Allensmore Nurseries Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02202142 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 30 September 2021

for

Allensmore Nurseries Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Profit and Loss Account

9

Balance Sheet

10

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

Directors:

B J Taylor

Mrs R L Taylor

M A Taylor

Secretary:

Mrs R L Taylor

Registered office:

Tram Inn

Allensmore

Herefordshire

HR2 9AN

Registered number:

02202142 (England and Wales)

Senior statutory auditor:

Mr Russell Spencer

Auditors:

Acre Accountancy Limited

Unit 2 Foley Works

Foley Industrial Estate

Hereford

Herefordshire

HR1 2SF

The directors present their strategic report for the year ended 30 September 2021.

Coronavirus

The directors have continued to review the effects of Coronavirus on their financial accounts and the business.

The directors remain very appreciative that they operate in horticulture which appears to have suffered less and has recovered stronger than many sectors of the economy.

The directors continue to be very grateful for the much needed government support initiatives:

- We were successful in securing £2.5m CBILS loan from HSBC during May 2020.

- We were able to defer payment of £161k of VAT due early April 2020 until March 2021 - fully repaid in March 2021.

- We were able to recover £135k of Furlough cost to the end of September 2020 and a further £25k in the year to September 2021.

The directors remain very grateful to all staff for their continued efforts in such challenging times. Since early 2020 the company has invested considerable in an additional effort to ensure that all staff are able to work safely, and to prevent and minimise any incidences of Coronavirus on our sites.

Review of business

The directors were pleased to achieve a record annual turnover of £22.8m with a strong performance across all customers and market sectors. Sales demand continued to grow due to a strong offering of own grown plants and continuing to source traded stocks.

Labour and other costs were significantly higher, but due to the large jump in sales demand economies of scale were achieved. As a result the business delivered record trading profits for the second year running.

On the strength of a strong trading performance and solid cash flow, the company has continued to invest in developing our Madley growing site to service the increasing sales demand.

The directors are therefore pleased to present such a strong trading account, balance sheet and cash flow for the year.

However, whilst the directors remain very positive regarding their future growth and development plans for the business, they do not anticipate that levels of profitability in the current year will continue. The business is experiencing significant increases in most operating costs. Staff costs are accelerating as we seek to recruit and retain personnel in a very competitive marketplace. The cost of utilities also is expected to rise further moving into 2022. The directors remain concerned about the ongoing presence of Coronavirus and the effects of Brexit on the international supply chain issues.

The business uses the following Key Performance Indicators to measure performance:

- Detailed monthly and year to date management accounts monitoring trading, balance sheet and cash flow against budgets and prior years

- Monthly monitoring of sales margins by product and customer

- Wages, distribution costs and overheads compared to budget and as percentage of sales

- Debtors are continually monitored and debtor days measured

- We measure credit notes as a percentage of sales

- We measure waste as a percentage of sales and stock values, and compare with prior years.

Principal risks and uncertainties

The directors aim to minimise risk and uncertainty through good business and financial management. Key actions include:

- Fixing buying and selling prices in advance

- Continually reviewing and proactively managing our foreign currency risks. We agree exchange rates assumptions with customers in advance, and forward buy a significant proportion of our requirements

- We insure all our sales through a bad debt protection policy where available

- We agree payment terms with customers and suppliers

- We employ sensible credit control procedures to ensure good cash flow and avoid bad debts

- We prudently insure assets and appropriate business risks

- We endeavour to recruit, retain, train and develop staff to broaden and strengthen our team

- We actively engage in research and development to expand our product range and continually improve the quality of the plants on offer to existing and new customers.

On behalf of the board:

Mrs R L Taylor - Secretary

7 June 2022

The directors present their report with the financial statements of the company for the year ended 30 September 2021.

Principal activity

The principal activity of the company in the year under review was that of wholesale growers and distributors of bedding, hardy nursery, added value and house plants. The directors do not plan to change these activities in the foreseeable future.

Dividends

A dividend of 155.25p per £1 ordinary share (2020 - 136.32p) was proposed and paid.

Research and development

The company continues to develop new strains of plants and new methods of growing them. In addition several projects were undertaken during 2021 to develop bespoke production, irrigation, electrical and computer systems.

Future developments

The company continues to focus on gaining efficiencies to capitalise on our investments, is actively engaged in research and development, and will continue to invest in improved production facilities.

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Directors

The directors shown below have held office during the whole of the period from 1 October 2020 to the date of this report.

