Company registration number 11724356 (England and Wales)
SNACK CREATIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
SNACK CREATIONS LIMITED
COMPANY INFORMATION
Directors
Mr S Webber
Mr A Gunton
Mr G Chetwood
Company number
11724356
Registered office
Pasteur Road
Gt Yarmouth
NR31 0DW
Auditor
Ensors Accountants LLP
3 St James Court
Whitefriars
Norwich
NR3 1RJ
SNACK CREATIONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
SNACK CREATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 1 -
The directors present the strategic report for the year ended 31 October 2024.
Review of the business
The company is a market leader in the development and manufacture of healthy snacks using extruded pellet technology to make snacks from lentil, chickpea, split pea, potato and other ingredients. Snack Creations is a new product development (NPD) led business.
We achieved sales of £27.4m (up 4.5% on 2023 - £26.3m). We achieved 18% sales growth in our export markets as we continue to open up new markets and support new customers. This reflects our ambition to grow the business on a sustainable path over the long term. Our new facility will be producing commercially in early 2025. It has been a challenging period as we invest in the new facility with dual running costs and we strive to grow our sales ahead of opening the facility and maintaining our old facility. The weak demand in the UK market has stunted our growth ambitions in the short term. Our plans are based on long term, sustainable growth and we will continue to invest in our business to deliver against our ambitious targets despite short term bumps on the growth journey.
During the year we started to supply 14 new customers which has been a target as we prepare to open the new factory. The pipeline continues to grow with both new customers and significant opportunities with existing customers. Each year the team develops great, new products. Our ability to deliver what the market needs, whether that is high protein, low salt, low fat, high fibre, or whatever technical challenge, is not just met, but beaten.
Ingredient costs continue upwards and energy costs are volatile. Taken together, our input cost base remains higher than we would like.
This paragraph will appear in every review and I make no apologies. It is the essence of our DNA. Our focus is on delighting our customers with world leading NPD and great service. As our technical capability, through investment in people and processes grows, our ability to offer even more to our customers expands.
Our capex in the year amounted to in excess of £18m which is a very clear indication of our commitment to deliver the next stage of the development of our world class business. Post year end, £10m of the £11m in bank loans was repaid. This was replaced with longer term borrowings due over a 7 year period.
Exceptional costs of £535k, relate to dual running associated with the opening of our new facility. The increase in costs from prior year illustrates the step towards fully opening the site in early 2025. EBITDAE has been included within our financial statements, as this is a key measure at a time we are investing in a new facility, which at present is giving us no return.
Principal risks and uncertainties
The principal risks faced by the company are focused on raw material price movements, energy cost volatility and exchange rate fluctuations.
The business seeks to pass on underlying raw material price increases to customers as appropriate.
The business protects itself with long term agreements, insurance policies and forward contracts where possible.
SNACK CREATIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 2 -
Key performance indicators
The business operates using a range of KPIs which are cascaded through the business.
The business reviews health and safety metrics at board level and acts accordingly upon that information.
HR metrics regarding employee performance and wellbeing are measured and reviewed.
The business focuses on various financial KPIs including operating profit, EBITDAE, net assets and cash.
The non-financial KPIs that are reviewed involve production volumes, waste volumes and manufacturing metrics.
Sales volumes are measured against manufacturing volumes. In turn, KPIs regarding customer service levels and efficiency are monitored very closely.
Mr S Webber
Director
25 February 2025
SNACK CREATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 October 2024.
Principal activities
The principal activity of the company continued to be that of the production of snack pellets typically made from potato, lentil, chickpea and yellow pea.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
EBITDAE in the year amounted to £1,491,890 (2023: £2,451,619).
The directors have chosen to disclose the adjusted unaudited EBITDAE on page 9.This is because, in the directors view, EBITDAE reflects the underlying operating cash generation, by eliminating exceptional administrative expenses and depreciation. The directors consider EBITDAE to be a useful measure of the company's operating performance. Since this is a non-UK GAAP measure, it may not be directly comparable to the EBITDAE of other companies, as they may define it differently.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Webber
Mr A Gunton
Mr G Chetwood
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
The company's financial risk management objective is broadly to seek to make neither profit nor loss from exposure to currency or interest rate risks. Its policy is to finance working capital through retained earnings and where necessary through borrowings with third party banks.
The company's exposure to the price risk of financial instruments is therefore minimal. As the counter party to all financial instruments is its bankers, it is also exposed to minimal credit and liquidity risks in respect of these instruments. Its cash flow risk in respect of forward currency purchases is also minimal as it aims to pay suppliers in accordance with their stated terms, matching the maturity of the currency purchases.
The directors do not consider any other risks attaching to the use of financial instruments to be material to an assessment of its financial position or profit.
