 | ( |
) |
Dilapidation provision | Warranty provision | Other provision | Onerous lease provision | Total |
£ | £ | £ | £ | £ |
At beginning of the year | 891,258 | 9,000 | 21,000 | 809,148 | 1,730,406 |
Utilised in the year | - | - | - | - | - |
Transferred from Accruals | - | - | - | - | - |
(Credit)/charge in the year | 6,227 | 2,000 | (2,000 | ) | (91,589 | ) | (85,362 | ) |
Total | 897,485 | 11,000 | 19,000 | 717,559 | 1,645,044 |
Dilapidations provision |
The company's shops leases are reviewed annually to ensure an adequate dilapidations provision is held. |
Warranty Provision |
Provision is made for the estimated liability on all products still under warranty. Product warranties of up to 12 months are given, where appropriate for the company's main products. |
Other provisions |
Other provisions relate to a provision for goods returned which should be realised in the next accounting period. |
Onerous lease provisions |
Onerous lease provisions are made where leasehold shops become vacant or loss-making and the company provides for all associated costs, net of anticipated income, to the end of the lease or the anticipated date of the disposal or sublease. The provision is expected to be utilised over the life of the related lease. |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
A Ordinary Share | £0.10 | 9,300 | 9,300 |
B Ordinary Share | £0.10 | 490 | 490 |
9,790 | 9,790 |
FIRED EARTH LIMITED (REGISTERED NUMBER: 01733704) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30TH SEPTEMBER 2024 |
19. | RESERVES |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1st October 2023 | ( |
) | (1,431,863 | ) |
Deficit for the year | ( |
) | ( |
) |
At 30th September 2024 | ( |
) | (3,092,385 | ) |
20. | ULTIMATE PARENT COMPANY |
The immediate parent company is Fired Earth Holdings Limited. The ultimate parent company is Lousada Holdings Limited. The ultimate controlling party is Simon Lousada by virtue of his majority shareholdings on Lousada Holdings Limited. |
21. | RELATED PARTY DISCLOSURES |
During the year the company was loaned £800,000 (2023 - £2,240,000) by Lousada PLC a company in the group. At the year end the company owed £4,000,000 (2023 - £3,200,000). There was no interest charged on this loan. |
The company was provided services from Form Midlands Limited (FML), a company in the group, amounting to £20,452 (2023 - £32,489). There were also recharged costs from FML amounting to £1,448 (2023 - £1,615). At the year end the company owed £7,262 (2023 - £1,643). |
The company also was provided services from Grand Union Twymill Limited, a company in which Mr S Lousada is a director, amounting to £308,735 (2023 - £324,074). At the year end the company owed £91,500 (2023 - £67,565). |
The company also was provided services from Lousada (London) Limited, a company in the group, amounting to £120,000 (2023 - £160,000). At the year end the company owed £nil (2023 - £48,000). |
The company also was provided services from Grand Union Twymill Developments Limited (GUTDL), a Company in which Mr S Lousada is a director, amounting to £27,184 (2023 - £40,363). There were also recharged costs from GUTDL amounting to £31,779 (2023 - £52,734). At the year end the company was owed £2,423 (2023 - £7,236). |
The company had shares issued to Fired Earth Holdings Limited (FEHL), a company in the group, of 979 shares at 10p each. The company also was loaned £nil (2023 - £631,476) from FEHL. The company also made payments of £nil (2023 - 2,323,579). There were also recharged costs from FEHL amounting to £nil (2023 - £48). At the year end the Company was owed £9,794 (2023 - £9,697). |
The company also provided services to Mr S Lousada, the ultimate owner of the group, amounting to £45,544 (2023 - £32,182). |
22. | POST BALANCE SHEET EVENTS |
On 6th November 2024 the company issued a further 93,000 Ordinary £0.10 B Shares. |