Registration number:
John Lewis of Hungerford Limited
for the Year Ended 30 June 2024
John Lewis of Hungerford Limited
Contents
|
Company Information |
|
|
Strategic Report |
|
|
Directors' Report |
|
|
Statement of Directors' Responsibilities |
|
|
Independent Auditor's Report |
|
|
Profit and Loss Account |
|
|
Statement of Comprehensive Income |
|
|
Balance Sheet |
|
|
Statement of Changes in Equity |
|
|
Statement of Cash Flows |
|
|
Notes to the Financial Statements |
John Lewis of Hungerford Limited
Company Information
|
Directors |
Ms Kiran Noonan Ms Sophie Randall |
|
Company secretary |
Cargil Management Services Limited |
|
Registered office |
|
|
Auditors |
|
John Lewis of Hungerford Limited
Strategic Report for the Year Ended 30 June 2024
The Directors present their strategic report for the year ended 30 June 2024.
Principal activity
The principal activity of the Company is the manufacture of kitchen furniture.
Introduction
John Lewis of Hungerford is a leading UK provider of luxury kitchens, bedrooms and furniture for around the home. The Company designs, retails, manufactures, and installs its products and engages with UK customers in its showrooms across the South of England and remotely in their home, both digitally and through home consultations.
Manufacturing and administration are carried out from a purpose-built factory and offices at Wantage, Oxfordshire.
Fair review of the business
The financial year to 30 June 2024 proved to be another challenging period for the kitchens and interiors sector, reflecting the broader pressures on high-ticket discretionary spending across the UK. Turnover for the year was £8.2 million, representing a return to pre-pandemic levels.
This decline was driven by subdued consumer confidence and softer order volumes, as households deferred major investments against a backdrop of high interest rates, persistent inflation, and continuing economic and political uncertainty. These conditions, which have impacted the wider retail and home improvement market, underline the sensitivity of our sector to fluctuations in consumer sentiment.
Gross margins were adversely affected during the period, due largely to the contractual lag between the point of sale and the timing of manufacture. A significant number of kitchens were sold at agreed prices prior to the surge in raw material and labour costs, resulting in completed projects being delivered at a lower margin than intended. This has resulted in significant pressures on profitability in FY24.
The Board acted decisively to address these pressures. Pricing was reviewed and adjusted, ensuring that FY25 contracts reflected the true cost of delivery. With input costs now showing greater stability, and with improved predictability across supply chains, gross margins are expected to return closer to historic levels. Alongside this, we have placed a sharper focus on efficient procurement, disciplined pricing, and a more selective approach to discounting. These measures, taken together, are already contributing to an improvement in performance, as evidenced by the further margin recovery and reduced loss in FY25 trading.
Our ‘digital first’ marketing strategy continued to deliver traction throughout the year, generating high-quality enquiries and reinforcing the brand’s profile as a market-leading provider of luxury kitchens, bedrooms, and interiors. Notably, multi-room and whole-home projects remained a consistent feature of our client base, sustaining higher average order values even as overall volumes declined. This trend highlights the enduring strength of the John Lewis of Hungerford brand in attracting clients seeking cohesive, design-led solutions across their homes.
John Lewis of Hungerford Limited
Strategic Report for the Year Ended 30 June 2024
In parallel, the Board has taken decisive action to align operational capacity with current levels of demand. Costs have been reduced through more efficient buying, selective headcount reductions, and the consolidation of our showroom estate to focus resources on the most productive territories. Three showrooms were identified for closure, with notice given on Bristol prior to the year end, followed by Winchester and Cambridge in the subsequent nine months. This rationalisation reflects our commitment to ensuring the business operates on a sustainable footing, while retaining strong representation in key locations.
These actions, combined with a disciplined focus on profitable transactions rather than volume-led sales, have ensured the business remains resilient in a turbulent economic environment. While FY24 was marked by volatility, the strategic decisions taken leave the Company better positioned to withstand near-term headwinds and to capture growth as market conditions improve.