Research and development
The development and technical function is focused not only on improving efficiency and quality by use of technology, but also by further development of snack products offering a point of difference or meeting changed market needs. Resource is allocated to achieve this aim.
Future developments
As we develop new products and win new customers, we will be able to improve our financial results as we utilise our new capacity. Our new facility which will be producing commercially in the current year is the biggest step change ever in our business. It is a really exciting time and will allow our focus on growth to continue and accelerate. We are already developing our plans for the next phase of growth, once the factory opens.
SNACK CREATIONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 4 -
Auditor
Ensors Accountants LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr S Webber
Director
25 February 2025
SNACK CREATIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SNACK CREATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SNACK CREATIONS LIMITED
- 6 -
Opinion
We have audited the financial statements of Snack Creations Limited (the 'company') for the year ended 31 October 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SNACK CREATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SNACK CREATIONS LIMITED (CONTINUED)
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 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 financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Enquiring of those charged with governance and management, including obtaining and reviewing supporting documentation, concerning the company's internal policies and procedures relating to:
Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
The internal controls established to mitigate the risks related to fraud or non-compliance with laws and regulations.
Obtaining an understanding, as gathered from accumulated knowledge of the company and the industry, of the legal and regulatory (including reporting framework) environment that the company operates in, focusing on those laws and regulations that could reasonably be expected to have a direct effect on the financial statements or a fundamental effects on the operations of the company. For Snack Creations Ltd, we consider these to include Companies Act 2006, UK GAAP, Employment Law, Data Protection, Health and Safety Regulations, Food Hygiene Standards and standard UK tax legislation.
SNACK CREATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SNACK CREATIONS LIMITED (CONTINUED)
- 8 -
Where available and provided, reviewing all correspondence with regulatory authorities.
Undertaking analytical procedures to identify any unusual or unexpected relationships that may indicate risks or material misstatement due to fraud.
In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Additionally, we reviewed the revenue recognition policy and ensured the adopted policy was in line with UK GAAP requirements, we tested the application of this policy throughout our substantive audit procedures over revenue.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an 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.
Barry Gostling (Senior Statutory Auditor)
For and on behalf of Ensors Accountants LLP, Statutory Auditor
Chartered Accountants
3 St James Court
Whitefriars
Norwich
NR3 1RJ
5 March 2025
SNACK CREATIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
27,428,932
26,258,080
Cost of sales
(22,300,597)
(20,816,254)
Gross profit
5,128,335
5,441,826
Distribution costs
(2,436,448)
(1,911,098)
Administrative expenses
(2,102,440)
(1,929,573)
Other operating income
115
151
Exceptional item
4
(546,686)
(382,548)
Operating profit
5
42,876
1,218,758
Interest receivable and similar income
8
3,300
Interest payable and similar expenses
9
(732,219)
(543,488)
(Loss)/profit before taxation
(686,043)
675,270
Tax on (loss)/profit
10
145,188
(13,365)
(Loss)/profit for the financial year
(540,855)
661,905
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 12 to 24 form part of these financial statements.
Unaudited non-statutory reconciliation of the (loss)/profit for the year to earnings before interest, tax, depreciation, amortisation and exceptionals from operations for the year ended 31 October 2024.
2024
2023
£
£
(Loss)/Profit for the financial year
(540,855)
661,905
Depreciation
899,028
850,313
Bank interest
732,219
543,488
Taxation
(145,188)
13,365
Exceptional expenses
546,686
382,548
EBITDAE
1,491,890
2,451,619
SNACK CREATIONS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 OCTOBER 2024
31 October 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
26,155,028
8,838,699
Current assets
Stocks
13
6,019,904
4,768,822
Debtors
14
6,451,430
5,842,213
Cash at bank and in hand
2,040,845
1,901,725
14,512,179
12,512,760
Creditors: amounts falling due within one year
15
(22,275,327)
(9,529,986)
Net current (liabilities)/assets
(7,763,148)
2,982,774
Total assets less current liabilities
18,391,880
11,821,473
Creditors: amounts falling due after more than one year
16
(10,385,721)
(3,802,381)
Provisions for liabilities
Deferred tax liability
18
2,048,502
1,520,580
(2,048,502)
(1,520,580)
Net assets
5,957,657
6,498,512
Capital and reserves
Called up share capital
20
1,000
1,000
Share premium account
9,000
9,000
Profit and loss reserves
5,947,657
6,488,512
Total equity
5,957,657
6,498,512
The notes on pages 12 to 24 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 25 February 2025 and are signed on its behalf by:
Mr S Webber
Director
Company registration number 11724356 (England and Wales)
SNACK CREATIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 November 2022
1,000
9,000
5,826,607
5,836,607
Year ended 31 October 2023:
Profit and total comprehensive income
-
-
661,905
661,905
Balance at 31 October 2023
1,000
9,000
6,488,512
6,498,512
Year ended 31 October 2024:
Loss and total comprehensive income
-
-
(540,855)
(540,855)
Balance at 31 October 2024
1,000
9,000
5,947,657
5,957,657
The notes on pages 12 to 24 form part of these financial statements.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 12 -
1
Accounting policies
Company information
Snack Creations Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pasteur Road, Gt Yarmouth, NR31 0DW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Milton Webber Ltd as at 31 October 2024. These consolidated financial statements are available from, Companies House, Crown Way, Cardiff, CF14 3UZ.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Post year end, £10,133,662 of the £10,996,519 in bank loans was repaid. This was replaced with longer term borrowings due over a 7 year period.
