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Registered number: 12361523









Cleopatra UK Bidco Limited









Annual Report and Consolidated Financial Statements

For the Year Ended 31 December 2022

 
Cleopatra UK Bidco Limited
 
 
Company Information


Directors
P J Cheshire 
D Jacobs 




Registered number
12361523



Registered office
Unit 12
Oak Green Stanley Green Business Park

Cheadle Hulme

Cheadle

Cheshire

SK8 6QL




Independent auditors
Hurst Accountants Limited

3 Stockport Exchange

Stockport

SK1 3GG





 
Cleopatra UK Bidco Limited
 

Contents



Page
Group Strategic Report
 
1 - 3
Directors' Report
 
4 - 6
Independent Auditors' Report
 
7 - 10
Consolidated Statement of Comprehensive Income
 
11
Consolidated Balance Sheet
 
12
Company Balance Sheet
 
13
Consolidated Statement of Changes in Equity
 
14
Company Statement of Changes in Equity
 
15
Consolidated Statement of Cash Flows
 
16 - 17
Consolidated Analysis of Net Debt
 
17
Notes to the Financial Statements
 
18 - 43


 
Cleopatra UK Bidco Limited
 
 
Group Strategic Report
For the Year Ended 31 December 2022

Introduction
 
The directors present the Group Strategic Report for the period ended 31 December 2022.

Business review
 
The Group owns a variety of own brand, international retailers of luxury hair solutions, including human hair, styling tools and aftercare products across multiple jurisdictions, including the United Kingdom, Germany, Canada and more recently Australia. The Group trades internationally across multiple channels including direct-to-salon, direct-to-consumer and distributors through the Group’s own web platform, sales representatives and phone orders.
The Group delivered turnover of £88.8m in the year ended 31 December 2022 (
2021: £81.1m) representing absolute growth of 9.5% on the prior year. The Group continued to benefit from its robust business model during the year, adapting to the continuing challenges both the Group, and retail as a sector, has faced during recent years, increasing revenue across all channels within the business with an increasing diversity in product mix and international coverage as the business continues to expand and evolve. 
During this difficult economic climate, the Group has seen continued pressure on the price of raw materials worsened by the strengthening of the US Dollar during the year. Despite this, the Group has maintained a strong level of profitability with gross margin of 44% (
2021: 46%). The Group has seen a reduction in the cost pressure faced on inbound freight during the Covid-19 pandemic and continues to focus on maximising efficiencies in the way the Group imports goods from overseas. The operating loss during the year ended 31 December 2022 was £22.3m (2021: profit of £30.4k), primarily due to a significant impairment of goodwill during the period driven by a decline in trading in the Zala brand based in Australia which Management have observed a continuation of performance of into the post year end period with no material signs of improvement at this stage. 
The Group has continued to invest in people as the business grows, further investing in key senior appointments during 2022 to ensure the Group is well placed to support its ambitious growth plans as part of the Group’s long-term strategy. During the year, the Group has continued to integrate further, implementing group wide operational practices, including processes and controls across all departments within the business.
2023 saw continued investment in the Group and the launch of new products and technologies. This will continue to deliver on the market share which the business holds, whilst allowing the Group to continue targeting new markets.
Prior period adjustment
During the current financial year, the Group has processed several prior year adjustments to correct errors identified in the previously issued financial statements. These adjustments have been made in accordance with FRS 102 Section 10 Accounting Policies, Estimates and Errors, and the comparatives have been restated accordingly. A summary of the adjustments is provided in note 28 of the accounts.
The completion of the financial statements for 2022 has been delayed due to the extended timeline required to meet international statutory reporting obligations. The primary factor contributing to this delay is the ongoing goodwill and impairment review within the Group's German operations. This review is subject to complex regulatory and audit requirements, which have necessitated additional time to ensure full compliance and accuracy.

Page 1

 
Cleopatra UK Bidco Limited
 

Group Strategic Report (continued)
For the Year Ended 31 December 2022

Principal risks and uncertainties
 
Operational and compliance risks are constantly being monitored and procedures are being implemented to address issues as they arise.  The Group is committed to building organisational resilience with the capability of providing effective responses, as well as identifying risk-based opportunities.
Financial risks relating to currency exposure are closely monitored and mitigated where possible in line with the Group’s FX strategy.  
Credit risk is constantly monitored and credit limits are under constant review.
Reputational and strategic risks have been reduced with the support of the Beauty Industry Group, to which the Company and its trading subsidiary, Ecotrade Europe Limited, belong with emphasis being on increasing the variety of quality products and widening the Group's client base.
The rising cost of air freight and materials, coupled with the uncertainty related to consumer sentiment, particularly human hair coupled with the global pandemic and restrictions in place surrounding personal contact have been the principal risks to the Group and will continue into 2023 and beyond.
The Group is able to attract and retain high calibre employees and investment is made in the IT systems to ensure that they are able to continue to respond to the needs of the business and do not become obsolete.