Looking ahead, there are early signs of recovery as inflation and interest rates begin to moderate, although consumer confidence remains fragile. We anticipate that trading conditions will remain challenging in the near term. Nevertheless, with operations streamlined, margins stabilising, and our brand proposition strengthened through both retail and B2B channels, the Board is confident that the business is well placed to benefit from renewed demand as households regain confidence to commit to high-value projects.
The forthcoming FY25 results, due to be released shortly, are expected to demonstrate progress, with an improved margin and a reduced loss. The Board remains committed to building on these foundations to deliver long-term sustainable growth.
The Company's key financial and other performance indicators during the year were as follows:
|
Financial KPIs |
Unit |
2024 |
2023 |
|
Turnover |
£000 |
8,234 |
11,376 |
|
Net (loss)/profit before tax |
£000 |
(2,329) |
29 |
|
Gross cash |
£000 |
275 |
2,459 |
|
Gross margin |
% |
42 |
44 |
|
Net cash |
£000 |
275 |
2,446 |
The Company measure KPIs across marketing, retail and manufacturing within the business to ensure the Company is sustainable and achieving the results to maximise profitability:
Lead generation – source, quantity and reach of marketing campaigns across digital channels.
Retail – a review of value and volume of designs quoted and sold are key measures of success.
Manufacturing – throughput, efficiency and timely deliveries are measured.
John Lewis of Hungerford Limited
Strategic Report for the Year Ended 30 June 2024
Principal risks and uncertainties
Cash Flow
Major uncertainty in the economy and retail markets could lead to strains on the Company's available cashflow due to its negative working capital cycle.
Within our day-to-day operations the Company prepares detailed short and long term cashflow forecasts which are monitored on a regular basis. The Board regularly review the finance arrangements in place, to ensure adequate cash reserves are available. This enables the Company to take mitigating actions by anticipating any pressure on cash reserves.
Employee engagement, retention and capability
The Company has a dedicated team of designers, artisans in the workshop, head office staff and supporting central resources. Recruitment and retention of talented employees is crucial to our success. The Board ensures we are investing in their training and development, to be able to recognise efficiencies in our operating model.
The Company takes great pride in fostering a positive, diverse and inclusive culture. Our employee handbook together with our remuneration are reviewed annually and are designed to ensure we remain competitive in our sector, especially in view of the cost of living crisis in the UK. Training and development of our managers takes place regularly to ensure our employees continue to work in a safe environment that is free from workplace harassment or discrimination of any kind.
IT systems and infrastructure
The Company is reliant on its IT systems and operational infrastructure in order to trade efficiently. Failure of the systems could have a short-term impact on the business.
The Company has controls in place to maintain the integrity and efficiency of its systems including detailed recovery plans in the case of failure and / or cyber security issues. Advisory notes have been added to all emails to signal emails generated outside of the business, to ensure employees remain vigilant for scams and virus disruption. Cloud servers have now been impemented this year to ensure improved system security and responsiveness, in the event of any breach.
Approved and authorised by the
|
......................................... |
John Lewis of Hungerford Limited
Directors' Report for the Year Ended 30 June 2024
The Directors present their report and the financial statements for the year ended 30 June 2024.
Directors of the Company
The Directors who held office during the year were as follows:
The following Director was appointed after the year end:
Financial instruments
Objectives and policies
The Company's principal financial instruments comprise cash at bank or in hand and various basic items such as trade receivables and payables, which arise directly from its operations. It is Company policy that no trading in financial instruments shall be undertaken.
Price risk, credit risk, liquidity risk and cash flow risk
The Company's operations expose it to a variety of financial risks and the Directors have identified that the main risk to the Company is from interest rate movements.
The Company is exposed to cash flow interest risk on its floating rate deposits.
Cash and borrowing requirements are managed centrally to maximise interest income and minimise interest exposure, whilst ensuring that the Company has sufficient liquid resources to meet the operating needs of its activities.
Investments of cash surpluses, borrowings and other financial instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board. Customers are not currently traded with on credit terms.
Research and development
The Company carries out its own development activities with regard to design and production of new ranges that complement and expand the existing product lines.
