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Registered number:
FOR THE YEAR ENDED 31 OCTOBER 2024
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CASTELL HOWELL FOODS LIMITED
COMPANY INFORMATION
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CASTELL HOWELL FOODS LIMITED
CONTENTS
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
The directors present their strategic report for the year ended 31 October 2024. The Castell Howell Group consists of the following companies: Company Activity Castell Howell Foods Limited Wholesale and distribution of food and related products Celtica Foods Limited Butchery division Farmfresh Fillings Limited Fresh goods division Celtic Coast Fish Company Limited Fish division Llandeilo Bakers Limited Bakery division Upton Farm Frozen Food Limited Wholesale and distribution of frozen food Bwydydd Conwy Limited Dormant The key financial highlights are as follows:
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
Despite the poor weather during much of spring and summer 2024, coupled with the ongoing effects of food, energy, and labour inflation on customers, group turnover increased by £30m (15%) on 2023, reaching £231m for the year. The core food wholesale company saw significant gains in public sector contracts during the first half of the year, as well as particularly strong growth in the hospitality and catering sectors across North Wales. Profit before tax however decreased from £17.3m to £15.8m, a reduction partly due to a near 20% increase in labour costs, around half of which was attributable to an increase in headcount, and also as a result of reduced gross margin. The latter reflected the higher proportion of public sector trade and the need to increase pricing support across the core customer base to mitigate the ongoing inflationary cost pressures.
In April 2024, the group acquired Upton Farm Frozen Foods Ltd, based in Pembroke Dock, which extends our reach into South Pembrokeshire. Upton continues to operate as a separate entity within the Castell Howell group, joining other associate companies including, Celtica Foods, Celtic Coast Fish, Farmfresh Cooked Meats and Llandeilo Bakers. These businesses have made significantly increased contributions to group profitability and have further enhanced the uniqueness of our product offering, complimenting our extensive range of Welsh products as well as the wider UK and international product offering. Although sales growth has been strong, the Company has faced increasing constraints due to a shortage of warehouse space. To address this, we purchased the freeholds of Ty Gelert at Porthmadog and Merthyr Cold Stores during the year. Work is also nearing completion on a new maintenance facility and additional lorry parking at Cross Hands. In total, over £11m has been invested in new assets, including £4.2m in additions to the vehicle fleet. The outlook for the 2025 financial year ahead remains positive, with significant opportunities for growth across all areas of operation. However, profits are expected to decline moderately due to continued pressure on margins and labour costs. Specifically, the increase in the employer National Insurance (NI) rate and the reduction in the NI threshold, are expected to raise labour costs by approximately 2.5%. We are actively exploring various ways to mitigate the impact of these increases on the group including the introduction of salary sacrifice on employee pension contributions. However, improved productivity through continued process improvements and strategic investments in capacity and technology, including the adoption of AI to automate certain processes, is expected to provide the most effective mitigation to increasing labour costs in the long run, with work on these initiatives already underway. Subject to planning permission, we anticipate beginning construction of a new 90,000 square foot warehouse at Cross Hands by the end of 2025. This will provide long-term capacity for our hub operation and, alongside the premises at Porthmadog and Merthyr, will alleviate the current space constraints. Additionally, land was acquired at the start of the 2025 financial year at Cross Hands Business Park, designated for additional cooked meats processing capacity.
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The group's activities are subject to certain risks which are monitored closely by the directors.
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
This section sets out how the Board of Directors have performed their duty under section 172 of the Companies Act 2006 and specifically how the Board have acting in good faith to promote the success of the company and group as a whole, having regard to all the company and group's stakeholders.
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
Castell Howell is a family run company, operating for over 30 years. Our ethos has always been to maximise the benefit of the company and group's activities and success for its wider stakeholders, rather than just its shareholders' interests. This is considered in both short-term operational decisions and the company's longer term plans.
