The director presents the strategic report for the year ended 31 December 2024.
Principal activity
The principal activity of BGC South Ltd is that of garden centre retailers.
The Director aims to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. The review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties that are faced.
The year ended 31 December 2024 saw the continuation of the refurbishment and development programme of the centres acquired in previous years. This programme continues to be effective resulting in sales increase of 3.1% from previous years.
Moving into 2025 trading has been positive in Q1 and already ahead of 2024. As in previous years, 2025 has been impacted by the continuing rising costs of labour due to NMW and NI increases. The directors continue to strive to run the company as efficiently as possible while still delivering a value for money garden centre experience.
BGC South Ltd's key financial and other performance indicators during the year were as follows:
2024 2023
Turnover 86,868,788 83,830,074
Gross profit margin 27.6% 25.1%
Profit before tax 1,646,920 406,769
Other performance indicators such as footfall per centre and average spend per customer are monitored closely by the Director.
The business environment in which BGC South Ltd operates continues to be challenging and the principal risks and uncertainties to the business are considered to be:
Global economic uncertainty
The global economy is presently suffering with uncertainty as countries across the world continue to deal with the current economic impact and consequences. This uncertainty has only been further increased by the recent events in Ukraine. Whilst these events are clearly outside the control of the Director, they do have an impact on the trading environment for BGC South Ltd, and the Director continues to keep abreast of these events.
Weather risk
One of BGC South Ltd's principal risks is the weather. Adverse weather can impact on footfall and sales of certain product lines at key trading times of the year. BGC South Ltd diversifies its product offering and attractions to mitigate and spread this risk as far as able.
Supply chain risk
BGC South Ltd maintains strong relationships with its key suppliers. Notwithstanding this, there is presently increased levels of uncertainty around supply chains generally, particularly in terms of bringing in goods from overseas, cost prices and surcharges. The Director regularly reviews trading terms and monitors alternative supply options.
National wage legislation
BGC South Ltd has a substantial number of employees and payroll costs is the largest overhead. Staffing levels are monitored on a daily basis in line with other factors such as the weather and expected footfall and staff numbers are adjusted accordingly.
Currency and Brexit risk
BGC South Ltd trades with foreign suppliers and is therefore exposed to currency fluctuations and any potential issues caused by Brexit. The situation post-Brexit continues to be monitored, and appropriate action is being taken by the Director as becomes relevant.
Interest rate risk
In line with other businesses BGC South Ltd is exposed to interest rate increases and continues to review interest rate mitigation options to manage the risk posed by increased rates.
The Director, in line with their duties under s172 of the Companies Act 2006, is constantly considering the most likely approach to promote the success of BGC South Ltd for the benefit of its shareholders, and in doing so has regard to a range of matters when making decisions for the long term. Key decisions and matters of strategic importance to BGC South Ltd are appropriately informed by s172 factors, including:
· the likely consequences of any decisions in the long-term;
· the interests of the company’s employees;
· the need to foster the company’s business relationships with suppliers, customers and others;
· the impact of the company’s operations of the community and environment;
· the desirability of the company maintaining a reputation for high standards of business conduct; and
· the need to act fairly between members of the company.
Through an open and transparent dialogue with key stakeholders, the Director has been able to develop a clear understanding of their needs, assess their perspectives and monitor their impact on the strategic ambition and culture.
As part of management’s decision-making process, the potential impact of decisions on relevant stakeholders are considered, whilst having regard to a number of broader factors, including the impact of BGC South Ltd operations on the community and environment, responsible business practices and the likely consequences of decisions in the long term.
Engagement with employees
Engagement with employees is displayed with the Director’s Report under Employee involvement.
Engagement with suppliers
The Director recognises that relationships with suppliers are important to BGC South Ltd.'s long-term success and is briefed on supplier feedback and issues on a regular basis. The Director seeks to balance the benefit of maintaining these strong relationships along with the need to obtain value for money for the shareholders and desired quality for customers. In all key decisions made by the Director, the working relationship with suppliers is a key factor with well-developed supply chains in place.
Engagement with customers
The success of the business is underpinned by providing excellent customer services and understanding their needs and requirements. A core principle of the business is to be customer centric and provide a high level of service through the expert knowledge of our employees and ensuring quality products. BGC South Ltd.'s approach to fostering good relationships with customers can be seen through the large footfall of customers, continued return visits and the engagement with customers to offer a first-class retail and leisure experience. This continues to be supported in 2024 by the customer loyalty scheme.
