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Registered number: SC116286
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
COMPANY INFORMATION
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INNOVATE FOODS LIMITED
CONTENTS
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INNOVATE FOODS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors have pleasure in presenting their strategic report for the period ended 31 December 2023.
The company is an award-winning producer of bespoke food for the foodservice and retail sectors with a balanced portfolio of blue-chip customers in UK, EU and beyond.
The company became part of the Frostkrone Food Group in 2020, an International Group with companies in a number of different countries. The company has continued to significantly benefit from this association, through gaining greater access to in-house technical expertise within the group, sharing best practices and leveraging opportunities of scale such as consolidated purchasing activities. Despite significant macroeconomic challenges faced in 2024, not least high inflation and the ongoing cost-of-living crisis, the company was able to consolidate revenues in 2024 after a high period of revenue growth in the previous year. 2024 revenues totalled £27.0m, a 11.1% increase on the previous year. In alignment with the promise inherent in the company name, we continue to focus on new product development as a fundamental strategy to drive sustainable growth in the future. There is a vast amount of experience and know-how within the company and wider group, which has been built up over many years, and product development was a continued key focus area in 2024. Gross Profit % increased in 2024 as a result of normalising of raw material prices after increased prices as a direct impact of the Russian invasion of Ukraine that commenced in 2023. The cost of living crisis had a significantly negative effect on the foodservice sector, with people opting not to eat out in bars and restaurants so much. Retail was also adversely affected, with consumers focussing on the necessities and reigning back expenditure on discretionary purchases. Despite the pressures of high inflation and lower macroeconomic activity driven by the cost of living crisis, the company was still able to grow revenues compared with 2023 and deliver an overall profit before tax of £914k. The company maintained a strong financial position at the end of December 2024, with net assets of £8.8m, a £0.7m increase compared with the previous year. Stocks were increased by £917k, as increased sales put pressure on working capital and debtors. The company ended the year with a healthy cash balance.
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INNOVATE FOODS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The principal risks impacting the company centre around continuing volatility in market prices and external factors beyond its control, such as the Ukraine crisis, the ongoing effects of Covid-19, repercussions of Brexit, the cost of living challenges in the UK and domestic government policy.
Margins are monitored monthly and cashflow is monitored weekly. The directors make decisions to ensure that margins are maintained at a sustainable level in the long term. The effects of the Ukraine invasion during 2023 plus the lingering elements of Covid-19 have seen Innovate Foods Limited make and execute decisive judgements in order to mitigate the effects. In both retail and foodservice the costs of living crisis has impacted consumer spending decisions while upward trajectory to energy costs has also directly affected decisions taken by the hospitality sector, including temporary or permanent closure of pubs, hotels and restaurants. The directors continue to monitor the situation and develop customer solutions through efficiency in manufacturing that meet the economic realities head on. The directors believe that the company is well place to meet these challenges due to its continuing investment in people, capital equipment and new product development for its wide and balanced customer portfolio. Interest rate risk – the company currently has no bank borrowings so is not directly impacted by interest rate risks. Currency risk – the company holds a proportion of its cash balance in Euros to mitigate this risk. Foreign exchange rates are regularly monitored however the company does not hedge currency risk. Regular conversations are held with overseas and UK suppliers & partner companies to manage supply chains to best effect.
Key performance indicators are monitored over key areas including the monitoring of actual results against budget and prior periods. One of the company’s key performance indicators is turnover growth. Turnover increased by 11.1% to £27m from £24.3m in the previous year.
This report was approved by the board and signed on its behalf.
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INNOVATE FOODS 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.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
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;
∙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 profit for the year, after taxation, amounted to £704,510 (2023 - £523,822).
There are no proposed dividends for the year ended 31 December 2024. Amounts paid in the year amounted to £NIL (31 December 2023 - £NIL).
The directors who served during the year were:
Core operations remain healthy and the directors consider the business to be in a strong financial position to exploit future opportunities, working in collaboration with its sister businesses
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INNOVATE FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
There have been no significant events affecting the Company since the year end.
The auditors, Sumer Auditco Limited, 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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INNOVATE FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INNOVATE FOODS LIMITED
We have audited the financial statements of Innovate Foods Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
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INNOVATE FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INNOVATE FOODS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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INNOVATE FOODS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INNOVATE FOODS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditors
Pentland House
Saltire Centre
KY6 2AH
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INNOVATE FOODS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
REGISTERED NUMBER: SC116286
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 25 form part of these financial statements.
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INNOVATE FOODS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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INNOVATE FOODS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Innovate Foods Limited is a private company, limited by shares, incorporated in Scotland; with registration number: SC116286. The registered office address is Barncraig, Boreland Road, Kirkcaldy, Fife, KY1 2YG.
The financial statements are presented in Sterling which is the functional currency of the company and rounded to the nearest £. The principal activity of the company was that of producing and selling frozen food.
2.Accounting policies
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:
Functional and presentation currency
Transactions and balances
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Assets that are subject to depreciation are assessed at each reporting 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 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 in the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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 Statement of financial position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
The directors review the valuation method on a regular basis to ensure that the carrying value of stock remains appropriate. Due consideration is given to amounts realised following the year end in relation to stock included in the financial statements at the year end. The directors review depreciation rates on a regular basis to ensure that the policy rates remain appropriate and fairly charge the cost of fixed assets over their predicted useful lives for each specific category of fixed assets.
The whole of the turnover is attributable to frozen food products.
Analysis of turnover by country of destination:
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
There were no factors that may affect future tax charges.
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Profit and loss account
A floating charge is in place in favour of Wilmington Trust SP Services (Frankfurt) GmbH as security agent pursuant to a EUR 122,500,000 facilities agreement (originally dated 31 January 2019 and subjected to future amendments) available to other group companies.
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INNOVATE FOODS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £118,272 (31 December 2023 - £100,128). Contributions totalling £45,481 (31 December 2023 - £18,982) were payable to the fund at the reporting date and are included in creditors.
The company is a wholly owned subsidiary of Frostkrone UK Limited, a company registered in Scotland. The ultimate parent is Mozzaxx Co-Invest GmbH & Co. KG, a limited partnership registered in Germany.
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