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Registered number: 13065587
OLSAM OPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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OLSAM OPCO LIMITED
COMPANY INFORMATION
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Oliver Horbye (resigned 3 October 2024)
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Sam Horbye (resigned 3 October 2024)
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Benedict Poynter (appointed 4 October 2024)
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Fergus Niven (appointed 13 August 2024)
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Artem Kontyaev (appointed 13 August 2024)
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Alexander Garnier (appointed 13 August 2024)
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Chartered Accountants & Statutory Auditor
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Denali European Opportunities DAC
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76 Sir John Rogerson's Quay
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OLSAM OPCO LIMITED
CONTENTS
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Independent Auditor's Report
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Consolidated Statement of Comprehensive Income
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Consolidated Analysis of Net Debt
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Notes to the Financial Statements
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OLSAM OPCO LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their strategic report for the year ended 31 December 2023.
Principal Activity
Olsam OpCo Limited (the “Company” or the “Business”) is a multi-brand retailer selling products across several channels including e-commerce marketplaces, wholesale partners and directly to consumers through its various owned websites. The Company, together with its subsidiaries, operates in the USA, UK and Europe.
Company Performance and Market backdrop
In 2023 Olsam OpCo Limited experienced a good level of revenue growth (+21.6%), primarily driven by the acquisition of several additional brands through the course of 2022. Despite this positive revenue performance, the broader ecommerce environment was challenging as the continued war in Ukraine and associated energy crisis caused sharp increases in energy prices and interest rates, and significant declines in consumer discretionary income in our core markets. The spike in interest rates also caused the company's cost of borrowing to grow substantially.
During 2022 the company had made significant investments in operational capabilities in order to drive growth in the business in 2023 and beyond, however the negative market backdrop and resulting underperformance of many brands within the company’s portfolio, together with the increased cost of borrowing, meant the business continued to be significantly loss making.
Challenging Fundraising Environment and Dwarfs B.V. Acquisition
Against this challenging macro-economic backdrop and the subdued trading performance, discussions with equity investors to inject further capital into the group proved unsuccessful. However, in attempt to shore up the company’s financial position, in December 2023 the company was able to acquire a Dutch competitor, Dwarfs B.V., the consideration being shares issued by the company's then parent, Olsam Group Limited. The acquisition of Dwarfs B.V. brought with it cash on the balance sheet, additional brands, additional talent and an expansion of the company’s marketplace capabilities to include selling on Bol.com in the Netherlands.
2024 trading and restructuring
The difficult macro-economic environment, including high interest rates, remained throughout 2024, and despite efforts to extract synergies from the acquisition of Dwarfs B.V., the company struggled to drive sufficient growth from its existing brands and the newly acquired brands in order to become profitable and cash flow positive. A further injection of capital was needed to support the ongoing operations and after several months of conversations between the major equity holders of the then parent company, Olsam Group Limited, and the company’s debt providers, the group underwent a restructuring in August 2024 whereby control of Olsam OpCo Limited and its subsidiaries passed to a new parent company, Fairweather BidCo Limited, which is owned by funds managed by NorthWall Capital, which also manages the company's lender.
Post Restructuring trading
As part of the restructuring, Ben Poynter was appointed CEO and Olsam OpCo Limited received a new significant injection of capital from NorthWall Capital to fund its existing operations and to support further brand acquisitions.
After a year of disruption in 2024 from both the integration of the Dwarfs B.V. business and the corporate restructuring, the business has traded confidently into 2025 as it approaches a sustainable level of profitability. The company’s balance sheet has improved significantly with a reduction in debt, trading losses have been
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OLSAM OPCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
reduced, and measures are being taken to further improve operational performance and efficiency. Looking forward, the company continues to invest in underlying organic growth through new product development whilst at the same time rationalising brands and/or SKUs that are unprofitable and underperforming. In addition, the company is investing in inorganic growth through further profitable brand acquisitions.
The Company’s income statement for the year ended 31 December 2023 represents the trading performance of the historic Olsam brands and only 10 days of the Dwarfs B.V. acquisition which completed on 21 December 2023. However, the income statement also is impacted by the full impairment of the acquired Dwarfs Assets (in addition to impairments of Olsam's existing assets).
The Company saw good year on year revenue growth primarily reflecting the performance of underlying Olsam assets prior to the Dwarfs acquisition. Despite this growth, due to the investment in operational capabilities to drive growth in the business in 2023, the Operating loss (before the impairment of trademarks and goodwill) remained broadly in line with 2022 at £6.7m (2022 - £7.1m). Following an evaluation of the value of goodwill and trademarks of both the existing Olsam brands and the acquired Dwarf B.V. brands, we have decided to take a significant reduction in the carrying value of those assets on the balance sheet, and as such a substantial charge is taken through administrative expenses in the 2023 income statement (£38.0m). While these brands largely continue to trade and generate profits for the company, the expectations of future profit for many is substantially below the levels expected at the time of their acquisition.