John Lewis of Hungerford Limited
Directors' Report for the Year Ended 30 June 2024
Going concern
The Directors have reviewed detailed cash flow forecasts and considered a range of trading scenarios. The forecasts indicate that the Company has adequate financial resources to continue operations for at least 12 months from the date of approval of these financial statements. While the broader economic environment remains sensitive to interest rate movements and consumer confidence, the current trajectory indicates a recovery in the Company’s key markets. However, the forecasts are always sensitive to a potential reduction in consumer demand within the context of the wider geo-political environment. These factors represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. Further details are provided in note 2 of the accounts.
The Directors have identified mitigating actions, including cost reductions, marketing deferrals, and supplier payment flexibility, which are within management’s control. Accordingly, they consider the use of the going concern basis of preparation remains appropriate.
Future developments
The Company’s strategy remains firmly anchored in its commitment to a ‘digital first’ marketing approach, which has continued to strengthen the John Lewis of Hungerford brand both in the UK and abroad. Our digital channels, including social media and online PR, remain a powerful source of high-quality enquiries, reinforcing our position as a design-led leader in the luxury kitchens and interiors market. During the year, content performance has remained strong, with video and project showcases continuing to engage new audiences and inspire prospective customers. A key milestone was the launch of our new website, designed to deliver an improved customer journey for the significant volumes of visitors we attract each month.
While enquiry levels remain encouraging, the trading environment has reinforced the importance of a disciplined approach to conversion, margin management and cost efficiency. The Company has prioritised effective and profitable projects, focusing on clients seeking multi-room and higher-value solutions, and placing less emphasis on volume-driven sales.
Strategic investments have continued, albeit with a sharper focus on efficiency and resilience. We have upgraded key IT systems, moved core infrastructure onto secure cloud platforms, and invested in design software enhancements that elevate the quality of visualisations provided to customers. These improvements not only support customer confidence but also reinforce our market-leading proposition.
Alongside our retail strategy, the Company has made strong progress in developing its B2B Partnerships. We have expanded our work with interior designers, high-end residential developers and architects, both within the UK and in selected international territories. These relationships have already translated into completed projects across multiple markets, underlining the potential of this channel to provide a complementary and resilient source of demand. Interest from these professional partners has been encouraging, and the Board sees B2B Partnerships as an increasingly important contributor to future growth.
The Board has also taken action to consolidate the showroom estate, ensuring resources are focused on locations with the greatest growth potential, while continuing to invest in trade and professional relationships that extend the reach of the brand.
Looking ahead, our strategy will remain focused on combining digital strength, design excellence, B2B partnerships and operational discipline. By continuing to enhance the customer journey, investing selectively in areas that improve conversion and profitability, and broadening our presence through both retail and professional channels, we are confident in the long-term growth and sustainability of the business.
John Lewis of Hungerford Limited
Directors' Report for the Year Ended 30 June 2024
Disclosure of information to the auditors
Each Director has taken steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information. The Directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Approved and authorised by the
|
......................................... |
John Lewis of Hungerford Limited
Statement of Directors' Responsibilities
The Directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:
|
• |
select suitable accounting policies and apply them consistently; |
|
• |
make judgements and accounting estimates that are reasonable and prudent; |
|
• |
state whether applicable United Kingdom 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 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.
John Lewis of Hungerford Limited
Independent Auditor's Report to the
Members of John Lewis of Hungerford Limited
Opinion
We have audited the financial statements of John Lewis of Hungerford Limited (the 'Company') for the year ended 30 June 2024, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the Company's affairs as at 30 June 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 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.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Company incurred a net loss of £2,411,320 during the year ended 30 June 2024 and, as of that date, the Company’s current liabilities exceeded its total assets by £853,609. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
John Lewis of Hungerford Limited
Independent Auditor's Report to the
Members of John Lewis of Hungerford Limited
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
|
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities [set out on page 8], the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
John Lewis of Hungerford Limited
Independent Auditor's Report to the
Members of John Lewis of Hungerford Limited
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which our procedures are capable of detecting irregularities, including fraud are detailed below:
• Enquiry of management and those charged with governance around actual and potential litigation and claims;
• Enquiry of entity management in compliance functions to identify any instances of non-compliance with laws and regulations;
• Reviewing minutes of meetings of those charged with governance;
• Reviewing financial statement disclosures and testing to supporting document to assess compliance with applicable laws and regulations;
• Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
......................................