Financial key performance indicators
 
The Group's key performance indicators are presented below:

2022
2021
%
£



Gross margin %
44
46

EBITDA %
5
10

Page 2

 
Cleopatra UK Bidco Limited
 

Group Strategic Report (continued)
For the Year Ended 31 December 2022

Directors' statement of compliance with duty to promote the success of the Group
 
The directors are collectively responsible under section 172 of the UK Companies Act to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders as a whole and to take into account wider stakeholder needs when doing so. In its considerations and decision-making processes the Board therefore has regard to certain key matters including, but not limited to, the long-term impact of the Company’s operations on local communities and the environment and the need to preserve the Company’s reputation for high standards of business conduct.
 
Our employees are key to the delivery of our services and therefore to the long-term success of the business. It is imperative to keep them actively engaged and motivated. Regular staff communication and engagement occurs through team meetings and training. 
 
Our global customer base is served through our B2B and D2C channels across our portfolio of own-brands and retail destinations. Understanding our customers and how they like to purchase, discover new products, and be made aware of new trends and solutions is essential for developing our brands and ensuring they are relevant to the markets they operate in. We aim to enable a simplified customer journey, from product discovery to checkout and delivery, which supports our consistently strong repeat-purchase rates.
 
The Company partners with suppliers to ensure it can continue to address customers and consumers’ evolving demands. The Board is committed to fostering and developing supplier relationships in a way that empowers the brands we own and those which we work with to drive innovative solutions to consumer demands, while balancing the need to tackle societal and environmental issues.
The Company is continually reviewing its systems and procedures to reduce energy consumption and ensuring they are Streamlined Energy and Carbon Reporting (SECR) compliant.
 
It is critical that shareholders have confidence in the management and operation of the business, and in its long-term strategic objectives. The main shareholders are respected on the board of directors.


This report was approved by the board and signed on its behalf.




................................................
P J Cheshire
Director

Date: 17 July 2025

Page 3

 
Cleopatra UK Bidco Limited
 
 
 
Directors' Report
For the Year Ended 31 December 2022

The directors present their report and the financial statements for the year ended 31 December 2022.

Directors' responsibilities statement

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 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £26,159,179 (2021 - loss £3,589,270).

The directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

P J Cheshire 
A Hanselman (resigned 31 December 2022)
D Jacobs 

Future developments

2025 will continue to see investment in the group across its brands with the launch of new products and technologies to help enable further growth through international and product expansion. The Group expects market share to continue to increase across future periods as the Group continues to integrate with Beauty Industry Group (“BIG”), aligning on group-wide operational practices, including processes and control to enable further growth opportunities and initiatives.

Page 4

 
Cleopatra UK Bidco Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 December 2022

Greenhouse gas emissions, energy consumption and energy efficiency action

The Group is defined as a large group in line with the Companies Act 2006, and have consumed more than 40,000 kWh of energy in the reporting period therefore hitting the threshold for Streamlined Energy and Carbon Reporting (SECR).
The company has followed the 2019 HM Government Environmental Reporting Guidelines and have also used the GHG Reporting Protocol – Corporate Standard and have used the 2022 UK Government's Conversion Factors for Company Reporting.
UK Greenhouse gas emissions and energy use data for the period 1 January 2022 to 31 December 2022:


           2022 
Energy consumption used to calculate emission (kWh)     268,548 kWh
Total Gross Emissions in metric tonnes CO2e      25.8  tCO2e
Intensity Ratio Tonnes CO2e per headcount      0.56  tCO2e
Comparative information for 2021 is not available as the Group was not collecting the data to meet these regulations at the time. The prior year audit opinion was qualified in this respect.

In the year the total energy consumption equated to 268,548 kWh across the UK company which was made up of gas, electricity and fuel across the head office site, the company warehouse, and delivery vehicles.
The Group continues to review areas whereby energy efficiency can be improved such as increased video conferencing technology for staff meetings, to reduce the need for travel between sites.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 5

 
Cleopatra UK Bidco Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 December 2022

This report was approved by the board and signed on its behalf.
 




................................................
P J Cheshire
Director

Date: 17 July 2025

Page 6

 
Cleopatra UK Bidco Limited
 
 
 
Independent Auditors' Report to the Members of Cleopatra UK Bidco Limited
 

Opinion


We have audited the financial statements of Cleopatra UK Bidco Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2022, 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 policiesThe 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 Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's 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


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's 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.


Other information


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 ReportOur 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.


Page 7

 
Cleopatra UK Bidco Limited
 
 
 
Independent Auditors' Report to the Members of Cleopatra UK Bidco Limited (continued)


Opinion 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 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.


Matters on which we are required to report by exception
 

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.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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 Directors' Responsibilities Statement set out on page 4, 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 is 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 8

 
Cleopatra UK Bidco Limited
 
 
 
Independent Auditors' Report to the Members of Cleopatra UK Bidco Limited (continued)


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 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:

Identifying and assessing potential risks related to irregularities 
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: 
 
The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. 
The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.  
Supporting documentation relating to the Company's policies and procedures for: 
- Identifying, evaluating, and complying with laws and regulations 
 - Detecting and responding to the risks of fraud 
The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. 
The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. 
The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption. 