The group's key stakeholders are its:
1. Employees 2. Customers 3. Suppliers 4. The local community 5. The local environment 6. Shareholders The Board's decision making process and strategy setting considers not only the financial impact of decisions on the group, but the impact of such on the group's key stakeholders. Separate communication to shareholders is unnecessary as all shareholders are directors of the company. Where there are conflicts of interests of decisions between different stakeholder groups, the Board priorities the interests of long term financial stability and employee interests. Our customers and suppliers are key stakeholders and the Board fosters relationships by: - Promoting customer care and quality of service throughout the group; - Ensuring a wide range of product lines, with sales representatives proactively advising on new products and alternatives; - Promoting product and menu development; - Seeking to source products from local suppliers and promoting Welsh produce; - Maintaining a balance between fair procurement and pricing policies whilst maintaining competitive selling prices. Supporting the local community has always been a key aim of the group, with regular donations and sponsorship being paid to local community groups and sporting teams. The Castell Howell Foods Charitable Foundation was registered within the year and this charity has well defined objectives under a number of key pillars, to support various groups within the community. The group has made a donation of £250,000 to the charity, in addition to its ongoing regular donations to local community groups.
In April, the Company acquired Upton Farm Frozen Foods Ltd, based in Pembroke Dock, which extends our reach into South Pembrokeshire. Upton continues to operate as a separate entity within the Castell Howell group, joining other associate companies including, Celtica Foods, Celtic Coast Fish, Farmfresh Cooked Meats and Llandeilo Bakers. These businesses have made significantly increased contributions to group profitability and have further enhanced the uniqueness of our product offering, complimenting our extensive range of Welsh products as well as the wider UK and international product offering.
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The group's principal financial instruments comprise bank balances, bank loans, trade debtors and creditors, directors' loans and finance lease agreements. The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations.
The use of financial derivatives is governed by policies approved by the board of directors. The group does not use financial derivatives for speculative purposes. In respect of loans, these comprise loans to and from the directors and loans from financial institutions. The interest rate on the loans from financial institutions is variable, but the monthly repayments are fixed. The group is a lessee in respect of financed leased assets. The liquidity risk in respect of these is managed in the same way as loans. The group is exposed to price risk as a result of its operations, in particular adverse fluctuations in food and fuel prices. Financial instrument risks and their management/mitigation are set out in the summary of principal risks and uncertainties, above.
The group is in the process of completing its maintenance shed and transport yard and is proposing to construct and develop a new warehouse at Cross Hands, with plans to build a new cooked meats factory.
Subject to planning permission, we anticipate beginning construction of a new 75,000 square foot warehouse at Cross Hands by the end of 2025. This will provide long-term capacity for our hub operation and, alongside the premises at Porthmadog and Merthyr, will alleviate the current space constraints. Additionally, land has been acquired at the start of the new financial year at Cross Hands Business Park, designated for additional cooked meats processing capacity.
Equal opportunities
The group is committed to promoting equal opportunities in employment. Job applicants will receive equal treatment regardless of age, disability, gender reassignment, marital or civil partner status, pregnancy or maternity, race, colour, nationality, ethnic or national origin, religion or belief, sex or sexual orientation. Employment of disabled persons Initial employment and progression within the group is solely on the basis of personal ability and competence. All practicable steps will be taken to accommodate disabled persons when considering applications for employment, training and progression within the group. Harassment The group operates a policy that it or its employees will not unlawfully discriminate against or harass other people including current and former staff, job applicants, clients, customers, suppliers and visitors. This applies in the workplace and outside the workplace. This includes sexual harassment and other unwanted conduct. Communication The group will take every step to communicate to all staff with particular respect to its products, services, and plans for the future, etc. It also encourages staff to express their views in terms of suggestions and opinions.
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
Castell Howell's operational landscape is defined by a network of distribution hubs and a Cash & Carry facility, all of which are integral to providing our customers with the best service possible.