Going concern
The Company and the Group remain reliant on capital contributions from its shareholder and lender, NorthWall Capital, in the near term to continue as a going concern. NorthWall Capital have provided a letter of support to the Company and continues to provide funding to the business as evidenced by its injection of capital in 2024/25 and its funding of the July 2025 acquisition.
On this basis, and after reviewing the Company and the Group’s forecasts and projections to 31 December 2026, we have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. We therefore continue to adopt the going concern basis in preparing the financial statements.
Following the acquisition of Dwarfs B.V., the company has been able to achieve synergies in the operating cost base of the two businesses resulting in a reduction in these costs over the course of 2024 (the Dwarfs operating costs are only partly reflected in the 2023 financial statements presented herein). We continue to review our operating costs and have achieved further savings in 2025 as we aim to reduce losses and achieve future EBITDA profitability. Whilst cost pressures remain from increases in marketplace costs, the introduction of additional charges by certain marketplaces, selective input price increases and the impact of tariffs in the US, the company has been successful in offsetting some of these pressures through efficiencies gained in sourcing, our supply chain processes, other operational efficiencies and in pricing improvements. In July 2025, the Group acquired an Australian business, which is expected to deliver annual EBITDA in excess of AUS$3.0m.
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OLSAM OPCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial key performance indicators
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The company reviews KPIs on a daily, weekly and monthly basis across its brands and channels through its BI tools. The key KPIs that are monitored on this basis are:
- Gross Sales
- Net Revenue
- Gross Profit Margin
In addition, the company monitors the group trading performance and financial position through monthly management reporting and rolling cashflow forecasting.
Principal risks and uncertainties
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The Company is a multi-brand retailer that uses third party manufacturers, freight, logistics and warehouse partners and is highly dependent upon sales channels owned and operated by other businesses of significant scale (e.g. Amazon).
Macro-economic risks
The primary macro-economic risk factors the business faces include:
• Changes in consumer discretionary income
• Changes in tariffs and duty rates between countries where the Company buys and sells its products
(noting the majority of the Company's products are manufactured in China)
• Changes in the availability and price of materials used to manufacture its products
• The impact of international conflicts that can cause shocks to freight rates, freight availability, transport
times, or otherwise negatively impacting supply chains
• Changes in political policies that have a negative impact on the cost structure or the Company (e.g.
changes to employment tax rates)
The Company’s revenues are spread geographically between the US and UK/Europe and, following the recent acquisition, Australia, and can absorb some element of disruption in either location, however the company will continue to monitor the wider macro-economic environment and remain both vigilant and agile in the face of any disruptions.
Borrowings
The company has historically received substantial funding in the form of interest-bearing loans. The Company’s operating performance can be negatively impacted by significant increases in interest rates and the associated costs relating to servicing the company’s debt facilities. Following the restructuring in August 2024, the company has significantly reduced the size of its debts and maintains a strong relationship with its lenders as 100% owners of the business, thus minimising the impact of fluctuations in interest rates going forward.
Currency Fluctuations
The business receives its funding in Euros, its costs associated with the purchase and transport of inventory is in US dollars, and its principle operating costs are in pounds sterling and euros. The company receives the majority of its trading inflows in dollars and euros, with a reasonable proportion in pounds sterling. While the business is relatively well hedged based on the balance of inflow and outflows, movements in international currencies can negatively impact trading performance.
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OLSAM OPCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board on 12 September 2025 and signed on its behalf.
Benedict Poynter
Director
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OLSAM OPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
Directors' responsibilities statement
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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 judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors who served during the year were:
Oliver Horbye (resigned 3 October 2024)
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Sam Horbye (resigned 3 October 2024)
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The Company’s future developments are set out in the company strategy and financial review in accordance with s414C(11) of the Companies Act 2006 as the directors consider this to be of strategic importance to the Group.
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OLSAM OPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Disclosure of information to auditor
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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 auditor is 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 auditor is aware of that information.
Post balance sheet events
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On 13 August 2024 the company went through a restructuring where the shares of the Company previously owned by Olsam Group Limited were transferred to Fairweather BidCo Limited, an entity wholly owned by funds managed by the company's principle lender, NorthWall Capital. Following the restructuring Olsam Group Limited was no longer part of the Company’s structure and all intercompany debts owing to and from that entity were released. At that time the founders of the Olsam entities, Ollie Horbye and Sam Horbye, resigned as directors and ceased their involvement with the Company, and Ben Poynter was appointed as director and CEO, with representatives of NorthWall Capital also appointed as Directors of the Company.