Audit response to risks identified 
Our procedures to respond to the risks identified included the following: 
 
Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. 
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. 
Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities. 
Enquiring of management about any actual and potential litigation and claims. 
Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud. 
Page 9

 
Cleopatra UK Bidco Limited
 
 
 
Independent Auditors' Report to the Members of Cleopatra UK Bidco Limited (continued)


We have also considered the risk of fraud through management override of controls by: 
 
Testing the appropriateness of journal entries and other adjustments to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. 
Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and 
Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. 
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 them.  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 collusion. 


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.


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 2006Our 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.





Anthony Woodings (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
3 Stockport Exchange
Stockport
SK1 3GG

17 July 2025
Page 10

 
Cleopatra UK Bidco Limited
 
 
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2022

As restated
2022
2021
Note
£
£

  

Turnover
 4 
88,824,891
81,127,887

Cost of sales
  
(49,520,183)
(43,615,570)

Gross profit
  
39,304,708
37,512,317

Administrative expenses
  
(42,536,132)
(39,850,566)

Exceptional administrative expenses
 13 
(21,439,241)
-

Other operating income
 5 
2,386,050
2,368,741

Operating (loss)/profit
 6 
(22,284,615)
30,492

Interest receivable and similar income
 10 
245
41

Interest payable and similar expenses
 11 
(2,136,330)
(2,474,660)

Loss before taxation
  
(24,420,700)
(2,444,127)

Tax on loss
 12 
(1,738,479)
(1,145,143)

Loss for the financial year
  
(26,159,179)
(3,589,270)

  

Foreign exchange reserve movement
  
1,767,076
(312,402)

Merger reserve movement
  
-
(3,477,876)

Other comprehensive income for the year
  
1,767,076
(3,790,278)

Total comprehensive income for the year
  
(24,392,103)
(7,379,548)

(Loss) for the year attributable to:
  

Owners of the parent Company
  
(26,159,179)
(3,589,270)

Total comprehensive income for the year attributable to:
  

Owners of the parent Company
  
(24,392,103)
(7,379,548)

There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.

The notes on pages 18 to 43 form part of these financial statements.

Page 11

 
Cleopatra UK Bidco Limited
Registered number: 12361523

Consolidated Balance Sheet
As at 31 December 2022

As restated
2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 15 
35,741,862
73,413,020

Tangible assets
 16 
780,317
873,506

  
36,522,179
74,286,526

Current assets
  

Stocks
 18 
30,297,242
25,424,270

Debtors: amounts falling due within one year
 19 
41,730,938
41,187,520

Cash at bank and in hand
 20 
9,394,681
8,852,139

  
81,422,861
75,463,929

Creditors: amounts falling due within one year
 21 
(38,529,017)
(48,780,382)

Net current assets
  
 
 
42,893,844
 
 
26,683,547

Total assets less current liabilities
  
79,416,023
100,970,073

Creditors: amounts falling due after more than one year
 22 
(35,314,965)
(33,183,037)

Provisions for liabilities
  

Deferred taxation
  
(739,944)
(33,819)

Net assets
  
43,361,114
67,753,217


Capital and reserves
  

Called up share capital 
 26 
5
5

Share premium account
 27 
99,654,064
99,654,064

Foreign exchange reserve
 27 
1,454,674
(312,402)

Merger reserve
 27 
(28,683,748)
(28,683,748)

Profit and loss account
 27 
(29,063,881)
(2,904,702)

Equity attributable to owners of the parent Company
  
43,361,114
67,753,217


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
P J Cheshire
Director

Date: 17 July 2025

The notes on pages 18 to 43 form part of these financial statements.

Page 12

 
Cleopatra UK Bidco Limited
Registered number: 12361523

Company Balance Sheet
As at 31 December 2022

As restated
2022
2021
Note
£
£

Fixed assets
  

Investments
 17 
86,168,222
115,137,093

Current assets
  

Debtors: amounts falling due within one year
 19 
28,871,739
28,910,569

  
28,871,739
28,910,569

Creditors: amounts falling due within one year
 21 
(13,662,768)
(13,622,768)

Net current assets
  
 
 
15,208,971
 
 
15,287,801

Total assets less current liabilities
  
101,377,193
130,424,894

  

Creditors: amounts falling due after more than one year
 22 
(35,314,965)
(33,182,174)

  

Net assets
  
66,062,228
97,242,720


Capital and reserves
  

Called up share capital 
 26 
5
5

Share premium account
 27 
99,654,064
99,654,064

Profit and loss account brought forward
  
(2,411,349)
(1,816,980)

Loss for the year
  
(31,180,492)
(594,369)

Profit and loss account carried forward
  
(33,591,841)
(2,411,349)

  
66,062,228
97,242,720


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


................................................
P J Cheshire
Director

Date: 17 July 2025

The notes on pages 18 to 43 form part of these financial statements.