1.3
Turnover
Turnover comprises sales recognised by the company in respect of goods and services supplied during the year; exclusive of Value Added Tax and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
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.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 13 -
Depreciation is provided on the following basis:
Plant, machinery and computer equipment
10 - 20% straight line
Included within plant, machinery and computer equipment are assets that were used in the course of construction which are not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost is determined on a FIFO basis, and includes all direct costs incurred and attributable production overheads. Net realisable value is based on estimated selling price allowing for all further costs of completion and disposals. Work in progress is stated on the basis of direct costs plus attributable overheads based on a normal level of activity. Provision is made for any foreseeable losses where appropriate.
The company's regrind stocks (product which has been ground to powder or due to be ground to powder for future use in selected lines) is carried at the equivalent cost of virgin raw materials and excludes factory overheads, which are written off to the Statement of Comprehensive Income at the point at which the stock is classified as regrind stock.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 14 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 16 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.16
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 17 -
1.17
The company has an invoice discounting arrangement. The amount owed by customers to the company is included within trade debtors and the amount owed to the invoice discounting company is included within other creditors. The amount owed to the invoice discounting company represents the difference between the amounts advanced by the discounting group and the invoices discounted. The interest element of the invoice discounting charges and other related costs are recognised as they accrue and are included in the Statement of Comprehensive Income within 'interest payable and similar expenses'.
1.18
Exceptional items in the current year and prior year relate to costs related to refinancing and dual running costs.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for the stock provision. Provision is made for slow moving or obsolete stock that is written down to its original cost without absorbed overheads.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
14,401,804
15,233,986
Rest of Europe
8,143,071
6,180,209
Rest of World
4,884,057
4,843,884
27,428,932
26,258,079
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
3
Turnover and other revenue
(Continued)
- 18 -
2024
2023
£
£
Other revenue
Interest income
3,300
-
4
Exceptional item
2024
2023
£
£
Expenditure
Exceptional items
546,686
382,548
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
862
(12,291)
Research and development costs
361,642
363,237
Fees payable to the company's auditor for the audit of the company's financial statements
21,205
20,790
Depreciation of owned tangible fixed assets
899,028
850,313
Operating lease charges
328,224
328,224
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
87
84
Sales and distribution
13
13
Administration
8
8
Total
108
105
Their aggregate remuneration comprised:
2024
2023
As restated
£
£
Wages and salaries
5,227,122
4,630,852
Social security costs
546,229
479,061
Pension costs
167,257
157,151
5,940,608
5,267,064
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 19 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
306,224
289,273
Company pension contributions to defined contribution schemes
12,812
12,089
319,036
301,362
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023: 2).
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
3,300
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
732,219
543,488
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(673,110)
(786,126)
Deferred tax
Origination and reversal of timing differences
527,922
799,491
Total tax (credit)/charge
(145,188)
13,365
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
10
Taxation
(Continued)
- 20 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(686,043)
675,270
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.50%)
(171,511)
151,936
Group relief
155,138
38,227
Deferred tax adjustments in respect of prior years
(18,820)
(99,360)
Fixed asset differences
(1,041)
Additional deduction for R&D expenditure
(188,125)
(158,075)
Remeasurement of deferred tax for changes in tax rates
89,245
Ineligible depreciation
78,130
(7,567)
Taxation (credit)/charge for the year
(145,188)
13,365
11
Tangible fixed assets
Plant, machinery and computer equipment
£
Cost
At 1 November 2023
10,918,739
Additions
18,215,357
At 31 October 2024
29,134,096
Depreciation and impairment
At 1 November 2023
2,080,040
Depreciation charged in the year
899,028
At 31 October 2024
2,979,068
Carrying amount
At 31 October 2024
26,155,028
At 31 October 2023
8,838,699
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 21 -
12
Financial instruments
During the year, Snack Creations Limited made sales in US Dollars. To mitigate the exchange rate risk that Sterling may appreciate against the US Dollar between the sale date and the payment date, the company entered into forward agreements to sell US Dollars.