Since the restructuring NorthWall Capital has injected further capital into the Company to support its working capital needs and the continued organic growth of the business. In addition, NorthWall Capital continues to support the growth of the business through the acquisition of new brands and the Company has recently acquired the business and assets of an Australian brand that is expected to deliver annual EBITDA in excess of AUS$3.0m. The acquisition is a significant step forward in the Company's e-commerce strategy, building out its D2C and retail capabilities and expanding its geographic reach into the Australian market. NorthWall Capital has also reduced the amount of debt in the business and intends to further reduce the balance of debt held within the company structure to ensure a healthy balance sheet going forward.
This report was approved by the board on 12 September 2025 and signed on its behalf.
Benedict Poynter
Director
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OLSAM OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF OLSAM OPCO LIMITED
Qualified opinion
We have audited the financial statements of Olsam Opco Limited (the 'Company') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Consolidated Analysis of Net Debt and the 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 FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2023 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 qualified opinion
We were not appointed as auditor of the company until October 2024 and thus did not observe the counting of physical inventories at both the start and the end of the financial year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 1 January 2023 and 31 December 2023, which are included in the accounting records at £5,595,616 and £8,391,238, respectively, by using other audit procedures. Further, in the year ended 31 December 2023, the Group used a third party service provider to retain copy stock purchase invoices. However, at the time of undertaking our work, the Group had cancelled the third party service provider contract and had lost access to the stored invoices. We were unable to satisfy ourselves concerning the cost of stock sold of £8,041,357 in the year, which forms part of cost of sales, and of the value of the closing stock of £8,391,238.
Consequently were unable to determine whether any adjustments to these amounts were necessary.
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 qualified opinion.
Material uncertainty related to going concern
We draw attention to Note 2.3 in the financial statements, which indicates that at the date of approval of the financial statements the Company and the Group were dependent on the support of their existing shareholder and lender to make further funding available to enable the Company and the Group to continue as a going concern and that there is no binding legal agreement in place between the Company and the Group to provide such funding. If the anticipated funding is not available, alternative sources of funding would be required.
As stated in Note 2.3, these conditions represent a material uncertainty that may cast significant doubt on the Company and the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Notwithstanding the above, 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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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OLSAM OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF OLSAM OPCO LIMITED (CONTINUED)
Other information
The other information comprises the information included in the Annual report and financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual report and financial statements. 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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stock purchases in the year and of the value of the closing stock held at 31 December 2023. We have concluded that where the other information refers to the cost of sales or the closing stock balance, it may be materially misstated for the same reason. In addition, were any adjustments to the purchases or closing stock balance to be required, the strategic report would also need to be amended.
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Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the 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.
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Matters on which we are required to report by exception
Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
Arising solely from the limitation on the scope of our work relating to the cost of stock sold in the year and closing stock referred to above:
∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙in our opinion, adequate accounting records have not been kept.
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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:
∙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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 5, 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,
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OLSAM OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF OLSAM OPCO LIMITED (CONTINUED)
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.
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:
We obtained a general understanding of the group’s legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations in the countries in which the group operates, the entity’s policies and procedures regarding compliance, and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the group’s industry and regulation.
We understand that the group complies with the framework through:
∙Updating operating procedures, manuals and internal controls as legal and regulatory requirements change
∙Close liaison with suppliers as regards product safety testing and conformity marking
∙Inspection of products for quality prior to shipment from the producing country
∙The Directors’ close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly
∙Taking necessary action in the event of any regulatory concerns
∙Outsourcing payroll and tax compliance to external experts.
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, which are central to the group’s ability to conduct its business, and/or where there is a risk that failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the group:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
∙Consumer laws relevant to the health, safety and environmental requirements of the group’s products.
We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations identified above:
∙Detailed review of the procedures management has implemented over compliance with relevant consumer laws.
∙Obtaining written management representations regarding the adequacy of procedures in place.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:
∙Manipulation of the financial statements through incorrect estimation of:
∙The consideration for the acquisition of Dwarfs B.V.
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OLSAM OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF OLSAM OPCO LIMITED (CONTINUED)
∙The contingent consideration relating to past acquisitions and classification of any adjustments thereto
∙The value of intangible assets acquired since the group’s inception
∙The useful life of intangible assets, including goodwill
∙Incorrect revenue recognition including errors in the assessment of possible returns after the end of the accounting period
∙The possibility of errors in the unaudited opening balances
∙The accuracy of the financing charges
∙Manipulation of the financial statements via fraudulent journal entries
These areas were communicated to the other members of the engagement team not present at the discussion.