Page 13

 
Cleopatra UK Bidco Limited
 

Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2022


Called up share capital
Share premium account
Foreign exchange reserve
Merger reserve
Profit and loss account
Total equity

£
£
£
£
£
£


At 1 January 2021
2
32,110,728
-
(25,205,872)
684,568
7,589,426


Comprehensive income for the year

Loss for the year
-
-
-
-
(3,589,270)
(3,589,270)

Foreign exchange movement
-
-
(312,402)
-
-
(312,402)

Merger reserve
-
-
-
(3,477,876)
-
(3,477,876)

Shares issued during the year
3
67,543,336
-
-
-
67,543,339



At 1 January 2022 (as previously stated)
5
99,654,064
(414,419)
(28,683,748)
(1,072,827)
69,483,075

Prior year adjustment (note 28)
-
-
102,017
-
(1,831,875)
(1,729,858)


At 1 January 2022 (as restated)
5
99,654,064
(312,402)
(28,683,748)
(2,904,702)
67,753,217


Comprehensive income for the year

Loss for the year
-
-
-
-
(26,159,179)
(26,159,179)

Foreign exchange movement
-
-
1,767,076
-
-
1,767,076


At 31 December 2022
5
99,654,064
1,454,674
(28,683,748)
(29,063,881)
43,361,114


The notes on pages 18 to 43 form part of these financial statements.

Page 14

 
Cleopatra UK Bidco Limited
 

Company Statement of Changes in Equity
For the Year Ended 31 December 2022


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2021
2
32,110,728
(1,816,980)
30,293,750


Comprehensive income for the year

Loss for the year
-
-
(594,369)
(594,369)


Contributions by and distributions to owners

Shares issued during the year
3
67,543,336
-
67,543,339


Total transactions with owners
3
67,543,336
-
67,543,339



At 1 January 2022
5
99,654,064
(2,411,349)
97,242,720


Comprehensive income for the year

Loss for the year
-
-
(31,180,492)
(31,180,492)


Total transactions with owners
-
-
-
-


At 31 December 2022
5
99,654,064
(33,591,841)
66,062,228


The notes on pages 18 to 43 form part of these financial statements.

Page 15

 
Cleopatra UK Bidco Limited
 

Consolidated Statement of Cash Flows
For the Year Ended 31 December 2022

As restated
2022
2021
£
£

Cash flows from operating activities

Loss for the financial year
(26,159,179)
(3,589,270)

Adjustments for:

Amortisation of intangible assets
5,057,032
7,691,589

Depreciation of tangible assets
294,591
279,002

Impairments of intangible assets
21,439,241
-

Loss on disposal of tangible assets
1,397,104
800

Interest paid
2,136,330
2,474,660

Interest received
(245)
(41)

Taxation charge
1,738,479
1,145,143

(Increase) in stocks
(4,872,972)
(8,578,721)

Decrease/(increase) in debtors
3,180,268
(6,410,178)

(Increase) in amounts owed by groups
(3,723,686)
(31,321,428)

(Decrease) in creditors
(2,828,106)
(1,371,307)

(Decrease)/increase in amounts owed to groups
(9,670,567)
7,055,075

Corporation tax (paid)
(1,154,560)
(2,021,126)

FX movements
(2,901)
-

Net cash generated from operating activities

(13,169,171)
(34,645,802)


Cash flows from investing activities

Purchase of intangible fixed assets
(339,338)
(1,394,770)

Sale of intangible assets
10,238,123
-

Purchase of tangible fixed assets
(334,822)
(433,067)

Sale of tangible fixed assets
15,317
3,721

Purchase of fixed asset investments
-
(31,005,385)

Interest received
245
41

HP interest paid
(6,029)
(2,215)

Cash acquired on acquisition
-
330,150

Net cash from investing activities

9,573,496
(32,501,525)
Page 16

 
Cleopatra UK Bidco Limited
 

Consolidated Statement of Cash Flows (continued)
For the Year Ended 31 December 2022

As restated

2022
2021

£
£



Cash flows from financing activities

Issue of ordinary shares
-
67,543,336

Other new loans
4,511,443
2,303,522

Repayment of/new finance leases
(5,400)
(6,625)

Interest paid
(2,130,301)
(2,472,445)

Net cash used in financing activities
2,375,742
67,367,788

Net (decrease)/increase in cash and cash equivalents
(1,219,933)
220,461

Cash and cash equivalents at beginning of year
8,847,312
8,626,851

Foreign exchange gains and losses
1,767,076
-

Cash and cash equivalents at the end of year
9,394,455
8,847,312


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
9,394,681
8,852,139

Bank overdrafts
(226)
(4,827)

9,394,455
8,847,312



Consolidated Analysis of Net Debt
For the Year Ended 31 December 2022





At 1 January 2022
Cash flows
Other non-cash changes
At 31 December 2022
£

£

£

£

Cash at bank and in hand

8,852,139

542,542

-

9,394,681

Bank overdrafts

(4,827)

4,601

-

(226)

Debt due after 1 year

(30,803,522)

(2,047,608)

(2,463,835)

(35,314,965)

Debt due within 1 year

(11,159,322)

-

-

(11,159,322)

Finance leases

(6,750)

5,400

-

(1,350)


(33,122,282)
(1,495,065)
(2,463,835)
(37,081,182)

The notes on pages 18 to 43 form part of these financial statements.

Page 17

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

1.