During the year, Snack Creations Limited also made purchases in Euros and Swiss Francs. To mitigate the exchange rate risk that Sterling may depreciate against the Euro and Swiss Franc between the purchase date and the payment date, the company entered into forward agreements to buy Euros and Swiss Francs.
As at 31 October 2024 the fair value of the above contracts were determined to be a liability of £51,192 (2023: asset of £20,923). The debit to the Statement of Comprehensive Income was £72,115 (2023: credit of £20,923).
13
Stocks
2024
2023
£
£
Raw materials and consumables
2,579,645
2,009,315
Finished goods and goods for resale
3,440,259
2,759,507
6,019,904
4,768,822
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,482,807
4,577,851
Amounts owed by group undertakings
1,357,792
549,325
Other debtors
689,503
184,937
Prepayments and accrued income
921,328
530,100
6,451,430
5,842,213
Amounts owed by group undertakings due within one year are interest free, unsecured and repayable on demand.
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
17
10,996,519
862,857
Trade creditors
7,609,340
5,195,793
Amounts owed to group undertakings
437,035
631,592
Taxation and social security
133,702
116,797
Other creditors
2,134,731
2,224,601
Accruals and deferred income
964,000
498,346
22,275,327
9,529,986
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
15
Creditors: amounts falling due within one year
(Continued)
- 22 -
Bank loans totaling £862,857 (2023: £862,857) are secured by a fixed and floating charge by way of an unlimited multilateral guarantee over the assets of the following companies; Pretty Investments Limited, Pasta Foods Limited, Snack Creations Ltd, Milton Webber Ltd and Pretty Properties Limited.
Post year end, £10,133,662 of the £10,996,519 in bank loans was repaid. This was replaced with longer term borrowings due over a 7 year period.
Other creditors includes £2,100,098 (2023: £2,198,151) secured on the trade debts of the company, and by way of an unlimited multilateral guarantee over the assets of fellow group undertakings, Pretty Investments Limited, Pasta Foods Limited, Milton Webber Ltd and Pretty Properties Limited.
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
2,921,190
3,802,381
Amounts owed to group undertakings
7,464,531
10,385,721
3,802,381
Bank loans totaling £2,921,190 (2023: £3,802,381) are secured by a fixed and floating charge by way of an unlimited multilateral guarantee over the assets of the following companies; Pretty Investments Limited, Pasta Foods Limited, Snack Creations Ltd, Milton Webber Ltd and Pretty Properties Limited.
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
589,286
17
Loans and overdrafts
2024
2023
£
£
Bank loans
13,917,709
4,665,238
Payable within one year
10,996,519
862,857
Payable after one year
2,921,190
3,802,381
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 23 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
4,883,026
1,666,109
Tax losses
(3,010,477)
(132,886)
Short term timing differences
(9,205)
(12,643)
Other
185,158
-
2,048,502
1,520,580
2024
Movements in the year:
£
Liability at 1 November 2023
1,520,580
Charge to profit or loss
527,922
Liability at 31 October 2024
2,048,502
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
167,257
157,151
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Allotted, called up and fully paid of 10p each
10,000
10,000
1,000
1,000
The ordinary shares each carry one voting right.
Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.
SNACK CREATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 24 -
21
Financial commitments, guarantees and contingent liabilities
The company has guaranteed the bank debts of the group. The debts are secured by a fixed and floating charge by way of an Unlimited Multilateral Guarantee over the assets of the following companies: Pretty Investments Limited, Pretty Properties Limited, Pasta Foods Limited, Snack Creations Ltd and Milton Webber Ltd. The maximum amount payable under this guarantee at 31 October 2024 is £6,865,833 (2023: £7,700,000).
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
2,679
1,379
Between two and five years
1,532,051
3,130,316
1,534,730
3,131,695
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
354,381
7,362,536
24
Events after the reporting date
Post year end, £10,133,662 of the £10,996,519 in bank loans was repaid post year end. This was replaced with longer term borrowings due over a 7 year period.
25
Related party transactions
During the year, purchases totalling £Nil (2023: £26,204) were made to a partnership involving a Director.
26
Ultimate controlling party
The immediate parent company is Milton Webber Ltd, a company incorporated in England and Wales.
The ultimate controlling party is Simon Webber by way of a majority shareholding.
The smallest and largest group in which the results of the company are consolidated is that headed by Milton Webber Ltd. The address of Milton Webber Ltd's registered office is Pasta Foods Limited, Forest Way, New Costessey, Norwich, NR5 0HJ. The consolidated financial statements can be obtained from Companies House.
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