For and on behalf of
Oxford
OX1 3LE
John Lewis of Hungerford Limited
Independent Auditor's Report to the
Members of John Lewis of Hungerford Limited
John Lewis of Hungerford Limited
Profit and Loss Account for the Year Ended 30 June 2024
|
Note |
2024 |
2023 |
|
|
Turnover |
|
|
|
|
Cost of sales |
( |
( |
|
|
Gross profit |
|
|
|
|
Distribution costs |
( |
( |
|
|
Administrative expenses |
(5,109,322) |
(4,982,452) |
|
|
Other gains/losses |
(3,118) |
812,626 |
|
|
Operating (loss)/profit |
( |
|
|
|
Other interest receivable and similar income |
|
|
|
|
Interest payable and similar expenses |
( |
( |
|
|
Exceptional items - dilapidations and closure costs |
(77,408) |
- |
|
|
(Loss)/profit before tax |
( |
|
|
|
Taxation |
( |
- |
|
|
(Loss)/profit for the financial year |
( |
|
The above results were derived from continuing operations.
John Lewis of Hungerford Limited
Statement of Comprehensive Income for the Year Ended 30 June 2024
|
2024 |
2023 |
|
|
(Loss)/profit for the year |
( |
|
|
Total comprehensive income for the year |
( |
|
John Lewis of Hungerford Limited
(Registration number: 01317377)
Balance Sheet as at 30 June 2024
|
Note |
2024 |
2023 |
|
|
Fixed assets |
|||
|
Intangible assets |
|
|
|
|
Tangible assets |
|
|
|
|
|
|
||
|
Current assets |
|||
|
Stocks |
|
|
|
|
Debtors |
|
|
|
|
Cash at bank and in hand |
|
|
|
|
|
|
||
|
Creditors: Amounts falling due within one year |
( |
( |
|
|
Net current (liabilities)/assets |
( |
|
|
|
Total assets less current liabilities |
( |
|
|
|
Creditors: Amounts falling due after more than one year |
- |
( |
|
|
Provisions for liabilities |
( |
( |
|
|
Net (liabilities)/assets |
( |
|
|
|
Capital and reserves |
|||
|
Called up share capital |
193,945 |
193,945 |
|
|
Share premium reserve |
1,222,433 |
1,222,433 |
|
|
Revaluation reserve |
123,207 |
123,207 |
|
|
Other reserves |
1,421 |
1,421 |
|
|
Retained earnings |
(2,548,078) |
(136,758) |
|
|
Shareholders' (deficit)/funds |
(1,007,072) |
1,404,248 |
Approved and authorised by the
|
......................................... |
John Lewis of Hungerford Limited
Statement of Changes in Equity for the Year Ended 30 June 2024
|
Share capital |
Share premium |
Revaluation reserve |
Other reserves |
Retained earnings |
Total |
|
|
At 1 July 2023 |
|
|
|
|
( |
|
|
Loss for the year |
- |
- |
- |
- |
( |
( |
|
At 30 June 2024 |
|
|
|
|
( |
( |
|
Share capital |
Share premium |
Revaluation reserve |
Other reserves |
Retained earnings |
Total |
|
|
At 1 July 2022 |
|
|
|
|
( |
|
|
Profit for the year |
- |
- |
- |
- |
|
|
|
Transfers |
- |
- |
(979,136) |
- |
979,136 |
- |
|
At 30 June 2023 |
193,945 |
1,222,433 |
123,207 |
1,421 |
(136,758) |
1,404,248 |
John Lewis of Hungerford Limited
Statement of Cash Flows for the Year Ended 30 June 2024
|
Note |
2024 |
2023 |
|
|
Cash flows from operating activities |
|||
|
(Loss)/profit for the year |
( |
|
|
|
Adjustments to cash flows from non-cash items |
|||
|
Depreciation and amortisation |
|
|
|
|
Impairment loss on fixed assets |
119,590 |
- |
|
|
Loss/(profit) on disposal of tangible assets |
|
( |
|
|
Finance income |
( |
( |
|
|
Finance costs |
|
|
|
|
Income tax expense |
|
- |
|
|
( |
( |
||
|
Working capital adjustments |
|||
|
(Increase)/decrease in stocks |
( |
|
|
|
Decrease/(increase) in trade debtors |
|
( |
|
|
(Decrease)/increase in trade creditors |
( |
|
|
|
Increase in provisions |
|
- |
|
|
Decrease in deferred income |
( |
( |
|
|
Net cash flow from operating activities |
( |
( |
|
|
Cash flows from investing activities |
|||
|
Interest received |
|
|
|
|
Acquisitions of tangible assets |
( |
( |
|
|
Proceeds from sale of tangible assets |
|
|
|
|
Acquisition of intangible assets |
( |
( |
|
|
Net cash flows from investing activities |
( |
|
|
|
Cash flows from financing activities |
|||
|
Interest paid |
( |
( |
|
|
Redemption of loan |
- |
( |
|
|
Payments to finance lease creditors |
( |
( |
|
|
Net cash flows from financing activities |