General information

Cleopatra UK Bidco Limited is a Company limited by share capital and incorporated in England and Wales. The address of the registered office and principal place of business is Unit D3 Stanley Green Business Park, Commercial Avenue, Handforth, Cheadle, Cheshire, SK8 6QH.
The nature of the Company's operation and principal activity is that of a holding company.
The Consolidated Financial Statements of the Company as at and for the period ended 31 December 2022 comprise the Company its subsidiaries (together referred to as the ''UK Group'').
The principal activity of the UK Group is the wholesale and retail of hair-related products.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
Where subsidiaries are acquired by the company, the consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. 
Where subsidiaries are acquired by way of a group reorganisation, from another group company, and the relevant conditions are met; the company uses the Merger Accounting method, for consolidation purposes.

Page 18

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.3

Going concern

The consolidated financial statements have been prepared on a going concern basis.
Group
The Group is robust and has a strong financial position, with consolidated net assets totalling £43,361,114 at 31 December 2022 (2021 restated: £67,753,217) and cash totalling £9,394,681 (2021 restated: £8,852,139). The Group meets its working capital requirements through its cash balances and loans/funding from the wider Beauty Industry Group. Based on the Group's forecasts and projections, the directors believe the Group and Company has sufficient facilities to trade through the next twelve months.
The directors believes it is appropriate, therefore, to prepare the consolidated financial statements for the period to 31 December 2022 on a going concern basis and the Group and Company will remain solvent in the twelve months after the date of approval of the financial statements.
Company
The Company has net current assets totalling £15,208,971 at 31 December 2022 (2021 restated: £15,287,801) and financial support has been confirmed by parent undertakings in the Beauty Industry Group to ensure that the Company is able to meet its liabilities as they fall due. The directors therefore consider it appropriate to prepare the financial statements on a going concern basis.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 19

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Government grants

Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.

 
2.9

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 20

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.10

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.11

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

 
2.12

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


Page 21

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.13

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
2.14

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Development costs
-
4
years
Goodwill
-
10
years
Trademarks
-
13
years

 
2.15

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Short-term leasehold property
-
Straight line over the life of the lease
Motor vehicles
-
25% straight line
Fixtures, fittings and equipment
-
15% to 100% straight line
Computer equipment
-
25% to 33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 22

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.16

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.17

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.18

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.19

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.20

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

 
2.21

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.22

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 23

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.23

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
 
Page 24

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)


2.23
Financial instruments (continued)


If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

Page 25

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates that affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the reporting period. Actual outcomes may differ from these judgements, estimates and assumptions. The judgements, estimates and assumptions that have the most significant effect on the carrying value of assets and liabilities of the Group as at 31 December 2022 are discussed below:
Key sources of estimation uncertainty
Provision for impairment loss on trade debtors
Management exercises judgement in providing for impairment losses on trade debtors. Provisions are made for items when management do not consider them to be recoverable. At the year-end, trade debtors totalled £4,929,290 (2021 restated: £4,540,414).
Provision for obsolete and slow moving stocks
Management reviews the Group's stocks to assess loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in profit or loss, the Group makes judgement as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by management. Any provision for slow-moving stock is based on the ageing and historical sales pattern. At the reporting date, stocks held by the Group totalled £30,297,242 (2021 restated: £25,424,270).
Goodwill
Goodwill acquired on business combinations is capitalised on the consolidated balance sheet and amortised over its useful economic life or ten years, whichever is shorter. As highlighted in note 13, an impairment charge of £21,211,028 has been recognised in respect of goodwill arising on consolidation, following a review of the carrying value of a previously acquired subsidiary. The impairment reflects revised assumptions around future sales growth, cost inflation, and discount rates. The charge is non-cash and has no impact on the Group’s operations or financial covenants.
At the year end, the carrying value of goodwill was £27,822,440 (
2021: £64,796,052).

Page 26

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Sale of goods
88,824,891
81,127,887


Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
35,035,267
39,297,057

Rest of Europe
15,689,590
13,110,406

Rest of the world
38,100,034
28,720,424

88,824,891
81,127,887



5.


Other operating income

As restated
2022
2021
£
£

Other operating income
381,350
65,862

Net rents receivable
45,880
29,285

Royalty receivable
1,958,820
2,144,734

Government grants receivable
-
128,860

2,386,050
2,368,741



6.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2022
2021
£
£

Exchange differences
55,593
(264,515)

Other operating lease rentals
843,456
690,090

Page 27

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

7.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2022
2021
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
28,200
42,610

Fees payable to the Company's auditors in respect of:

The auditing of accounts of associates of the Company
18,900
20,720


8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
2022
2021
£
£


Wages and salaries
8,912,294
6,753,443

Social security costs
411,871
354,269

Cost of defined contribution scheme
356,043
112,737

9,680,208
7,220,449


The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Management and administration
22
33



Sales and marketing
86
83



Warehousing and distribution
47
42

155
158

The Company has no employees other than the directors, who did not receive any remuneration.

Page 28

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

9.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
132,010
193,760

Group contributions to defined contribution pension schemes
63,297
1,209

195,307
194,969


During the year retirement benefits were accruing to 1 director (2021 - 1) in respect of defined contribution pension schemes.


10.


Interest receivable

2022
2021
£
£


Other interest receivable
245
41


11.


Interest payable and similar expenses

2022
2021
£
£


Bank interest payable
(2,485)
3,242

Other loan interest payable
2,132,786
2,468,539

Finance leases and hire purchase contracts
6,029
2,879

2,136,330
2,474,660

Page 29

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

12.