It's important to note that whilst our manufacturing sites are diligently tracked for environmental impact, they currently fall below the reporting threshold. However, due to the continuous growth within our manufacturing operations, we envisage that future iterations of our carbon reporting and reduction plans will include detailed progress and initiatives within these sites as we recognise their environmental impact will likely become more significant. Therefore, the data captured within our current emission reports focuses on our distribution and Cash & Carry operations only. At the heart of our operations lies the Cross Hands headquarters, a facility that operates 24 hours a day. This continuous operation naturally translates to significant energy consumption across a range of equipment. Notably, the building's infrastructure relies on a decentralised control system, meaning that HVAC and other plant items operate either continuously or via localised, manual controls. However, we have implemented key efficiency measures. For instance, office air conditioning units are now equipped with motion sensors, reducing energy waste by deactivating fan coils during periods of inactivity. Furthermore, automated lighting systems have been installed at the dry goods store, freezers, offices and main office corridors. The refrigeration infrastructure at Cross Hands, essential for maintaining our frozen and chilled storage, operates 24/7. To mitigate energy losses, high-speed automatic doors have been installed, and continuous dehumidification systems have optimised freezer defrosting cycles. It is also important to note that the Cross Hands site is the hub for the largest proportion of our lorry fleet. Fuel usage from these vehicles, across all sites, is tracked by the litre, via electronic tank monitoring, and/or fuel card transactions. Our satellite depots, strategically located in St Martins (near Oswestry), Avonmouth, Merthyr, and Porthmadog, play a crucial role in our distribution network. With the exception of our Merthyr site, these locations function primarily as cross-docking facilities for our articulated lorries, which transport goods from our HQ overnight. Consequently, St Martins, Avonmouth, and Porthmadog house minimal refrigerant compliances due to their limited need for significant stock storage. Environmental data for these locations is primarily captured through electricity and water usage monitoring. It's worth noting that a significant portion of the workforce at these depots comprises drivers and sales representatives, and each of these sites also maintains a fleet of lorries to facilitate distribution. Our Merthyr depot, fully acquired in FY 23/24, differs from our other cross-docking sites as it also possesses significant stocking abilities, including ambient, refrigerated, and freezer storage. Due to this acquisition, much of the development work to implement energy-efficient technologies, mirroring the successful initiatives at our Cross Hands headquarters and Carmarthen Cash & Carry facility, is currently ongoing during the 24/25 financial year. This investment will allow for greater control over the environmental impact of this facility as these upgrades are rolled out. For our 2023/2024 SECR report, we have calculated two intensity metrics to allow for a comparison of our energy consumption and carbon emissions over time. Comparative to the previous reporting year(s), we have seen a small decrease in both metrics. The smaller than expected decrease is due to enhanced data collation accuracy, particularly with the petrol fuel element. We recognise we are on a journey of continuous improvement with our internal data collation and reporting processes. This improved accuracy and clarity allows us to establish a more robust and reliable baseline for future reporting. Looking ahead, we are committed to reducing our energy consumption and carbon emissions. We are pleased to announce that our carbon accounting partners, Auditel, are finalising our revised short, medium, and long-term carbon reduction plans. These plans will provide a clear roadmap to help us systematically lower our intensity metrics year on year, ensuring sustainable progress towards our environmental goals.
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
ENERGY AND CARBON REPORTING (Continued)
Reporting Methodology All calculations within this report have been conducted in accordance with the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard. The methodology adheres to the five fundamental principles of carbon accounting: Accuracy, Transparency, Completeness, Relevance, and Consistency. Activity data has been comprehensively collected across all relevant sources, and emissions have been calculated using the UK Government’s Department for Energy Security and Net Zero (DESNZ) conversion factors for company reporting of greenhouse gas emissions (version 2024).
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CASTELL HOWELL FOODS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
ENERGY AND CARBON REPORTING (Continued)
This report was approved by the board on 14 July 2025 and signed on its behalf.
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CASTELL HOWELL FOODS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
The directors present their report and the financial statements for the year ended 31 October 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.