The procedures we carried out to gain evidence in the above areas included:
∙In respect of the estimates identified above:
∙Challenging management regarding the methodology used in making the estimates identified above and their judgements and assumptions
∙comparisons with market data and post-year-end data as appropriate
∙Substantive work on revenue, including the assessment of returns provisions
∙Substantive work on opening balances and reviews of the monthly profit and loss accounts
∙Review of the classification of the financing instruments, substantive work on interest charges and assessment of finance facility fees
∙Testing of a sample of manual journal entries, selected through applying specific risk assessments based on the company's processes and controls surrounding manual journal entries.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matter
The financial statements of Olsam Opco Limited for the year ended 31 December 2022 were unaudited.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in 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.
Peter Key (Senior Statutory Auditor)
for and on behalf of
S&W Audit
Chartered Accountants
Statutory Auditor
Onslow House
Onslow Street
Guildford
GU1 4TL
12 September 2025
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OLSAM OPCO LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Exceptional administrative expenses - impairment of intangible assets
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Interest payable and similar expenses
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Loss for the financial year
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Other comprehensive income for the year
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Foreign exchange on consolidation
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Total comprehensive income for the year
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The notes on pages 19 to 47 form part of these financial statements.
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OLSAM OPCO LIMITED
REGISTERED NUMBER: 13065587
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 September 2025.
The notes on pages 19 to 47 form part of these financial statements.
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OLSAM OPCO LIMITED
REGISTERED NUMBER: 13065587
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Profit and loss account brought forward
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 September 2025.
The notes on pages 19 to 47 form part of these financial statements.
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OLSAM OPCO LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Foreign exchange differences on consolidation
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Total comprehensive income for the year
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Comprehensive income for the year
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Foreign exchange differences on consolidation
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Total comprehensive income for the year
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The notes on pages 19 to 47 form part of these financial statements.
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OLSAM OPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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At 1 January 2022 (as previously stated)
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Prior year adjustment - correction of error (see note 2.1)
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At 1 January 2022 (as restated)
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Comprehensive income for the year
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At 1 January 2023 (as previously stated)
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Prior year adjustment - correction of error (see note 2.1)
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At 1 January 2023 (as restated)
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Comprehensive income for the year
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The notes on pages 19 to 47 form part of these financial statements.
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OLSAM OPCO LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
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Loss for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Impairments of fixed assets
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(Increase)/decrease in debtors
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Corporation tax (paid)/received
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Gain on renegotiation of deferred consideration
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Foreign currency movements
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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New loans from group companies
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Net cash used in financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Foreign exchange gains and losses
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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OLSAM OPCO LIMITED
The notes on pages 19 to 47 form part of these financial statements.
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Cash flows on business combinations
Cash flows on business combinations relate to the acquisition of businesses in the year (inflow of £3,094,377; 2022 - outflow of £24,227,076), payment of deferred and contingent liability (£179,138; 2022 - £847,009), and the refund of consideration paid to a vendor (£1,500,00; 2022 - £nil).
Significant non-cash transactions
Significant non-cash transactions relate to the re-estimation of deferred and contingent consideration due on business acquisitions, which reduced the recognised liability by £2,602,027 (2022 - £1,011,680), the settlement of deferred and contingent consideration of £1,317,881 (2022 - £995,173) by the issue of loan notes by the then parent company and the capitalisation of loan interest of £1,626,591 (2022 - £.927,704).
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OLSAM OPCO LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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Acquisition and disposal of subsidiaries
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Debt due to parent company within 1 year
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The notes on pages 19 to 47 form part of these financial statements.
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Other non-cash changes relate to foreign exchange adjustments, the capitalisation of loan interest, the expensing of loan issue costs, the settlement of deferred and contingent consideration and a charge for share options.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Olsam Opco Limited is a private company, limited by shares, incorporated in England & Wales, registered number 13065587. The registered office is 124 City Road, London, EC1V 2NX.
2.Accounting policies
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Basis of preparation of financial statements
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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 judgment 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.
Parent Company disclosure exemptions
In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙No Statement of Cash Flows has been presented for the parent Company;
Parent Company prior year adjustments
In preparing these financial statements, the directors identified that certain of the Parent Company’s investments and inter-company debtors were impaired in value. The directors then assessed whether there was any objective evidence that those impairments existed as at 31 December 2022, using information that was available at the date of approval of the previous year financial statements. The directors assessed that an impairment charge of £3.7 million ought to have been recognised as at 31 December 2022 and have accordingly adjusted the comparative amounts to include this adjustment.
In addition, the Directors also became aware of various amounts which had been capitalised as part of the cost of investments in subsidiary companies for which no supporting documentation was available. The directors have therefore adjusted the cost of investments to remove these amounts which totalled £1 million.
The net impact of these adjustments is to increase the previously reported loss for the year ended 31 December 2022 by £3.7 million and to increase the reported deficit of assets as at 31 December 2022 by £4.7 million.
The following principal accounting policies have been applied:
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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.
