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Registered number: 06708087
CHIPOTLE MEXICAN GRILL UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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CHIPOTLE MEXICAN GRILL UK LIMITED
COMPANY INFORMATION
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K J Slater (resigned 22 March 2024)
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B Williams (appointed 5 March 2024, resigned 22 May 2025)
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A Davidzon (appointed 31 October 2024)
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A M Dannatt (appointed 22 May 2025)
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Oakwood Corporate Secretary Limited
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Chartered Accountants & Statutory Auditor
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CHIPOTLE MEXICAN GRILL UK LIMITED
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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CHIPOTLE MEXICAN GRILL UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present the strategic report and financial statements for the year ended 31 December 2024.
Business review and fundamentals
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Chipotle Mexican Grill UK Limited ("CMG UK", "we", "our") develops and operates fast-casual restaurants which serve a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla), quesadillas, and salads. We are cultivating a better world by serving responsibly sourced, classically cooked, real food with wholesome ingredients without artificial colours, flavours or preservatives. We are passionate about providing a great guest experience and making our food more accessible to everyone while continuing to be a brand with a demonstrated purpose. When Steve Ells, founder, first opened Chipotle starting with a single restaurant in Denver, Colorado in 1993, the idea was simple: show that food served fast didn't have to be a typical "fast food" experience. Using high-quality real ingredients, classic cooking techniques, and distinctive interior design, we brought features from the realm of fine dining to the world of quick-service restaurants. Over 30 years later, our devotion to seeking out the very best ingredients, raised with respect for animals, farmers, and the environment, remains at the core of our commitment to Food With Integrity.
As of December 31, 2024, CMG UK had 19 restaurants in operation in the United Kingdom.
Revenue for the full year of 2024 was £34.6 million (2023: £26.3 million), an increase of 32% versus the prior year.
Our Cost of Sales for the full year of 2024 was £36.2 million (2023: £29.5 million). Refining our long-term supply strategy for our European locations remains an important objective. We also continue to focus on labour costs as we strengthen our teams and become more efficient in serving our customers. Lastly, we are focused on growing our delivery business while effectively managing the costs associated with this sales channel. Loss for the full year of 2024 was £18.1 million (2023: £12.5 million).
Principal risks and uncertainties
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Continued development in the United Kingdom will partially depend on the ability of CMG UK to generate strong sales and returns for our investors. Specifically, due to lower consumer familiarity with the Chipotle brand, differences in customer tastes or spending patterns, or for other reasons, sales at restaurants may take longer to ramp up and reach expected sales and profit levels, and may never do so. To build brand awareness, CMG UK continues to make greater investments in advertising and promotional activity which could negatively impact our profitability. We may also find it more difficult to hire, motivate, and keep qualified employees who can project our vision, passion, and culture. Difficulty finding reliable suppliers and distributors of our food may pose added uncertainty to our success.
We believe we are a leader in food safety practices; however, instances of food borne illness, real or perceived, whether at our restaurants or those of our competitors, may subject us to liability to affected customers, and could result in negative publicity about us or the restaurant industry that adversely impacts our sales.
Key performance indicators
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CHIPOTLE MEXICAN GRILL UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
CMG UK continues to drive operational improvements and develop opportunistically as our brand gains traction and we create a deep pipeline of future restaurant leaders. We will continue to focus on enhancing the digital capabilities in the UK restaurants to accelerate revenue growth and profitability in the future. We opened three new UK restaurants and we had one store closure in 2024. There has been 1 store opening in the UK in 2025. No other openings are currently scheduled to be opened in 2025 within the UK.
Directors' statement of compliance with duty to promote the success of the Company
Section 172 of The Companies Act 2006 states that “a director of a company must act in the way he/she considers, in good faith, would be most likely to promote the success of the group for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
a. the likely consequences of any decision in the long-term;
b. the interests of the group’s employees;
c. the need to foster the group’s business relationships with suppliers, customers and others;
d. the impact of the group’s operations on the community and the environment;
e. the desirability of the group maintaining a reputation for high standards of business conduct; and
f. the need to act fairly as between members of the group.”