Engagement with communities
The Director supports initiatives with regards to reducing the adverse impacts on the environment and engages with the communities in which we operate. Key areas of focus include how we can support local causes and issues, create opportunities to recruit and develop local people and help to look after the environment.
Engagement with Government and regulations
BGC South Ltd engage with the government and regulators through a range of industry consultations, forums, and meetings to communicate views to policy makers relevant to the business. Key areas of focus are compliance with laws and regulations, health and safety and product safety. The Director is updated on legal and regulatory developments and takes these into account when considering future actions.
Engagement with investors
BGC South Ltd relies on our shareholders and providers of debt funding as essential sources of capital to further the business objectives. Investor involvement in the decision-making process is done through regular consultation.
BGC South Ltd has open dialogue with investors through regular meetings which cover a wide range of topics including financial performance, strategy, outlook and governance.
Approved by the Board and signed on its behalf by:
The director presents her annual report and financial statements for the year ended 31 December 2024.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The overall objective of the Director is to ensure that the business is profitable and stable and will continue to be successful for the benefit of the shareholders and employees.
BGC South Ltd’s principle financial instruments comprise bank balances, trade debtors, trade creditors and loans. The main purpose of these instruments is to finance the business’ operations.
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of a seasonal loan facility at a fixed rate of interest.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offer to customers and the regular monitoring of amount outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
The business’ policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees’ interests.
Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company’s performance.
Plans are in place to continue a programme of refurbishing and developing many of the centres acquired in recent years to enhance the offering to customers and further cement BGC South Ltd's reputation as a key operator in the industry. Additionally, the Director continues to assess further possible acquisition opportunities.
In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the group will be put at a General Meeting.
The UK annual quantity of emissions (in tonnes) of carbon dioxide equivalent resulting from the combustion of gas was 1,043 Carbon Tonnes (5,696,681 kwh), (2023: 1,092 Carbon Tonnes (5,964,522 kwh)).
The UK annual quantity of emissions (in tonnes) of carbon dioxide equivalent resulting from the purchase of electricity for own use was 843 Carbon Tonnes (3,968,165 kwh), (2023: 880 Carbon Tonnes (4,145,373 kwh)).
The UK annual quantity of emissions (in tonnes) of carbon dioxide equivalent resulting from fuel for use in owned transport was 189 Carbon Tonnes (189,155 kWh), (2023: 177 Carbon Tonnes (176,786 kWh)).
BGC South Ltd uses a range of methodologies to calculate the above information, including utility bills and the UK Government GHG Conversion Factors for Company Reporting.
BGC South Ltd engages 1,357 members of staff, and uses 2,075 Carbon Tonnes of energy, equating to 1.53 Carbon Tonnes per member of staff, (2023: 1,386 members of staff, and uses 2,149 Carbon Tonnes of energy, equating to 1.55 Carbon Tonnes per member of staff).
BGC South Ltd is committed to improving energy efficiency and has undertaken a programme to introduce energy efficient light bulbs across all centres and has commenced a programme to introduce more efficient cooking methods across all kitchens.
In addition, the Company is investigating the installation at centres of recycling equipment, solar panels, and air source heat pumps and the introduction of electric vehicles.
The director is responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We have audited the financial statements of BGC South Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the group and company through discussions with directors and other management, and from our commercial knowledge and experience of the garden centre sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, employment, environmental, health and safety legislation, food safety, sale of goods, and consumer rights;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risks of fraud through management bias and override controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
discussions with senior management regarding relevant regulations and reviewing the company’s legal and professional fees.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director’s and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,071,997 (2023 - £597,712 profit).
BGC South Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Brigg Garden Centre, Bigby High Road, Brigg, North Lincolnshire, DN20 9HE.
The group consists of BGC South Ltd and all of its subsidiaries.
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, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company BGC South Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving, the Director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Specifically, the director has considered the impact of any supply chain disruptions, labour shortages, as well as the wider economy. Whilst it is not considered practical to accurately assess the duration and extent of any disruption, the director is confident that they have in place plans to deal with any implications that may arise.
The company and group continues to trade in line with expectations and has continued to generate profits and operating cash flows. The group has net current assets of £4,836,380 and has undergone a refinancing exercise in the period. Further details can be found in note 19 and 24 to the accounts.