( |
( |
|
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
|
Cash and cash equivalents at 1 July |
|
|
|
|
Cash and cash equivalents at 30 June |
274,722 |
2,458,547 |
|
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
General information |
The Company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
|
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
The Company's financial statements are presented in Sterling and rounded to whole pounds.
Going concern
The Company incurred a net loss of £2,411,320 during the year ended 30 June 2024 and, as of that date, the Company’s current liabilities exceeded its total assets by £853,609. These events or conditions, along with other matters as set forth below, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.
In forming their assessment, the Directors have considered the Company’s financial forecasts, cash flow projections, and expected trading performance for a period of at least 12 months from the date of approval of these financial statements. The forecasts reflect the most recent trading data and incorporate realistic assumptions regarding order intake, showroom conversion, and installation activity.
Since the FY25 year end, trading has improved significantly. Sales performance in the first quarter of FY26 is 34% ahead of the same period last year, with a strong order book and high enquiry levels across all showrooms. The Directors note that market sentiment within the home improvement sector is beginning to normalise, with customers demonstrating renewed confidence and a willingness to proceed with planned projects that were previously deferred.
While the broader economic environment remains sensitive to interest rate movements and consumer confidence, the current trajectory indicates a recovery in the Company’s key markets. The forecasts, which include reasonable downside sensitivities for sales conversion and timing of installations, show that the Company is expected to maintain adequate liquidity to meet its obligations as they fall due.
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Management has also taken a number of prudent actions to support this recovery and mitigate downside risks, including:
• Continued control of discretionary expenditure and overhead costs;
• The consolidation of the showroom estate, in order to reduce overheads and focus on the high performing territories;
• Improved customer communication and deposit management processes;
• Ongoing review of manufacturing efficiency and staffing alignment with order flow;
• Ongoing negotiation of payment plans with various creditors including HMRC.
These measures, alongside the improved trading outlook, provide a stronger platform for sustainable performance through FY26 and beyond.
However, given the sensitivity of forecasts to the timing of order intake and cash receipts, a material uncertainty remains that may cast significant doubt on the Company’s ability to continue as a going concern and the Company is reliant on meeting certain periodic revenue forecast targets and the above payment plans to enable it to be in a position to meet liabilities without needing to seek alternative sources of finance.
Notwithstanding this uncertainty, the Directors are encouraged by the positive trading momentum, strong showroom enquiry levels, and actions taken to strengthen operational control. On this basis, they consider it appropriate to prepare the financial statements on a going concern basis.
Judgements and key sources of estimation uncertainty
Slow moving stock provision: Inventory is recognised at the lower of cost and net realisable value (NRV). The provision for slow moving stock is based upon an analysis of stock items which have had slow or minimal turnover during the prior 12 months and an estimate of their likelihood of being used in the future. In reference to this, a slow moving stock provision is calculated. The carrying amount is £17,282 (2023 -£17,282).