In discharging this section 172 duty the Directors of CMG UK, have regard to the factors set out above. In accordance with our responsibilities and duties under section 172 of the Companies Act 2006, the following outlines our engagement with our stakeholders:
Employees
CMG UK currently operates 19 restaurants across the UK. The business hires various restaurant employees covering a range of roles including hourly crew members, crew trainers, kitchen leaders, service leaders, Apprentice General Managers and General Managers. We also employ 25 corporate staff who cover a range of functions across the company that include finance, IT, marketing, HR, supply chain, legal and field support for UK operations.
Suppliers and Partners:
Chipotle Mexican Grill, Inc., the ultimate parent company of CMG UK, has a Supplier Engagement Program which is highly focused on providing our customers the best experience, mitigating supply risks factors, fair payment (agreed terms and on time) with a strong focus in environmental and sustainable principles. We seek out suppliers who share and champion our core values, and act with honesty and integrity. We are committed to complying with the law and maintaining the highest standards of honesty, integrity, and conduct. We proudly do business with suppliers who uphold the same principles as per below.
• Food with Integrity: Since the first Chipotle opened in 1993, we’ve served fresh, wholesome ingredients prepared using classic cooking techniques. It has always been a top priority to ensure our food is safe, delicious, and made from responsibly sourced ingredients.
• Food Safety: We work to ensure all the food CMG UK serves is safe, wholesome, and delicious.
• Quality: We assure the quality of our food across a significant number of metrics including animal welfare, environmental considerations, and taste. We also measure the quality against the standards we set for dairy and meats from animals raised responsibly.
• Efficiency: Our approach to efficiency is founded on establishing long-term relationships with our suppliers. We work to help them meet our exacting sustainability and quality standards while setting equitable prices.
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CHIPOTLE MEXICAN GRILL UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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Directors' statement of compliance with duty to promote the success of the Company (continued)
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CMG UK constantly works on ensuring the supply chain is:
• Operating with partners that thrive ethically and sustainable (reducing carbon emissions, waste, animal welfare)
• Compliant with applicable laws and with our Supplier Code of Conduct.
Chipotle Mexican Grill supply chain program is an integral part of its sustainability strategy. By incorporating good principles of economic, social, and environmental sustainability into the business, it can create more value for customers, contribute to more sustainable economies and communities, engage employees, and forge better relationships with stakeholders, including suppliers.
Health and safety
At CMG UK we partner with third parties to ensure we maintain full regulatory compliance when it comes to health and safety. All employees receive a Health and Safety induction packet that they must compete as part of their onboarding. This induction provides preventative training and advises on our process and procedure around areas such as manual handling, fire, workplace accidents and COSSH training. We complete regular First Aid training to ensure we have First Aid designates in all of our restaurant and corporate locations. We have recently rolled out mental health training and are in the process of appointing Mental Health First Aiders in the business.
Training and development
Our teams follow a thorough onboarding and training plan upon arrival at our restaurants. Station training in the restaurants is compulsory and we have regular training validation visits to ensure that our teams have the necessary technical expertise to perform in role in our restaurants. For our corporate staff, we engage in regular leadership development training which is facilitated in house. We also partner with MasterClass to provide our employees with an online educational library to drive personal and professional development.
Society and environment
CMG UK’s purpose is to Cultivate a Better World. This includes supporting the communities in which we operate and maintaining a firm stance on doing what is right by our people and the planet. Our supply chain team follow strict guidelines on animal welfare and we engage in regular quality control visits to our farms to ensure standards are met. We strive to provide best in class benefits to our employees. Based on a recent analysis, our mean and median gender pay gap within the UK is 16.1% and 1.8% respectively and we are working to make adjustments to close those gaps.
This report was approved by the board and signed on its behalf.
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CHIPOTLE MEXICAN GRILL UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company'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; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £18,078,309 (2023: loss £12,513,065).
No ordinary dividends were paid. The directors do not recommend payment of a final dividend (2023: £Nil).
The directors who served during the year were:
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K J Slater (resigned 22 March 2024)
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B Williams (appointed 5 March 2024, resigned 22 May 2025)
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A Davidzon (appointed 31 October 2024)
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CHIPOTLE MEXICAN GRILL UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Economic impacts of global events
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UK businesses are currently facing many uncertainties, including environmental sustainability, macroeconomic and geopolitical events. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
CMG UK continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
We champion visible leadership and have an open-door policy between our Restaurants and our Corporate teams. We facilitate quarterly ‘points of view’ sessions where we welcome our restaurant teams to discuss their needs in an open forum.