Taxation


As restated
2022
2021
£
£

Corporation tax


Current tax on profits for the year
632,912
1,371,018

Adjustments in respect of previous periods
399,442
(194,512)


1,032,354
1,176,506


Total current tax
1,032,354
1,176,506

Deferred tax


Origination and reversal of timing differences
706,125
(31,363)

Total deferred tax
706,125
(31,363)


Tax on loss
1,738,479
1,145,143

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

As restated
2022
2021
£
£


Loss on ordinary activities before tax
(24,420,700)
(2,444,127)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(4,639,933)
(464,384)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
4,832,368
1,455,959

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
517,897
510,418

Adjustments to tax charge in respect of prior periods
399,442
(194,512)

Change in tax rates
1,063
-

Unrelieved tax losses carried forward
420,208
-

Unrelieved loss on foreign subsidiaries
205,350
-

Other differences leading to an increase (decrease) in the tax charge
2,084
(162,338)

Total tax charge for the year
1,738,479
1,145,143

Page 30

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022
 
12.Taxation (continued)


Factors that may affect future tax charges

Corporation tax main rates increased to 25% in the tax year commencing 1st April 2023 for companies whose
profits exceed £250k. A tapered rate was introduced for profits above £50k up to the £250k limit.


International tax reform - Pillar Two model rules

Management of Cleopatra UK Bidco Limited has determined that the Group is not within the scope of OECD’s Pillar Two Model Rules and the exception to the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two income taxes is not applicable to the Group. The Group monitors its impact to the global minimum tax rules for when it comes into effect on a regular basis


13.


Exceptional items

2022
2021
£
£


Impairment of Goodwill
21,211,028
-

Impairment of Trademarks
228,213
-

21,439,241
-

An impairment charge of £21,211,028 has been recognised in respect of goodwill arising on consolidation, following a review of the carrying value of a previously acquired subsidiary. Trademarks have also been impaired by £228,213. 
The impairments reflect revised assumptions around future sales growth, cost inflation, and discount rates. The charge is non-cash and has no impact on the Group’s operations or financial covenants.


14.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the parent Company for the year was £31,180,492 (2021 - loss £594,369).

Page 31

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

15.


Intangible assets

Group (as restated)





Development expenditure
Trademarks
Goodwill
Total

£
£
£
£



Cost


At 1 January 2022
218,559
9,320,321
77,694,198
87,233,078


Additions - internal
339,338
-
-
339,338


Disposals
(7,500)
-
(15,023,321)
(15,030,821)



At 31 December 2022

550,397
9,320,321
62,670,877
72,541,595



Amortisation


At 1 January 2022
37,252
884,660
12,898,146
13,820,058


Charge for the year
91,723
716,948
4,248,361
5,057,032


On disposals
(7,500)
-
(3,509,098)
(3,516,598)


Impairment charge
-
228,213
21,211,028
21,439,241



At 31 December 2022

121,475
1,829,821
34,848,437
36,799,733



Net book value



At 31 December 2022
428,922
7,490,500
27,822,440
35,741,862



At 31 December 2021
181,307
8,435,661
64,796,052
73,413,020

Page 32

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022
 
           15.Intangible assets (continued)

Amortisation of intangible assets is included in administrative expenses.
Goodwill
Goodwill which arose upon the acquisition by the Company of Ecotrade Europe Limited on 19 December 2019 had a carrying value of £27,822,440 as at 31/12/2022 and a remaining amortisation period of just less than 7 years.
Goodwill which arose upon the acquisition by the Company's subsidiary, BIG Aus Co Pty Ltd of Zala Group Pty on 30 April 2021 had a carrying value of £1,056,437 and a remaining amortisation period of just less than 9 years.
An impairment charge of £21,211,028 has been recognised in relation to the goodwill arising from the acquisition of Zala Group Pty by the Company’s subsidiary, BIG Aus Co Pty Ltd, on 30 April 2021. As a result, the carrying value of the goodwill has been reduced to £nil. This non-cash charge reflects updated assumptions regarding future sales growth, cost inflation, and discount rates, following a review of projected performance. It does not impact the Group’s operations, liquidity, or compliance with financial covenants. The impairment has been classified as an exceptional administrative expense (refer to Note 13).
Goodwill arising from the acquisition of trade and assets by a subsidiary prior to its integration into the group was disposed of during the period. The goodwill had a net book value of £11,514,223 at the time of disposal. As a result, a loss of £1,280,564 has been recognised in administrative expenses.
Trademarks
Trademarks which have been separately identified and recognised upon the acquisition by the Company of Ecotrade Europe Limited has a carrying value of £2,961,921 and a remaining amortisation period of just less than 10 years.
Trademarks which have been separately identified and recognised upon the acquisition by the Company's subsidiary, BIG Aus Co Pty Ltd of Zala Group Pty on 30 April 2021 has a carrying value of £4,528,579 and a remaining amortisation period of just less than 12 years.



Page 33

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

16.