Dilapidations and closures provision: The Company makes such provision for dilapidations relating to its leasehold showroom estate as it considers necessary. From review of exiting previous showrooms and industry averages, Management have estimated that a provision of £5 per square foot will give a reasonable estimate of any future costs of exiting the showroom estate.
Where a decision to close a showroom or other area of business activity has been made prior to the year end, Management will review the costs of closure post year end and add such provision as it considers necessary to account for all cost of closure. This provision is based on the specific needs of the site and general experience of previous closures. The carrying amount is £133,463 (2023 -£56,055).
Warranty provision: The Company makes provision for potential future warranty claims on kitchens & bedrooms sold. Management estimates this initially based on an analysis of expenditure from the previous 12 month period. Management will then use judgement from historical claims to estimate whether to increase or release the provision depending on expectations of the coming 12 month period. The carrying amount is £20,000 (2023 -£20,000).
Useful economic lives (all non-current assets): Estimation of the useful economic lives will have a material impact on the depreciation charge to the income statement during a given period which the Company expects to receive economic benefits from the respective assets and applies them on a consistent basis. The carrying amount is £1,020,632 (2023 -£1,006,932).
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Revenue recognition
The Company's revenue arises principally from the sale of products and installation services to consumers from the Company's showrooms. The revenue is predominantly derived in the UK.
Contracts with customers are for a fully managed project which includes the sale of products, the related installation and any other services and includes one performance obligation. Payment is made by the customer for the project via a 50% deposit on completion of the design and with the balance paid prior to shipping the goods, or being stored within the storage facility of the Company. The contract liabilities arising from these cash receipts are recorded in the balance sheet as customer deposits within deferred income.
The Company has concluded that revenue from the sale of projects should be recognised at a point in time when control of the goods are transferred to the consumer, which is when it is made available for installation or stored. The board view installation costs as part and parcel of the contract for goods and services, and incidental in nature. At this point the Company also has certainty over the value of the sale and is certain of the payment terms as any debt due from the customer has been settled or committed by way of a Credit Agreement through the Finance Provider - Novuna Consumer Finance.
The customer has a 10 year warranty which covers the manufactured and installed cabinetry on completion of the order.
Revenue is measured at the invoice price less any discounts offered.
Tax
The tax expense for the period comprises deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used.
Tangible assets
Tangible assets are stated at cost less any subsequent accumulated depreciation and subsequent accumulated impairment losses, excluding freehold land and buildings which are measured under the revaluation model.
Cost includes purchase price and any directly attributable costs. The costs of acquiring showroom leases are included in the cost of showroom display units and shop fittings.
Depreciation
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
|
Asset class |
Depreciation method and rate |
|
Freehold property |
2% straight-line |
|
Plant & machinery and loose tools |
10% straight-line |
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Office fixtures, fittings & IT equipment |
10% and 33% straight-line |
|
Showroom display & shop fittings |
33% reducing balance and 10% straight-line; 20% straight-line on new showroom displays |
No depreciation is provided in respect of freehold land.
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.
Capitalised development costs include related costs for employees who are directly related to the project.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Trademarks |
10 years straight-line |
|
Development costs |
5-10 years straight-line |
|
Website |
10 years straight-line |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at cost less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are measured at the transaction price.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Provisions
Slow moving stock provision
Inventory is recognised at the lower of cost and net realisable value (NRV). The provision for slow moving stock is based upon an analysis of stock items which have had slow or minimal turnover during the prior 12 months and an estimate of their likelihood of being used in the future. In reference to this, a slow moving stock provision is calculated.
Dilapidations and closures provision
The Company makes such provision for dilapidations relating to its leasehold showroom estate as it considers necessary. From review of exiting previous showrooms and industry averages, Management have estimated that a provision of £5 per square foot will give a reasonable estimate of any future costs of exiting the showroom estate.
Where a decision to close a showroom or other area of business activity has been made prior to the year end, Management will review the costs of closure post year end and add such provision as it considers necessary to account for all cost of closure. This provision is based on the specific needs of the site and general experience of previous closures.