We champion diversity and provide training to our Hiring Managers on the importance of accessibility and removing bias from decision making when it comes to talent selection. We provide every employee with training on our Code of Ethics which includes the importance of driving inclusivity in the workplace. The HR teams work directly with individuals where reasonable work adjustments might be needed to support performance.
Engagement with suppliers, customers and others
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We have long term contracts with reputable suppliers to mitigate pricing and other supply chain risks. We continue to believe our commitment to higher-quality and responsibly sourced ingredients resonates with our customers and we strive to provide a consistent guest experience in all of our locations. When deemed necessary Chipotle Mexican Grill, Inc., the US parent entity, will provide intercompany loans to finance ongoing operations of CMG UK. CMG UK does not hold debt with external financial institutions.
Qualifying third party indemnity provisions
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Chipotle Mexican Grill UK Limited's ultimate parent Chipotle Mexican Grill, Inc. entered into indemnification agreements with each of our directors. These agreements require us to indemnify such individuals to the fullest extent permitted by Delaware (U.S.) law, for certain liabilities to which they may become subject as a result of their affiliation with us.
Directors' statement of compliance with duty to promote the success of the Company
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Greenhouse gas emissions are measured and calculated according to the principles in the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol’s “A Corporate Accounting and Reporting Standard, 2004 revised edition” (GHG Protocol). All greenhouse gas emissions are expressed as metric tonnes of carbon dioxide equivalents. Primary data are used to calculate emissions for both Scope 1 and 2 emissions. Estimates are used where primary data are not available. Depending on the type of site, the estimation methodology uses location square footage and average energy consumption published by the Community Buildings Energy Consumption Survey (CBECS). Global warming potentials reference the 100-year Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6). Chipotle follows the GHG Protocol operational control method.
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CHIPOTLE MEXICAN GRILL UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
UK Operations Scope 1 and 2 Greenhouse gas (GHG) emissions (MTCO2e)
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Emissions from activities for which the company owns or controls, including combustion of fuel & operation of facilities (Scope 1) steam and cooling (Scope 2) - location-based
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Emissions from purchase of electricity, heat, steam and cooling (Scope 2) - location-based
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Emissions from purchase of electricity, heat, steam and cooling (Scope 2) - market-based
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Total Scope 1 and Scope 2 location-based emissions
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Total Scope 1 and Scope 2 market-based emissions
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Intensity Ratio (MTCO2e/m2 of floor area)
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Energy efficiency initiatives
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We have established weekly dashboard and alerts of energy usage at the restaurants. These weekly alerts provide greater visibility into inconsistencies and outliers in energy usage to our teams to investigate and address as needed.
Disclosure of information to auditors
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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's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting CMG UK since the year end.
The auditors, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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CHIPOTLE MEXICAN GRILL UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHIPOTLE MEXICAN GRILL UK LIMITED
Opinion
We have audited the financial statements of Chipotle Mexican Grill UK Limited (the ‘Company’) for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 Strategic Report and Directors' Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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CHIPOTLE MEXICAN GRILL UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHIPOTLE MEXICAN GRILL UK LIMITED
Other information (continued)
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the 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 intend either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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CHIPOTLE MEXICAN GRILL UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHIPOTLE MEXICAN GRILL UK LIMITED
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, and anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as: tax legislation, pension legislation, and the Companies Act 2006.
In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgments and assumptions in significant accounting estimates, in particular the impairment of tangible and intangible assets, revenue recognition (which we pinpointed to the cut-off assertion), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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CHIPOTLE MEXICAN GRILL UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CHIPOTLE MEXICAN GRILL UK LIMITED
Auditor's responsibilities for the audit of the financial statements (continued)
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit 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.
Edith Yagoh (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
2 Chamberlain Square
Birmingham
B3 3AX
30 September 2025
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CHIPOTLE MEXICAN GRILL UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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Exceptional administrative expenses
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Interest payable and similar expenses
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Loss for the financial year
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There was no other comprehensive income for 2024 (2023: £Nil).