The Company has historically relied upon capital contributions provided by its shareholder and lender to maintain an adequate level of cash in the business to support its ongoing operations and growth. That position remains true today and whilst the expected need for capital contributions has reduced substantially, having consideration for various scenarios where the business does not perform at the level expected, the Company and the Group remain reliant on capital contributions from its shareholder and lender, NorthWall Capital, in the near term. NorthWall Capital have provided a letter of support to the Company and continues to provide funding to the business as evidenced by its injection of capital in 2024/25 and its funding of the recent acquisition.
However, there is no legal obligation on NorthWall Capital to provide additional support to the Company and the Group and the availability of such support is at the sole discretion of NorthWall Capital.
After reviewing the Company and the Group’s forecasts and projections to 31 December 2026, including forecasts receipts and further capital contribution, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. These forecasts and projections have considered a downside scenario in sales levels; however, management have also identified actions that could be taken to mitigate any losses and to ensure that the Company and the Group have sufficient funds to meet their liabilities as they fall due over the next 12 months. Even with the proposed mitigations further capital funding is still required. If the anticipated funding is not available, alternative sources of funding would be required. The Directors believe further funding will be made available and therefore continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include any adjustments that would result if the Company and the Group were unable to continue as going concerns.
For these reasons, the Directors have concluded that a material uncertainty exists which may cast significant doubt upon the Company and the Group’s ability to continue as a going concern and that, therefore, the Company and the Group may be unable to realise their assets and discharge their liabilities in the normal course of business.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
In practice, sales are recognised when the goods have been delivered to the customer.
The Group incurs finance costs on its borrowings and on deferred and contingent consideration which is payable after more than one year. Finance costs are recognised using the effective interest method.
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.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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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.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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 of 10 years.
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 useful lives are:
Trademarks - 10 years
Computer software - 3 years
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:
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3 years on a straight line basis
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3 years on a straight line basis
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3 years on a straight line basis
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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.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Impairment of fixed assets and goodwill
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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.
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Investments in subsidiaries
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Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to sell. Cost is based on the cost of purchase on a weighted average basis.
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.
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Cash and cash equivalents
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Cash and cash equivalents comprises solely of cash in hand.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs 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.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments 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 payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument 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.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables 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.
Derecognition of financial instruments
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.
The share based payments charge represents recharges from the parent company relating to the cost of options and warrants issued to the Company's staff and suppliers to acquire shares in the parent company.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group has made certain acquisitions which have consideration contingent on the future results of the relevant acquisitions. The contingent consideration recognised at acquisition is the net present value of the consideration which is expected to be paid, estimated using forecast results. The contingent consideration is subsequently measured using the effective interest method.
At each reporting date, the contingent consideration due is re-estimated. Changes in the capital element of the estimate are reflected as part of the cost of goodwill in the consolidated balance sheet or the cost of investments in subsidiaries in the Parent Company balance sheet. Any interest accrued on contingent consideration which is written back is credited to the profit and loss account.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Going concern
As disclosed in Note 2.3 Going concern the directors have judged that there is a reasonable expectation that the Company and the Group will be able to continue as a going concern for the foreseeable future. In coming to this conclusion, they judged that the Company and the Group's shareholder and lender will be willing to provide additional working capital. However, as there is no legal obligation on the shareholder and the lender to provide additional funding, the provision of such funding is not certain.
This judgement is pervasive to the financial statements.
Dwarfs business combination
Dwarfs B.V. was initial acquired in December 2023 by Olsam Group Limited (the Company’s then parent company) and was then immediately transferred to the Company. The consideration for the initial acquisition was shares in Olsam Group Limited with the vendors of Dwarfs having circa 30% ownership of the enlarged group.
The directors assessed whether the business combination was a merger or a business acquisition. The directors assessed the combination against the requirements of FRS 102 and concluded that this was an acquisition, rather than a meger. A key factor in this assessment was that the directors of Dwarfs B.V. left the business on the combination.
Dwarfs consideration
The Company acquired the entire share capital of Dwarfs B.V. from its then parent company for the sum of £1. The directors considered if this was an undervaluation. As Dwarfs B.V. had incurred significant operating losses, was still loss making and had a significant deficiency of assets, the directors concluded that there was no undervalue.
Identification of assets and liabilities arising on acquisitions
The Group has grown by acquisition of businesses since formation. In preparing the financial statements, for each business acquisition the directors have had to identify the assets and liabilities arising on acquisition, and to further assess if the identified assets and liabilities fall to be recognised within the financial statements.
The directors have judged that, other than the assets and liabilities recorded in the accounting records of the acquired business, the only additional assets to be recognised are certain of the trademarks acquired. The trademarks recognised are those where the directors judged that the trademarks gave rise to tangible business benefits in the form of increased revenue and / or higher margins than would otherwise be achieved. The recognised trademarks have been valued as at the date of each relevant acquisition by the directors using financial forecasts and an appropriate discount rate.