Warranties provision
The Company makes provision for potential future warranty claims on kitchens & bedrooms sold. Management estimates this initially based on an analysis of expenditure from the previous 12 month period. Management will then use judgement from historical claims to estimate whether to increase or release the provision depending on expectations of the coming 12 month period.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the Company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
|
Turnover |
The analysis of the Company's Turnover for the year from continuing operations is as follows:
|
2024 |
2023 |
|
|
Sale of goods |
|
|
|
Other gains and losses |
The analysis of the Company's other gains and losses for the year is as follows:
|
2024 |
2023 |
|
|
(Loss)/gain on disposal of tangible assets |
( |
|
|
Operating (loss)/profit |
Arrived at after charging/(crediting)
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
|
|
|
Impairment loss |
|
- |
|
Operating lease expense - property |
|
|
|
Loss/(profit) on disposal of property, plant and equipment |
|
( |
|
Other interest receivable and similar income |
|
2024 |
2023 |
|
|
Interest income on bank deposits |
|
|
|
Interest payable and similar expenses |
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
2024 |
2023 |
|
|
Interest on bank overdrafts and borrowings |
|
- |
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
Interest expense on other finance liabilities |
- |
|
|
|
|
|
Staff costs |
The aggregate payroll costs (including Directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the Company (including Directors) during the year, analysed by category was as follows:
|
2024 |
2023 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
Sales, marketing and distribution |
|
|
|
|
|
|
Directors' remuneration |
The Directors' remuneration for the year was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
169,193 |
194,037 |
During the year the number of Directors who were receiving benefits and share incentives was as follows:
|
2024 |
2023 |
|
|
Accruing benefits under money purchase pension scheme |
|
|
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of the financial statements |
|
|
|
Other fees to auditors |
||
|
Other non-audit services |
|
|
|
Taxation |
Tax charged/(credited) in the profit and loss account
|
2024 |
2023 |
|
|
Current taxation |
||
|
UK corporation tax |
- |
- |
|
Total current income tax |
- |
- |
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
- |
- |
|
Arising from write-down or reversal of write-down of deferred tax asset |
|
- |
|
Total deferred taxation |
|
- |
|
Tax expense in the income statement |
|
- |
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024 |
2023 |
|
|
(Loss)/profit before tax |
( |
|
|
Corporation tax at standard rate |
( |
|
|
Tax increase from effect of capital allowances and depreciation |
|
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
( |
|
|
Effect of revenues exempt from taxation |
|
( |
|
Tax increase/(decrease) from other short-term timing differences |
|
( |
|
Tax increase from effect of unrelieved tax losses carried forward |
|
|
|
Effect of tax losses |
( |
( |
|
Deferred tax expense from unrecognised tax loss or credit |
|
- |
|
Total tax charge |
|
- |
Deferred tax
Deferred tax assets and liabilities
|
2023 |
Asset |
Liability |
|
Deferred tax recognised on profit/loss |
|
- |
|
|
- |
The Directors recognise the estimation uncertainties over the recognition of future taxable losses and have therefore not recognised any deferred tax assets at 30th June 2024.
There are £4,898,986 of unused tax losses (2023 - £2,162,523) for which no deferred tax asset is recognised in the balance sheet.
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Intangible assets |
|
Website |
Trademarks |
Development costs |
Total |
|
|
Cost or valuation |
||||
|
At 1 July 2023 |
|
|
|
|
|
Additions acquired separately |
|
- |
- |
|
|
At 30 June 2024 |
|
|
|
|
|
Amortisation and impairment |
||||
|
At 1 July 2023 |
|
|
|
|
|
Amortisation charge |
|
|
|
|
|
Impairment |
|
- |
- |
|
|
At 30 June 2024 |
|
|
|
|
|
Carrying amount |
||||
|
At 30 June 2024 |
|
|
|
|
|
At 30 June 2023 |
|
|
|
|
Amortisation of intangible assets is included within administrative expenses.