Given this position, the Director has options available to them in order to preserve cash flow and allow the business to settle its liabilities as they fall due. The director therefore continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
The freehold land and buildings are not depreciated. It is the Director's assessment that the lives of these assets are so long and the residual values, based on prices and information prevailing at the time of assessment, are in excess of the assets carrying resulting in no depreciation charge being required.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its 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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 profit and loss account, 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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
In the application of the group’s accounting policies, the director is 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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
The company establishes provisions based on reasonable estimates, for possible consequences of audits by the tax authorities.
At each reporting date and assessment is made for provisions required to recognise damaged, slow moving and obsolete goods. Any excess of the carrying amount of stock over its estimated selling price less costs to sell is recognised as an impairment loss in profit and loss and provided for in the balance sheet. Reversals of any provisions are also recognised in profit and loss.
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually and are amended when necessary to reflect current estimates. During the year, the director reassessed the residual values of the freehold property and have deemed the residual value to be in excess of its carrying value. As a result of this assessment, no depreciation has been charged during the year on freehold property.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The director did not receive remuneration from the group.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The carrying value of land and buildings comprises:
Details of the company's subsidiaries at 31 December 2024 are as follows:
The subsidiary companies, with the exception of Invalesco Limited, hold property on behalf of the parent company, BGC South Ltd. These companies did not trade during the year.
Loan 1
The debenture loan was fully repaid in the year.
Loan 2 - carrying value of £12,000,000
The bank loan of £12,000,000 was drawn down in December 2024 and is repayable over 5 years with an interest rate of 2.1% above the SONIA rate.
Loan 3 - carrying value of £4,000,000
The loan of £4,000,000 was drawn down in December 2024 from a partnership in which the company director is a member. The loan is repayable in over 1 year. The loan is interest free. The loan of £5,950,000 from 2023 was fully repaid in December 2024.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The leases are secured over the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Of the deferred tax liability set out above, £360,000 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. At the year end there was a balance of £70,748 (2023: £69,801) outstanding.
Each class of share has voting rights. There are no restrictions on the distribution of dividends and the repayment of capital.
On 19 December 2019 the company entered into a cross guarantee agreement along with its fellow subsidiaries relating to loan notes totalling £10,000,000 issued in the Company. The guarantee is secured by a fixed and floating charge over the company's assets. The loan notes were settled in full in December 2024.
In December 2024 the company entered into a loan agreement with HSBC for £12,000,000. The following security is in place:
-Debentures in favour of HSBC from BGC South Limited and its subsidiaries
-Guarantee in favour of HSBC from BGC South Limited and its subsidiaries
-Legal mortgage from BGC South Limited and its subsidiaries in respect of various freehold properties owned by BGC South Limited and its subsidiaries
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the period, the company made purchases and sales of garden equipment and management charge expenses totalling £5,624,236 (2023: £1,979,433) and £162,447 (2023: £619,984), respectively from Woodthorpe Hall Garden Centres Limited, a company in which P Stubbs is secretary and whose husband is a director of. At the balance sheet date, amounts totalling £3,262,266 (2023: £2,770,109) were owed to Woodthorpe Hall Garden Centres Limited and Woodthorpe Hall Garden Centres Limited owed the company £744,209 (2023: £744,209).
During the period, the company made purchases totalling £nil (2023: £318,904) from Altia Estates (Nott) Limited, a company in which H Harker's husband is a director. At the balance sheet date, amounts totalling £nil (2023: £318,904) were owed to Altia Estates (Nott) Limited.
During the period, the company made rental payments of £2,406,778 (2023: £2,483,582) and sales of £nil (2023: £641) to Altia Estates Ltd, a company in which H Harker is a director. In addition, loan advances were made totalling £nil (2023: £4,950,000). At the balance sheet date, amounts totalling £25,430 (2023: £6,010,641) were owed to Altia Estates Ltd. The loan terms are detailed in note 19 which states that the final repayment is due on 10 September 2022. The loan has been fully repaid in the year to 31 December 2024.
During the period, the company made purchases from Altico Garden Products Ltd totalling £567,063 (2023: £506,733), a company with connections to the family of a shareholder. At the balance sheet date amounts totalling £43,601 (2023: £56,402) were owed to Altico Garden Products Ltd.
Included in creditors due within one year are balances due to the director, which is shown below. This loan is interest free and repayable on demand.