B J Taylor

Mrs R L Taylor

M A Taylor

Mrs J E Davies

Other changes in directors holding office are as follows:

Mrs J E Davies ceased to be a director after 30 September 2021 but prior to the date of this report.

Statement of directors' responsibilities

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 then apply them consistently;

-	make judgements 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 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.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors

The auditors, Acre Accountancy Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

Mrs R L Taylor - Secretary

7 June 2022

Opinion

We have audited the financial statements of Allensmore Nurseries Limited (the 'company') for the year ended 30 September 2021 which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 September 2021 and of its profit 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 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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Report of the Directors.

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 four, 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 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.

Auditors' 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 a Report of the Auditors 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:

We enquired with management about the legal framework that the company operates in. We also enquired about the risk of fraud and whether they were aware of any instances of fraud.

We communicated the outcome of this risk assessment with the audit team and planned our audit work accordingly. Our work in these areas is limited to analytical procedures and inspection of relevant documentation. Where a breach of operational regulations is not disclosed to us, or it is not evident from documentation that we receive during the audit, an audit will not detect that breach.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Mr Russell Spencer (Senior Statutory Auditor)

for and on behalf of Acre Accountancy Limited

Unit 2 Foley Works

Foley Industrial Estate

Hereford

Herefordshire

HR1 2SF

7 June 2022

TURNOVER

22,762,781

14,208,143

Cost of sales

(13,394,497

)

(8,919,928

)

GROSS PROFIT

9,368,284

5,288,215

Distribution costs

(2,324,012

)

(1,608,510

)

General administration costs

(3,091,885

)

(2,512,879

)

3,952,387

1,166,826

Other operating income

251,172

246,334

OPERATING PROFIT

5

4,203,559

1,413,160

Interest payable and similar expenses

6

(122,237

)

(71,808

)

PROFIT BEFORE TAXATION

4,081,322

1,341,352

Tax on profit

7

(889,411

)

(209,350

)

PROFIT FOR THE FINANCIAL YEAR

3,191,911

1,132,002

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,191,911

1,132,002

FIXED ASSETS

Tangible assets

10

4,050,150

3,826,656

CURRENT ASSETS

Stocks

11

2,002,527

1,725,047

Debtors

12

2,168,758

1,302,628

Cash at bank

6,524,102

3,928,182

10,695,387

6,955,857

CREDITORS

Amounts falling due within one year

13

(4,097,666

)

(2,952,740

)

NET CURRENT ASSETS

6,597,721

4,003,117

TOTAL ASSETS LESS CURRENT LIABILITIES

10,647,871

7,829,773

CREDITORS

Amounts falling due after more than one year

14

(2,381,191

)

(3,018,474

)

PROVISIONS FOR LIABILITIES

18

(711,439

)

(443,725

)

ACCRUALS AND DEFERRED INCOME

19

(201,966

)

(128,583

)

NET ASSETS

7,353,275

4,238,991

CAPITAL AND RESERVES

Called up share capital

20

50,000

50,000

Retained earnings

21

7,303,275

4,188,991

SHAREHOLDERS' FUNDS

7,353,275

4,238,991

The financial statements were approved by the Board of Directors and authorised for issue on 7 June 2022 and were signed on its behalf by:

B J Taylor - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2019

50,000

3,125,149

3,175,149

Changes in equity

Dividends

-

(68,160

)

(68,160

)

Total comprehensive income

-

1,132,002

1,132,002

Balance at 30 September 2020

50,000

4,188,991

4,238,991

Changes in equity

Dividends

-

(77,627

)

(77,627

)

Total comprehensive income

-

3,191,911

3,191,911

Balance at 30 September 2021

50,000

7,303,275

7,353,275

Cash flows from operating activities

Cash generated from operations

1

4,149,407

1,518,261

Interest paid

(121,336

)

(69,771

)

Interest element of finance lease payments paid

(901

)

(2,037

)

Tax paid

(29,943

)

-

Net cash from operating activities

3,997,227

1,446,453

Cash flows from investing activities

Purchase of tangible fixed assets

(997,611

)

(1,284,194

)

Sale of tangible fixed assets

19,891

51,679

Net cash from investing activities

(977,720

)

(1,232,515

)

Cash flows from financing activities

New loans in year

-

2,500,000

Loan repayments in year

(325,631

)

(159,246

)

Capital repayments in year

(16,862

)

(28,189

)

Amount introduced by directors

-

12,747

Amount withdrawn by directors

(3,467

)

-

Equity dividends paid

(77,627

)

(68,160

)

Net cash from financing activities

(423,587

)

