LAING_THE_JEWELLER_(GLASG - Accounts

The directors present their strategic report together with the audited financial statements for the year ended 31 May 2022.

Laings is one of the oldest family-owned luxury watch and jewellery retailers in the UK, with presence in four principal cities: Glasgow, Edinburgh, Cardiff and Southampton.

In the year under review, turnover was £60.0m (2021 - £36.9m) representing a 62.2% increase. Gross margin has increased to 34.0% (2021 – 32.8%). Overheads have increased from £9.9m to £14.6m. Other operating income in the year fell from £1.0m to £0.01m. Profit before tax is £5.4m (2021 - £2.8m).

Our 2020/21 results were significantly impacted by the COVID-19 pandemic, which resulted in restrictions being imposed across the UK, and globally. In the year 2021/22, whilst the COVID-19 pandemic continued, its severity was less, as the UK, and the world, adapted to living with the virus. There were no mandatory lockdowns within the UK in the year to 31 May 2022, and this resulted in a strong recovery in sales and customer demand for luxury jewellery and watches. Many UK consumers were still unable to travel abroad freely, and therefore UK retail spending benefited, particularly across the summer months of 2021. In autumn 2021, we opened our new expanded Cardiff store, with key brand partners, and this has delivered strong sales performance and customer engagement from the outset. We also opened our first mono-brand showroom in Cardiff in April 2022, whose performance continues to exceed expectations. We closed our pre-owned watch and jewellery boutique in Glasgow in April 2022 as we started to prepare for our future move and expansion in Glasgow to the iconic Rowan House building on Buchanan Street. Our online presence has continued to build following growth during the periods of national lockdown in 2020/21, and this continues to be an area of focus and investment for Laings, as we continue to develop our omni-channel retail offering.

COVID-19

Whilst the severity of the threat from COVID-19 has dissipated as science has evolved to develop effective vaccines, and society has adapted to living with the virus, the board are acutely aware of the need to be prepared for any future pandemic event which could bring similar levels of disruption to the business. Our crisis management plans, which were so effective during the COVID-19 pandemic, form the basis of our future planning for any similar events. The board ensure that they remain aware of ongoing developments nationally and globally, with adjustments and improvement made to our crisis management plans as appropriate.

Key suppliers and supply chain

The manufacture and supply of key luxury watch brands is highly concentrated amongst a small number of brand partners, with the production of luxury watches impacted by the availability of highly skilled watchmakers and other artisans involved in the creation of a timepiece. Each brand has sole control over the volume of watches produced and thereafter distributed amongst the retail network through direct brand-operated showrooms, partner-operated showrooms and online. Whilst the Company has no guaranteed volume of supply of luxury watches under its distribution contracts with its key brand partners, the Company carefully manages its ongoing contractual obligations to ensure continued strong partnerships with all of its brands. The Company fosters strong relationships with its brand partners, who have been vital partners in the Company’s success over many years, by ensuring ongoing communication throughout the year and collaboration on upcoming projects. All colleagues involved with our brands undertake all required brand training to ensure that they best represent our partner brands and continue to deliver the level of exceptional customer service that Laings and the brands are renowned for. The Company continues to invest in its showrooms to ensure that the client experience offered is aligned with its brand requirements.

Seasonality

A significant proportion of the company’s sales are generated in the Christmas trading period, and any disruption to trade during this time caused by extreme weather conditions could have an adverse impact on the company performance. The directors have put in place appropriate plans to mitigate the risk of any such disruption to a minimum, ensuring that trading continues as normal wherever possible. The experience gained through trading through the COVID-19 pandemic has enabled us to adopt a more agile approach to selling, when barriers to direct store access are present.

Data protection and cyber security

The importance of protecting sensitive data within the Company is at the forefront of the board’s focus as we look to build upon our existing measures and systems, adapting to the changing threats within the cyber environment. We work closely with third party partners in this specialist area.

Economic and political stability

Whilst not in the control of the board, the overall economic and political environment within the UK has an influence on several factors which could impact on the Company’s performance and ability to carry out its strategic growth plans. An increase in economic instability can lead to, amongst other things, reduced consumer spending power impacting on consumer demand for luxury watch and jewellery products; higher interest rates which increase the cost of debt service for the Company and rising costs reducing profitability and squeezing liquidity. The board regularly monitor financial and political trends, reforecasting based on any foreseen impact on consumer demand, and factor that into the programme of ongoing projects which the Company has. Core to this is engaging with our customers not just for a single purchase, but bringing them on a journey with Laings as their jeweller of choice for their lifetime. Building strong relationships with our customer base is key to managing any change in the economic and political environment.

Financial risk management

The company addresses risks at periodic board meetings, including an evaluation of the company’s risk appetite and alignment to the company strategy. The principal risks and uncertainties are broadly grouped as either financial risk below or wider economic risk noted above.

Liquidity and cashflow risk

Liquidity and cashflow risk arises from the company’s management of daily working capital, in conjunction with monthly finance charge and principal repayments on the company’s debt facilities. The company carries out daily cashflow forecasting alongside annual budget setting and cashflow forecasting to ensure that liquidity risk is minimised.

Credit risk

The company’s exposure to credit risk is minimal as the majority of sales to customers are not on a credit basis. Credit sales are only offered to pre-approved customers, with whom the company has a close relationship. Credit control limits for such customers are monitored regularly.

Foreign exchange risk

The company’s exposure to foreign exchange risk is indirect as the majority of purchases are made from UK companies. Where exchange rate fluctuations influence the sterling cost price of purchases, appropriate adjustments are made to selling prices to minimise any adverse impact on the company’s results.