Individually material intangible assets
|
|
Impairment
Website
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Tangible assets |
|
Freehold land and buildings |
Showroom display & shop fittings |
Plant & machinery and loose tools |
Office fixtures, fittings & IT equipment |
Total |
|
|
Cost or valuation |
|||||
|
At 1 July 2023 |
|
|
|
|
|
|
Additions |
- |
|
|
|
|
|
Disposals |
- |
- |
( |
- |
( |
|
At 30 June 2024 |
|
|
|
|
|
|
Depreciation |
|||||
|
At 1 July 2023 |
|
|
|
|
|
|
Charge for the year |
|
|
|
|
|
|
Eliminated on disposal |
- |
- |
( |
- |
( |
|
At 30 June 2024 |
|
|
|
|
|
|
Carrying amount |
|||||
|
At 30 June 2024 |
|
|
|
|
|
|
At 30 June 2023 |
|
|
|
|
|
Revaluation
The fair value of the Company's freehold land and buildings was revalued on
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Stocks |
|
2024 |
2023 |
|
|
Raw materials and consumables |
|
|
|
Work in progress |
|
|
|
|
|
|
Debtors |
|
Note |
2024 |
2023 |
|
|
Trade debtors |
|
|
|
|
Other debtors |
|
|
|
|
Prepayments |
|
|
|
|
Accrued income |
- |
|
|
|
Deferred tax assets |
- |
|
|
|
|
|
|
Cash and cash equivalents |
|
2024 |
2023 |
|
|
Cash at bank |
|
|
|
Creditors |
|
Note |
2024 |
2023 |
|
|
Due within one year |
|||
|
Trade creditors |
|
|
|
|
Social security and other taxes |
|
|
|
|
Other payables |
|
|
|
|
Accruals |
|
|
|
|
Deferred income |
|
|
|
|
|
|
||
|
Due after one year |
|||
|
Loans and borrowings |
- |
|
|
Provisions for liabilities |
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Warranties |
Dilapidations and closures |
Total |
|
|
At 1 July 2023 |
|
|
|
|
Increase (decrease) in existing provisions |
- |
|
|
|
At 30 June 2024 |
|
|
|
|
|
|||
Warranties
The Company makes provision for potential future warranty claims on kitchens & bedrooms sold. Management estimates this initially based on an analysis of expenditure from the previous 12 month period. Management will then use judgement from historical claims to estimate whether to increase or release the provision depending on expectations of the coming 12 month period.
Dilapidations and closures
The Company makes such provision for dilapidations relating to its leasehold showroom estate as it considers necessary. From review of exiting previous showrooms and industry averages, Management have estimated that a provision of £5 per square foot will give a reasonable estimate of any future costs of exiting the showroom estate.
Where a decision to close a showroom or other area of business activity has been made prior to the year end, Management will review the costs of closure post year end and add such provision as it considers necessary to account for all cost of closure. This provision is based on the specific needs of the site and general experience of previous closures.
|
Pension and other schemes |
Defined contribution pension scheme
The Company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the Company to the scheme and amounted to £
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
Ordinary shares of 0.1p each |
193,945,519 |
193,946 |
193,945,519 |
193,946 |
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
|
Loans and borrowings |
Non-current loans and borrowings
|
2024 |
2023 |
|
|
Hire purchase contracts |
- |
|
|
Obligations under leases and hire purchase contracts |
Finance leases
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Later than one year and not later than five years |
- |
|
Operating leases
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Analysis of changes in net debt |
|
At 1 July 2023 |
Financing cash flows |
At 30 June 2024 |
|
|
Cash and cash equivalents |
|||
|
Cash |
2,458,547 |
(2,183,825) |
274,722 |
|
Borrowings |
|||
|
Lease liabilities |
(12,740) |
12,740 |
- |
|
|
( |
|
|
|
|
|||
|
Related party transactions |
The transactions with Directors of the Company are disclosed in note 9. Transactions with key management personnel (comprising the Directors and key members of management) are disclosed below:
John Lewis of Hungerford Limited
Notes to the Financial Statements for the Year Ended 30 June 2024
Key management compensation
|
2024 |
2023 |
|
|
Salaries and other short term employee benefits |
|
|