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 judgments 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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CASTELL HOWELL FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The principal activities of the group in the year under review were:
Wholesale and distribution of food products: Castell Howell Foods Limited Upton Farm Frozen Foods Ltd Bwydydd Conwy Limited (dormant in the current year) Upton Farm Frozen Foods Limited Manufacture, preparation and wholesale of food products: Farmfresh Fillings Limited Celtica Foods Limited Llandeilo Bakers Limited Celtic Coast Fish Company Limited
The profit for the year, after taxation and minority interests, amounted to £9,841 thousand (2023 - £11,584 thousand).
An interim dividend of £2,200 thousand (2023 - £nil) per share was paid during the year.
The directors who served during the year were:
Included in the group's strategic report is a review of the business, details in relation to the use of financial instruments, employee involvement including the employment of disabled persons, environmental policies, details of important events affecting the company since the year end, and a description of the principal risks and uncertainties facing the group.
The Section 172(1) statement in the Strategic Report summarises stakeholder engagement matters.
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CASTELL HOWELL FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
Further information is disclosed in Note 31 to the financial statements.
The auditor, MHA, previously traded through the legal entity Macintyre Hudson LLP. In response to regulatory changes, Macintyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.
The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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CASTELL HOWELL FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CASTELL HOWELL FOODS LIMITED
We have audited the financial statements of CASTELL HOWELL FOODS LIMITED (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 October 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Company balance sheet, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company 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 Auditor's 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.
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CASTELL HOWELL FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CASTELL HOWELL FOODS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's 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.
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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CASTELL HOWELL FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CASTELL HOWELL FOODS 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 Auditor's 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:
Detecting irregularities The objectives of our audit in relation to fraud are as follows: - to identify and assess the risks of material misstatement of the financial statements due to fraud; - to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; - and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with the directors. Auditor's approach to assessing the risks of material mis statement due to irregularities, including fraud We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK. We assessed the risks of material misstatement in respect of fraud and considered the extent to which non compliance with laws and regulations might have a material effect on the financial statements. Audit procedures designed to respond to the risks of non compliance with laws and regulations Based on the results of our risk assessment, we designed our audit procedures to identify non compliance with such laws and regulations identified above. We made enquiries of senior management of the group of companies to understand how the company is complying with those frameworks. Audit procedures performed by the engagement team also included a review of the financial statements disclosures to underlying supporting documentation.
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CASTELL HOWELL FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CASTELL HOWELL FOODS LIMITED (CONTINUED)
Audit procedures designed to respond to the risks of fraud We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by means of developing an understanding the company's controls and discussing with management the perceived risks and garnering where they considered there was susceptibility to fraud. Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud. As well as adopting an attitude of professional scepticism, we have obtained information for use in identifying the risk of fraud when performing risk assessment procedures and performed the following procedures in light of the risk of fraud : - Discussion amongst the group engagement teams regarding the susceptibility of the client to fraud; - Consideration of the risk of fraud when documenting and testing internal controls; - Enquiring of management how they: assess the risk of fraud; identify and respond to the risks of fraud; - Enquiring of management and directors whether they have any knowledge of actual or suspected fraud; - Remaining alert to inconsistent or contradictory information and obtaining evidence to support information provided. Management override of controls We considered the risk of fraud through management override and, in response, we incorporated testing of manual journal entries into our audit approach. The audit engagement team performed journal entry testing using a risk based approach and evaluated whether there was evidence of bias, with a focus on any journals indicating large or unusual transactions, non routine journals and journals processed for before and after the accounting reference date. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves 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 Auditor's report.
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CASTELL HOWELL FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CASTELL HOWELL FOODS LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Swansea, United Kingdom MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542)
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CASTELL HOWELL FOODS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2024
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CASTELL HOWELL FOODS LIMITED
CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2024
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CASTELL HOWELL FOODS LIMITED
REGISTERED NUMBER: 02269053
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 OCTOBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
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CASTELL HOWELL FOODS LIMITED
REGISTERED NUMBER: 02269053
COMPANY BALANCE SHEET
AS AT 31 OCTOBER 2024
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CASTELL HOWELL FOODS LIMITED
REGISTERED NUMBER: 02269053
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 OCTOBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 29 to 52 form part of these financial statements.
Page 23
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