Tangible fixed assets

Group






Short-term leasehold property
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2022
190,290
87,090
815,124
518,499
1,611,003


Additions
500
38,515
7,773
288,034
334,822


Disposals
-
(24,100)
-
(134,596)
(158,696)


Transfers between classes
-
-
(397,086)
397,086
-


Exchange adjustments
(609)
-
(1,982)
(3,264)
(5,855)



At 31 December 2022

190,181
101,505
423,829
1,065,759
1,781,274



Depreciation


At 1 January 2022
62,762
17,995
349,040
307,700
737,497


Charge for the year on owned assets
38,482
24,475
60,725
170,909
294,591


Disposals
-
(15,564)
-
(6,811)
(22,375)


Transfers between classes
-
-
(96,408)
96,408
-


Exchange adjustments
145
-
(6,264)
(2,637)
(8,756)



At 31 December 2022

101,389
26,906
307,093
565,569
1,000,957



Net book value



At 31 December 2022
88,792
74,599
116,736
500,190
780,317



At 31 December 2021
127,528
69,095
466,084
210,799
873,506

Page 34

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

17.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2022
115,137,093


Amounts written off
(28,968,871)



At 31 December 2022

86,168,222






Net book value



At 31 December 2022
86,168,222



At 31 December 2021
115,137,093

An impairment charge of £28,968,871 has been recognised against the cost of investment in a subsidiary, following a review of the recoverable amount based on revised expectations of future performance. The impairment reflects updated assumptions regarding sales growth, cost trends, and discount rates. This is a non-cash item and does not affect the company’s operations or liquidity.


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Ecotrade Europe Limited
Unit D3 Stanley Green Business Park, Commercial Avenue, Handforth, Cheadle, Cheshire, SK8 6QH
Ordinary
100%
Beauty Industry Group GmbH
Am Wolfsmantel 891058 Erlangen, Germany
Ordinary
100%
Beauty Industry Group GmbH Co.KG
Am Wolfsmantel 891058 Erlangen, Germany
Ordinary
100%
Luxy Hair LLC
1250 Flyer Way, Suite 100, Salt Lake City, UT 84116
Ordinary
100%
BIG Aus Co Pty Ltd
Strawberry Hills, New South Wales, 2012, Australia
Ordinary
100%
Zala Group Pty Ltd
Strawberry Hills, New South Wales, 2012, Australia
Ordinary
100%

Page 35

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

18.


Stocks

Group

Group
As restated
2022
2021
£
£

Finished goods and goods for resale
30,297,242
25,424,270



19.


Debtors

Group

Group
As restated
Company

Company
As restated
2022
2021
2022
2021
£
£
£
£


Trade debtors
4,929,290
4,540,414
-
-

Amounts owed by group undertakings
35,438,319
31,714,633
28,871,739
28,910,569

Other debtors
1,026,799
4,612,614
-
-

Prepayments and accrued income
336,530
319,859
-
-

41,730,938
41,187,520
28,871,739
28,910,569


Amounts owed by group undertakings are repayable on demand and do not attract interest.


20.


Cash and cash equivalents

Group
Group
2022
2021
£
£

Cash at bank and in hand
9,394,681
8,852,139

Less: bank overdrafts
(226)
(4,827)

9,394,455
8,847,312


Page 36

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

21.


Creditors: Amounts falling due within one year

Group

Group
As restated
Company

Company
As restated
2022
2021
2022
2021
£
£
£
£

Bank overdrafts
226
4,827
-
-

Loan note held by director
11,159,322
11,159,322
11,159,322
11,159,322

Trade creditors
2,007,453
1,949,726
-
-

Amounts owed to group undertakings
18,680,980
28,351,547
2,434,216
2,434,216

Corporation tax
580,078
702,284
-
-

Other taxation and social security
1,864,288
3,644,216
-
-

Obligations under finance lease and hire purchase contracts
1,350
5,887
-
-

Other creditors
461,359
233,498
-
-

Accruals and deferred income
3,773,961
2,729,075
69,230
29,230

38,529,017
48,780,382
13,662,768
13,622,768


Net obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
Amounts owed to group undertakings are payable on demand and do not attract interest.


22.


Creditors: Amounts falling due after more than one year

Group

Group
Company

Company
2022
2021
2022
2021
£
£
£
£

Loan note held by group undertakings
35,314,965
30,803,522
35,314,965
30,803,522

Net obligations under finance leases and hire purchase contracts
-
863
-
-

Accruals and deferred income
-
2,378,652
-
2,378,652

35,314,965
33,183,037
35,314,965
33,182,174


Net obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.

Page 37

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

23.


Loans


Analysis of the maturity of loans is given below:


Group

Group
Company

Company
2022
2021
2022
2021
£
£
£
£

Amounts falling due within one year

Loan note held by director
11,159,322
11,159,322
11,159,322
11,159,322



Amounts falling due after more than 5 years

Loan note held by group undertakings
35,314,965
30,803,522
35,314,965
30,803,522

46,474,287
41,962,844
46,474,287
41,962,844


Loan notes held by director
On 19 December 2019, a £11.2m unsecured rollover loan note was issued with a 0% interest rate applicable. The loan note is repayable on demand.
Loan notes held by group undertakings
On 19 December 2019, a £28.5m unsecured loan note was issued, for listing on The International Stock Exchange. Interest shall accrue at a rate of 7.5% per annum on the outstanding amount of the loan note. The Company shall pay accrued and unpaid interest each year by issuing new Notes (''PIK notes'') to the Noteholder. The Company shall repay, redeem and/or repurchase all outstanding Notes in full 10 years from the date of issue (19 December 2019), together with all accrued but unpaid interest.