The trademarks acquired with the Dwarfs acquisition in the year have not been recognised as the directors judged that they didn’t meet the criteria for recognition.
Impairment assessments
Due to the losses incurred, impairment assessments were a mandatory requirement when preparing the financial statements. The directors identified that the appropriate cash generating units were aligned with the trading names utilised by the group when trading on marketplace platforms such as Amazon and Bol.com.
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
3.Judgments in applying accounting policies (continued)
In undertaking the assessments, the directors judged that the most appropriate basis of assessment was to estimate the value in use of the relevant asset, and the directors also had to estimate forecast cashflows and determine the appropriate discount rate to apply.
Once these assessments had been undertaken, the directors then assessed whether there was any objective evidence that those impairments existed as at 31 December 2022, using information that was available at the date of approval of the previous year financial statements. As a result of this assessment the directors recognised an impairment charge of £38.0 million in the current year and £2.2 million for the year ended 31 December 2022.
Amendment to loan agreements
The Company entered into a loan agreement in 2021, which was amended in 2022 and again in 2023. The directors assessed if the modification was substantial, and hence whether the existing loans would be derecognised and the amended loan agreement recognised as a new loan. On the derecognition of a loan, any loan transaction costs relating to the initial loan agreement which have yet to be expensed are written off and any costs associated with the amendment are spread over the amended loan term using the effective interest rate method. The directors assessed that the loan amendments were not substantial modifications and hence the original loan transaction costs continue to be expensed over the life of the loan and the loan amendment fees were expensed as incurred.
Recognition of deferred tax assets
The Company and Group have substantial tax losses; the directors have judged that, at the time of approval of the financial statements, it is not probable these losses will be able to be used in the future and hence no value is attributed to these losses.
Estimates
The directors have identified that the following estimates have a significant risk of potentially causing material adjustments to the carrying amounts of assets and liabilities within the next financial year.
Impairment of goodwill and trademarks
The impairment assessments of goodwill and trademarks is based on the forecast results for the relevant cash generating units. If the actual results are less than forecast, then the relevant assets may be impaired in value. If the actual results exceed the forecasts, then the impairments of trademarks may need to be written back in full or in part.
Contingent consideration
The Group has acquired businesses for which part of the consideration is contingent on future performance. A financial liability for contingent consideration has been recognised as management has applied judgement and concluded that, based on forecast results for the business, payments are probable and that a reliable estimate can be made.
In line with the accounting policy the liability is measured at the present value of the estimated future payments using a discount rate that reflects the conditions at the acquisition date. As part of the acquisition process, a forecast is prepared of the financial performance of the business over the earn-out period. These forecasts are regularly reviewed and updated based on actual performance of the acquired business following the transaction. The liability recognised for contingent consideration, which reflects the time value of money, was £2.0 million (2022 - £6.3 million).
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The whole of the turnover is attributable to its business activities, with circa 96% (2022 - 96%) of revenue being generated from retail sales, with the balance coming from wholesale and other revenue.
Analysis of turnover by country of destination:
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The operating loss is stated after charging:
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Amortisation of trademarks
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Exceptional items - impairment of intangible assets
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During the year, the Group obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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The directors were remunerated by the parent company in 2023 and 2022.
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Interest payable and similar expenses
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Other loan interest payable
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Origination and reversal of timing differences
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Taxation on loss on ordinary activities
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
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Non-tax deductible amortisation of goodwill and impairment
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Group relief for which no payment is made
|
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Movement in deferred tax not recognised
|
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|
|
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Difference in rate of tax US vs UK
|
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|
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Increase in rate of UK tax
|
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Disallowable expenses and other differences leading to an increase (decrease) in the tax charge
|
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|
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Factors that may affect future tax charges
|
The Group has substantial accumulated tax losses, which are currently unrecognised. Future tax charges may be reduced by the recognition of these losses.
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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On acquisition of subsidiaries
|
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Adjustment to contingent consideration
|
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Foreign exchange movement
|
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Charge for the year on owned assets
|
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Foreign exchange movement
|
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Intangible assets (continued)
|
|
The impairment charges detailed above are recognised as part of administrative expenses.
The impairments have been assessed based on the estimation of the value in use of the relevant assets, determined using forecasts of future cash flows arising from each relevant cash generating unit, discounted at a rate which reflects the Group’s cost of capital and a risk premium reflecting the nature of the business activities.
As detailed in the strategic report, the markets in which the Group operates faced challenges in the period and subsequently, arising from increased energy costs, increased interest rates, reductions in discretionary consumer spending and, latterly, tariffs on US imports. As a result, many of the Group’s brands underperformed and as a consequence the associated goodwill and the associated trademarks have become impaired in value.