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The notes on pages 15 to 33 form part of these financial statements.
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CHIPOTLE MEXICAN GRILL UK LIMITED
REGISTERED NUMBER: 06708087
BALANCE SHEET
AS AT 31 DECEMBER 2024
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Debtors due after more than 1 year
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Debtors due within 1 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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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 33 form part of these financial statements.
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CHIPOTLE MEXICAN GRILL UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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Comprehensive income for the year
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Comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the year
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The notes on pages 15 to 33 form part of these financial statements.
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CHIPOTLE MEXICAN GRILL UK LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
The notes on pages 15 to 33 form part of these financial statements.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Chipotle Mexican Grill UK Limited is a private company limited by shares and is registered and incorporated in England and Wales. The registered office is 2nd Floor 39-41 Shelton Street, London, WC2H 9HJ.
The company's principal activities and nature of its operations are disclosed in the Strategic Report.
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 management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Chipotle Mexican Grill Inc. as at 31 December 2024 and these financial statements may be obtained from Chipotle Mexican Grill Inc.'s website.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis. The Company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Company should be able to manage business risk successfully. After making enquiries and considering the potential future impact of rising interest rates, inflation, energy costs, and costs generally across the wider economy, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of authorisation of these financial statements. In addition, the US Parent company has pledged continued financial support to Chipotle Mexican Grill UK Limited. The Directors therefore continue to adopt the going concern basis in preparing the financial statements.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP and monetary amounts in these financial statements are rounded to the nearest £.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'administrative expenses'.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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 Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company 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 Company 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.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the statement of comprehensive income on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Finance costs are charged to the statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income 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 Company in independently administered funds.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Statement of Comprehensive Income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the Statement of Comprehensive Income is charged with fair value of goods and services received.
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 operates and generates income.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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 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 Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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15 years on the straight line basis
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over the life of the lease
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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.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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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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Land and buildings leasehold
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Assets under construction are not depreciated.
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 the Statement of Comprehensive Income.
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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.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the statement of comprehensive income.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the company's accounting policies, the directors are required to make judgments, 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.
Critical judgments
The following judgments (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:
Classification of leases under operating leases
In categorising leases as operating leases, management makes judgments as to whether significant risks and rewards of ownership have transferred to the Company as lessee.
Impairment of tangible and intangible fixed assets
Assets are reviewed for impairment at each reporting date to assess whether any current or future events and circumstances suggest that their recoverable amount may be less than the carrying value. The recoverable amount is the higher of fair value less costs to sell and the value in use. The accuracy of any such impairment calculation will be affected by unexpected changes to the economic situation, and assumptions which differ from actual outcomes. As such, judgment is applied when determining the levels of provisioning. In assessing value in use, the estimated future negative cash flows of intangible & tangible fixed assets would be a trigger for impairment. The board has reviewed the recoverability of the intangible & tangible fixed assets and has determined that impairment is not required.
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An analysis of turnover by class of business is as follows:
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Analysis of turnover by country of destination:
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The operating loss is stated after (crediting)/charging:
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Other operating lease rentals
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Depreciation of tangible fixed assets
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Amortisation of intangible assets
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During the year, the Company obtained the following services from the Company's auditors and their associates:
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Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
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Fees payable to the Company's auditors and their associates in respect of:
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Taxation compliance services
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All taxation advisory services not included above
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All non-audit services not included above
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Staff costs, including directors' remuneration, were as follows:
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The average monthly number of employees, including the directors, during the year was as follows:
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 1 director (2023 - 1) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £654,230 (2023 - £748,366).
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The number of directors that exercised share options during the year was 1 (2023: 1).
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Interest payable and similar expenses
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Interest payable to group undertakings
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Origination and reversal of timing differences
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Short term timing differences
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Losses and other deductions
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of25% (2023 - 23.5%). 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 25% (2023 - 23.5%)
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Expenses not deductible for tax purposes
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Capital allowances for year in excess of depreciation
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Movement in deferred tax not recognised
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Other tax adjustments, reliefs and transfers
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Group relief surrendered/(claimed)
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Remeasurement of deferred tax for changes in tax rates
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Other permanent differences
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Total tax charge for the year
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A deferred tax asset of £22,676,592 (2023: £18,365,904) has not been recognised due to uncertainty over timing of future profits.