2,257,152

Increase in cash and cash equivalents

2,595,920

2,471,090

Cash and cash equivalents at beginning of year

2

3,928,182

1,457,092

Cash and cash equivalents at end of year

2

6,524,102

3,928,182

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

Profit before taxation

4,081,322

1,341,352

Depreciation charges

754,492

535,327

Profit on disposal of fixed assets

(266

)

(46,068

)

Finance costs

122,237

71,808

4,957,785

1,902,419

Increase in stocks

(277,480

)

(525,423

)

Increase in trade and other debtors

(866,130

)

(231,104

)

Increase in trade and other creditors

335,232

372,369

Cash generated from operations

4,149,407

1,518,261

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30 September 2021

30.9.21

1.10.20

£

£

Cash and cash equivalents

6,524,102

3,928,182

Year ended 30 September 2020

30.9.20

1.10.19

£

£

Cash and cash equivalents

3,928,182

1,457,092

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.10.20

Cash flow

At 30.9.21

£

£

£

Net cash

Cash at bank

3,928,182

2,595,920

6,524,102

3,928,182

2,595,920

6,524,102

Debt

Finance leases

(24,087

)

16,862

(7,225

)

Debts falling due within 1 year

(370,018

)

(304,377

)

(674,395

)

Debts falling due after 1 year

(3,011,199

)

630,008

(2,381,191

)

(3,405,304

)

342,493

(3,062,811

)

Total

522,878

2,938,413

3,461,291

1.	STATUTORY INFORMATION

Allensmore Nurseries Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents net invoiced sales of goods, excluding value added tax, except in respect of service contracts where turnover is recognised when the company obtains the right to consideration.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold

-

4% to 20% on cost

Plant and machinery

-

10% to 33 1/3% on cost

Fixtures and fittings

-

15% to 33 1/3% on cost

Motor vehicles

-

10% to 50% on cost

Government grants

Government grants are not recognised until there is reasonable assurance that the conditions attached to them will be met and that the grant will be received. Grants are recognised based on the accrual model, and those in relation to tangible fixed assets are credited to the profit and loss account over the useful lives of the related assets.

The COVID-19 pandemic prompted a number of revenue grants that are intended to subsidise expenditure and losses incurred. These have been recognised as other operating income.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

Financial instruments are classified and accounted for according to the substance of the contractual arrangement. They are classified as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Where the company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a finance lease. The asset is recorded in the balance sheet as a tangible fixed asset and is depreciated in accordance with the depreciation policy for that class of asset. Future instalments under such leases, net of finance charges, are included within creditors.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

4.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

5,144,793

3,813,950

Social security costs

288,336

260,541

Other pension costs

59,257

112,241

5,492,386

4,186,732

The average number of employees during the year was as follows:

2021

2020

Permanent production staff

41

41

Administrative staff

23

23

Other staff

60

61

124

125

Wages and salary costs include agency labour costs whereas employee numbers represent direct employees only.

2021

2020

£

£

Directors' remuneration

203,449

167,644

Directors' pension contributions to money purchase schemes

14,455

67,438

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

4

4

Information regarding the highest paid director for the year ended 30 September 2021 is as follows:

2021

£

Emoluments etc

80,504

Pension contributions to money purchase schemes

7,227

The directors are considered to be the only Key Management Personnel.

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2021

2020

£

£

Hire of plant and machinery

229,917

211,817

Other operating leases

341,033

304,096

Depreciation - owned assets

754,492

535,327

Profit on disposal of fixed assets

(266

)

(46,068

)

Auditors' remuneration

8,400

8,400

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Bank interest

53,176

35,681

CBILS notional interest

68,160

34,090

Hire purchase

901

2,037

122,237

71,808

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

621,697

29,943

Deferred tax

267,714

179,407

Tax on profit

889,411

209,350

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

£

£

Profit before tax

4,081,322

1,341,352

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

775,451

254,857

Effects of:

Expenses not deductible for tax purposes

955

-

Depreciation in excess of capital allowances

2,789

8,280

Enhanced taxation deduction arising from R&D expenditure

(60,529

)

(53,787

)

Deferred tax rate adjustment

170,745

-

Total tax charge

889,411

209,350

8.

DIVIDENDS

2021

2020

£

£

Ordinary shares of £1 each

Final

77,627

68,160

9.	PRIOR YEAR ADJUSTMENT

Following a reclassification of employees the directors considered that it was necessary reclassify various employee costs from administration to cost of sales. To ensure comparability, the comparative figures have been adjusted by £1,344,878 (increasing cost of sales and reducing administration costs). The profit for the year has not been amended.