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
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Acquisition of subsidiary
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|
|
|
|
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|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
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|
|
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OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
13.Tangible fixed assets (continued)
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|
|
Charge for the year on owned assets
|
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|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Investments in subsidiary companies
(as restated)
|
|
|
|
|
|
|
|
|
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|
|
|
|
Adjustments to contingent consideration
|
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|
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|
|
The impairment charges detailed above are recognised as part of the Parent Company’s administrative expenses.
The circumstances giving rise to the impairments are the same as those detailed in Note 12.
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Direct subsidiary undertakings
|
|
|
The following were direct subsidiary undertakings of the Company:
|
|
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|
|
|
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|
|
124 City Road, London, EC1V 2NX
|
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|
|
124 City Road, London, EC1V 2NX
|
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|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
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|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
Personal Grooming Co Ltd*
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
Shellco 2021 Limited (formerly Bakblade Limited)
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
124 City Road, London, EC1V 2NX
|
|
|
|
|
251 Little Falls Drive, Wilmington, DE 19808
|
|
|
|
Olsam E-Commerce
(Shenzhen) Co. Ltd
|
Room 2003T7, Block A, Galaxy Century, Caitian Road 3069, Gangxia Community, Futian Street, Futian District, Shenzhen, Guangdong Province, China
|
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|
Europalaan 101, 3526 KR in Utrecht, The Netherlands
|
|
|
|
*For the year ended 31 December 2023 these entities have taken advantage of the exemption from audit as conferred by s479 of the Companies Act 2006 (parent company guarantee).
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Indirect subsidiary undertakings
|
|
|
The following were indirect subsidiary undertakings of the Company:
|
|
|
|
|
|
|
|
|
16192 Cosastal Highway, Lewes, Delaware 19958, County of Sussex
|
|
|
|
Starlight Marketplaces Inc
|
600 N Broad Street, Suite 5, #483, Middletown, DE 19709
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Königsallee 92a, 40212 Düsseldorf
|
|
|
|
Dwarfs Patents & Trademarks B.V.
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
Dwarfs International B.V.
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
|
Atoomweg 50, 3542 AB Utrecht
|
|
|
|
Finished goods and goods for resale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The difference between purchase price or production cost of stocks and their replacement cost is not material.
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings (as restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other taxation and social security
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings are due to the Company's parent undertaking. The balance is unsecured, interest free, has no fixed date of repayment and is repayable on demand.
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loans - Company
The Company has a financing facility in place with NorthWall Capital through Denali European Opportunities DAC with Facilities of £27.5m (Term A) and €9m (Term B). As at year-end, all of the Term A facility had been drawn and none of Term B had been drawn. The balance above includes payment in kind (PIK) notes relating to interest capitalised rather than paid of £3.6 million and is stated after prepaid loan set up costs of £0.5 million.
The loan and PIK notes bear cash interest of EURIBOR rate plus 1% which is payable on a monthly basis. The loan principal plus the PIK notes are repayable at the loan maturity date of 31 December 2025, with an option to extend to 31 December 2026. A monitoring fee of 2% is charged annually on the loans.
Other loans - Group
The terms of the loan in place with the Group's parent subsidiary, Olsam OpCo Limited, are stated in the above Company disclosure.
The Group's subsidiary, Dwarfs B.V., has a financing facility in place with NorthWall Capital throughDenali European Opportunities DAC with a term loan commitment of €30m, being Facility A for €15m and Facility B for €15m. As at year-end all of the loan facilities have been drawn. The balance above includes payment in kind (PIK) notes relating to interest capitalised rather than paid of £6.0 million.
The loan and PIK notes bear cash interest of EURIBOR rate plus 1%, which is payable on a monthly basis. The loan principal plus PIK notes are repayable at maturity date of 31 December 2025, with an option to extend to 31 December 2026. A monitoring fee of 2% is charged annually on the loans.
Other loans - security
The loans are secured by fixed and floating charges over the Group's assets.
Other creditors
The other creditors relate to deferred and contingent consideration due on business acquisitions.
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
Charged to other comprehensive income
|
|
|
|
Arising on business combinations
|
|
|
|
|
|
|
|
|
The provision for deferred taxation is made up as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arising on fair value adjustments on assets recognised on acquisition
|
|
|
|
|
|
|
|
|
|
The deferred tax is expected to reverse over the next 8 years (2022 - nine years).
|
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
|
|
100 (2022 - 100) Ordinary shares of £1.00 each
|
|
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Foreign exchange reserve
The foreign exchange reserve relates to foreign exchange differences arising on the consolidation of subsidiaries with functional currencies other than Sterling.
Profit and loss account
The profit and loss account represents the accumulated losses arising since inception.
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Olsam Group Limited (the Company’s then parent) acquired the entirety of the Dwarfs B.V. share capital on 21 December 2023 by way of a share for share exchange and then immediately transferred the ownership of Dwarfs to the Company for a consideration of £1.