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Exceptional administrative expenses
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Expenditure - impairment losses
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Please see notes 13 and 14 for further details on impairment.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Reclassification of tangible fixed assets
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Re-classification of tangible fixed assets
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The impairment relates to the impairment of the Windsor software. The app was expected to generate more revenue to the restaurants however, when management conducted an assessment on the app's impact on sales, the change in sales was not significant thus the decision to impair the asset.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Land and buildings leasehold
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Assets under construction
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Capitalised assets at the end of the year
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Re-classification of intangible fixed assets
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Re-classification of intangible fixed assets
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The impairment relates to the closure of the Watford restaurant. This is because the projected cashflows for the restaurant indicated an overall loss thus leading to management's decision to close the store.
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Finished goods and goods for resale
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are repayable on demand and accrue interest at variable rates, payable on the last day of the month.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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Losses and other deductions
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Allotted, called up and fully paid
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60,544,339 (2023: 33,134,389) Ordinary shares of £1.00 each
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Each ordinary share carries one vote in general meetings, entitles the holder to participate in dividends should there be sufficient profits and entitles them to a return of capital on liquidation or otherwise once liabilities have been discharged.
On 30 July 2024, 27,409,950 ordinary shares were issued for a nominal value of £1 each.
Other reserves
Other reserves include a capital contribution of $5,000,000 (£3,219,990) made on the 29 December 2014. On 31 March 2021, EMEA Tortilla Limited approved the write off and release of a related party loan due from Chipotle Mexican Grill UK Limited for the amount of £12,812,010 by way of a legal deed, being a "Debt Write Off Agreement". In accordance with FRS 102, the company has recognised this transaction as a capital contribution from its parent EMEA Tortilla Limited.
Profit and loss account
Cumulative profits and losses net of distributions to owners.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The company is part of a group share-based payment plan, and recognises and measures its share-based payment expense on the basis of a reasonable allocation of the expenses recognised for the group. The plan is operated by the ultimate parent company, the Chipotle Mexican Grill Inc and stock only appreciation rights ("SOSARs"), restricted share units ("RSUs") and performance share units ("PSUs") are granted by the parent undertaking for the benefit of employees of the Company.
The company has taken advantage of the exemptions granted by FRS102 from the disclosure applicable to subsidiary undertakings.
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The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. At the year end £31,437 (2023: £21,717) was outstanding and is included within other creditors.
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Commitments under operating leases
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At 31 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The company has taken the advantage given in FRS 102 section 33 not to disclose transactions with other wholly owned group companies.
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CHIPOTLE MEXICAN GRILL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Chipotle Mexican Grill UK is within the scope of the OECD’s Pillar Two model rules, which introduce a global minimum effective tax rate of 15% for multinational enterprises with consolidated revenues exceeding €750 million. These rules have been enacted or substantively enacted in several jurisdictions in which the Group operates, including the United Kingdom.
An assessment has been performed at the Group level to determine the potential exposure to Pillar Two income taxes. No top-up tax has been recognised in the United Kingdom, as the Company has made a loss in the year.
In accordance with the amendments to IAS 12 Income Taxes, the Company has applied the mandatory temporary exception introduced in paragraph 4A of the standard. As a result, the Company has not recognised or disclosed any deferred tax assets or liabilities related to Pillar Two income taxes in these financial statements.
The Company continues to monitor developments in the implementation of Pillar Two legislation across jurisdictions and will assess any future impact on its financial reporting.
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Post balance sheet events
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There have been no significant events affecting CMG UK since the year end.
The immediate parent company is EMEA Tortilla Limited, a company registered in the United Kingdom. The ultimate parent company is Chipotle Mexican Grill Inc., a company registered in the United States of America. The registered office is 610 Newport Center Drive, Suite 1300 Newport Beach, CA. Chipotle Mexican Grill Inc., prepares the largest and smallest group accounts that include Chipotle Mexican Grill UK Limited and copies can be obtained from the company's website at www.chipotle.com.
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