24.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group

Group
2022
2021
£
£

Within one year
1,350
5,887

Between 1-5 years
-
863

1,350
6,750

Page 38

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

25.


Deferred taxation


Group



2022


£






At beginning of year
(33,819)


Charged to profit or loss
(706,125)



At end of year
(739,944)

Company


2022






At end of year
-
Group

Group
As restated
2022
2021
£
£

Accelerated capital allowances
(739,944)
(33,819)

(739,944)
(33,819)


26.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



501 (2021 - 501) Ordinary shares of £0.01 each
5
5


Page 39

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

27.


Reserves

Share premium account

The share premium account is an equity account that represents the additional amount shareholders paid for the issued shares that were in excess of the par value.

Foreign exchange reserve

The foreign exchange reserve represents the foreign exchange movements arising on translation of overseas subsidiaries of the Group.

Merger Reserve

The merger reserve arose from the share-for-share acquisitions of subsidiaries which were accounted for using merger accounting. All pre-merger reserves were transferred to the reserve, with no goodwill recognised upon acquisition.

Profit and loss account

The profit and loss account includes all current period retained profits and losses.

Page 40

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

28.


Prior year adjustment

During the current financial year, the Group has processed several prior year adjustments to correct errors identified in the previously issued financial statements. These adjustments have been made in accordance with FRS 102 Section 10 Accounting Policies, Estimates and Errors, and the comparatives have been restated accordingly. A summary of the adjustments is as follows:
Restatement of Subsidiary Trial Balance
It was identified after the finalisation of the prior year financial statements that certain adjustments included in the trial balance of a subsidiary were not appropriate under FRS 102. The impact of correcting these misstatements is as follows:
 
­Administrative expenses were understated by £1,577,037, of which £1,537,013 related to the amortisation of goodwill.
­Goodwill was understated by £11,768,106.
­Debtors were overstated by £2,392,147.
­Creditors were understated by £12,575,625.
­Deferred tax liabilities were understated by £141,323.
­The foreign exchange reserve movement was understated by £102,017.

Correction of Deferred Tax Liability
A deferred tax liability of £1,642,600 was incorrectly recognised in a prior year in respect of an overseas subsidiary. This liability did not meet the recognition criteria under FRS 102 and has therefore been reversed in the restated financial statements.
Overstatement of Stock on Acquisition
An error was identified in the fair value assessment of stock recognised on the acquisition of a subsidiary in a prior period. The stock had been overstated by £1,190,769. Consequently, goodwill had been understated by the same amount. An additional amortisation charge of £78,694, which was not previously recorded, has also been recognised as part of this correction.
Reclassification of Intercompany Receivable
A cost of investment amounting to £33,497,450 had been incorrectly recorded as an intercompany receivable in the parent company's accounts. This has now been reclassified appropriately as an investment. This adjustment has no impact on the Group's consolidated profit or net assets.
Net Impact of Adjustments
The cumulative effect of the above adjustments on the prior year comparatives is:
 
­An decrease of opening reserves as at 1 January 2021 of £176,144.
­An increase in the Group loss for the year of £1,655,731.
­An increase of the movement on foreign exchange reserve of £102,017.
­A decrease in the Group's overall net assets as at the balance sheet date of £1,729,858.

Page 41

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

29.


Contingent liabilities

“During previous periods, Cleopatra UK Bidco Limited granted three charges in favour of Owl Rock Capital Corporation (as Collateral Agent):
 
23 November 2021: A debenture creating fixed and floating charges over all the property or undertaking of the company.
 
7 March 2022: Fixed charges over two registered trademarks:
              -  “Beauty Works Luxury Hair Extensions & Hair Accessories” (US Registration No. 4633519)
              -  “Beauty Works” (Canadian Registration No. TMA898554)
These charges secure obligations under a group financing arrangement. The total debt allocated under this group financing arrangement is $175.2 million.


30.


Pension commitments

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 £356,043 (2021: £112,737). Contributions totalling £19,041 (2021: £45,869) were payable to the fund at the balance sheet date and are included in creditors.


31.


Commitments under operating leases

At 31 December 2022 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group

Group
2022
2021
£
£

Not later than 1 year
627,580
324,143

Later than 1 year and not later than 5 years
603,905
633,340

1,231,485
957,483

32.


Related party transactions

The directors have chosen not to disclose transactions entered into with other companies wholly owned within the group, as permitted by FRS 102 paragraph 33.1A.
Other related party transactions are presented below:


2022
2021
£
£

Loan note held by director - balance outstanding
(11,159,322)
(11,159,322)

Page 42

 
Cleopatra UK Bidco Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2022

33.


Controlling party

The Company's immediate parent company is BIG ROW Holdco (Cayman) LLC, a company incorporated in the Cayman Islands. The Company's ultimate parent is L Catterton Funds, a company registered in the United States of America.

 
Page 43