Dwarf B.V. is a Netherlands based group having the same principal activities as the Group. The acquisition of Dwarfs was undertaken to provide synergies within the enlarged group and gave the Group access to cash held by Dwarfs, additional brands and the associated revenue, additional talent and an expansion of the marketplace capabilities to include selling on Bol.com in the Netherlands. Subsequent to, and dependent on, the acquisition the lender to the enlarged group amended the loans to the Company and to Dwarfs.
|
|
Acquisition of Dwarfs B.V.
|
|
|
Recognised amounts of identifiable assets acquired and liabilities assumed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other creditors
|
|
|
|
|
|
|
|
|
|
|
|
Total Identifiable net liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase consideration
|
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
23.Business combinations (continued)
|
|
|
|
|
|
|
|
|
|
Directly attributable costs
|
|
|
|
Total purchase consideration
|
|
|
|
Cash outflow on acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase consideration settled in cash, as above
|
|
|
|
Directly attributable costs
|
|
|
|
|
|
|
|
Less: Cash and cash equivalents acquired
|
|
|
|
Net cash inflow on acquisition
|
|
|
|
Prior to acquisition, Dwarfs was facing the same market challenges as the Group and was also incurring substantial losses due to its investments in operational capabilities. As detailed in the Strategic Report these challenges have continued subsequently. As a result the directors judged that the trademarks acquired with the business didn’t fall to be recognised as part of the acquisition accounting and hence goodwill above includes these trademarks.
However, the most significant element of goodwill arises solely due to the deficiency of assets acquired and in particular the loans as detailed above.
This goodwill has been fully impaired as at 31 December 2023.
|
|
|
The results of Dwarfs B.V. since acquisition are as follows:
|
|
|
|
|
|
Current period since acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) for the period since acquisition (excluding impairment of goodwill)
|
|
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Parent Company has guaranteed the borrowing of its subsidiary Dwarfs B.V. amounting to £31.3 million (2022 - £nil) as at the year end.
As disclosed in note 15, the Company has issued a statutory guarantee to certain subsidiaries resulting in their exemption from audit under s479a of the Companies Act 2006. The Company has therefore guaranteed all outstanding to which the relevant subsidiaries are subject to at the balance sheet date until they are satisfied in full and this guarantee is enforceable against the Company by any person to whom the subsidiary is liable in respect of those liabilities.
|
|
Commitments under operating leases
|
|
|
At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related party transactions
|
|
|
The Company has taken advantage of the exemptions from disclosing transactions with wholly owned related companies under the provisions of Section 33 of FRS 102.
Key management remuneration was £283,243 (2022 - £nil as all members of key management were remunerated by the then parent company).
|
As at 31 December 2023, the Company’s immediate and ultimate parent company, and its ultimate controlling party, was Olsam Group Limited, a company incorporated in England and Wales.
In August 2024, Fairweather Bidco Limited, a Guernsey registered company, became the immediate parent company. The ultimate owner of Fairweather Bidco Limited are funds managed by North Wall Capital LLP (“NorthWall Capital”), a limited liability partnership registered in England and Wales. The Group’s lender Denali European Opportunities DAC is also owned by funds managed by NorthWall Capital.
|
|
OLSAM OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Post balance sheet events
|
Change of ownership, restructuring and extinguishment of group indebtedness
On 13 August 2024, the group underwent a restructuring whereby control of Olsam OpCo Limited and its subsidiaries passed to a new parent company, Fairweather BidCo Limited, a Guernsey company managed by NorthWall Capital. The liabilities owing by the Company and its subsidiaries to Olsam Group Limited were extinguished. As at 31 December 2023, these liabilities amounted to £23.1 million.
On 24 October 2024, administrators were appointed to Shellco 2021 Limited which owned the Group’s Bakblade business. The administrators immediately sold the business to another subsidiary company; it is expected that Shellco 2021 Limited will be liquidated in due course. There has been no change to the Group’s business activities as a result of this; however the Group has avoided exposure to liabilities of circa US$4 million.
Waiver of amounts due to the lender and additional borrowings
Following the change of ownership, £12.5m of loan capital and £3.9m of interest accrued as at 31 December 2023 were waived by the lender. In addition, the lender provided additional funding by way of a capital contribution of £8.5m for working capital purposes, and further acquisition financing (see below).
The directors are in negotiations with the lender to obtain an additional waiver of loans and accrued interest totalling £31.3 million as at 31 December 2023.
Acquisition
On 31 July 2025, the Group completed the acquisition of the business and assets of an Australian based brand that operates in the personal care category. The consideration was in the form of cash and deferred and contingent consideration, with the cash being funded from additional borrowings. The acquisition is expected to deliver annual EBITDA in excess of AUS$3.0m.
|