Price risk

Price risk is mitigated where selling prices are set by suppliers based on fluctuations in cost price. Where the company has influence over selling prices, we assess the underlying cost base and adjust prices accordingly.

The main key performance indicators of the company are:

•    Turnover growth – turnover has increased by 62.2%.

•    Gross margin – gross margin is 34.0% v 32.8% which is in line with the directors expectations and target margin for the year under review.

These KPIs are reviewed on a weekly basis against prior year and budget for each location and on a company wide basis.

Over the next 12 to 24 months the company will continue to deliver on its ambitious investment plans across all four cities in which we are based. The first stage of this was the successful expansion of our Cardiff showroom and opening of our first mono-brand showroom. Our next projects are a new showroom in Southampton, tripling the retail offering we have in this key location, followed by our relocation to Glasgow’s iconic retail destination Buchanan Street. We will be revamping the historic Rowan House building to become a destination luxury retail space, coupled with a state-of-the-art watch workshop and head office. The directors continue to evaluate other exciting opportunities with our brand partners and across our existing cities, which will support our strategic growth plans for the future.

This is a very exciting time for Laings and demonstrates our commitment to bringing customers a luxury retail experience, where they can immerse themselves in the history of our brand and our brand partners. We could not have achieved our successes to date, nor plan for our future success, without the skill, experience and dedication of our colleagues, who are at the forefront of our plans to grow the business. We have invested in our in-house training team in the current year, working closely with our brand partners, to deliver industry leading training opportunities and career development. This will continue to be a key focus area for the business in the coming years, with a strong emphasis on supporting and developing craftmanship in watchmaking and goldsmithing.

Section 172 (1) of the Companies Act 2006 highlights that the directors of a company have a duty to promote that company’s success, for the benefit of its members as a whole, and that in order to do so, the directors must consider six key factors being:

1. The likely consequences of any decision in the long-term;

2. The interests of the company’s employees;

3. The need to foster the company’s business relationships with suppliers, customers and others;

4. The impact of the company’s operations on the community and the environment;

5. The desirability of the company maintaining a reputation for high standards of business conduct; and

6. The need to act fairly as between members of the company.

All directors are aware of their statutory duties and the requirements to regard in all material respects the factors set out above.

The key stakeholders of the Company are principally the Company’s shareholders, its employees, its suppliers and its customers.

The board of directors is made up of ten directors, the majority of which are involved in the day to day running of the Company, along with heads of department. The long-term strategy of the Company is set at board level and reviewed periodically at board meetings to determine progress, receive feedback and evaluate any proposed changes. Each director provides a written board paper in advance of each meeting, allowing fellow directors the opportunity to discuss further at board meetings. Board meetings consider, amongst other things, the Company’s financing position, product offering, investment plans, expansion opportunities, and marketing and digital strategy.

Operational directors meet weekly with heads of department discussing operational, financial, procurement, marketing, HR, retail and e-commerce matters. Employee, supplier and customer matters are considered at these meetings, ensuring that directors are fully aware of these stakeholders’ positions on a regular basis.

Operational directors along with heads of department meet weekly with senior retail and services colleagues to hear about store and department performance v budget, operational and employee matters. These meetings allow regular open and honest communication between senior retail and services colleagues and directors.

Through the suite of communication channels which the board participates in, the directors are able to furnish themselves with the necessary information to ensure that their duties as directors are satisfied.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 May 2022.

The principal activity of the company continued to be that of the retailing of luxury jewellery and watches, both in stores and online, alongside provision of service and design craftsmanship for jewellery and watches.

Business review

A review of the business and its principal risks and uncertainties is set out in the strategic report on page 1 of these financial statements. Financial risk management is also discussed in the strategic report.

The profit for the year, after taxation, amounted to £4,241,580 (2021: £2,058,653).

Details of dividends paid can be found at note 9. An final dividend of £2,684,884 was paid to the company’s intermediate parent company. An interim dividend of £350,386 was paid to the company’s ultimate shareholders and owners.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Streamlined Energy and Carbon Reporting (SECR) is presented in accordance with The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 which introduced energy and carbon reporting requirements for large unquoted companies in the UK. The Company meets the criteria of a large unquoted company. The energy and emissions data presented here include all UK operations of Laing the Jeweller (Glasgow) Limited.

The total electricity kWh consumption across all properties is 438,207, with gas usage of 134,586. This equates to 119,410 kg CO2e per unit under scope 1 to 3 of the UK Government’s GHG Conversion Factors for Company Reporting.

Vehicle usage consumes 34,159 kWh which equates to 7,860 kg CO2e per unit under scope 1 to 3 of the UK Government’s GHG Conversion Factors for Company Reporting.

Air travel and hotel accommodation uses energy equivalent to 41,667 kg CO2e per journey.

The Company is aware of its obligations as an energy user and emitter of CO2 greenhouse gases to reduce consumption wherever possible and reduce our impact on the environment. Our ongoing programme of investment across our locations focuses, amongst other things, on ensuring that any equipment installed is the most energy efficient possible. Other changes during the year have included new printer set-ups ensuring that paper usage is minimised along with progression towards paperless invoicing processes. The Company traded in its diesel vehicle part-way through the year for an electric vehicle, and the other long-term lease vehicles which the company uses are also fully electric.

The methodology used by the group to calculate UK energy CO2 emission was taken from the UK Government GHG Conversion Factors for Company Reporting advisory.

The intensity ratio currently in use by the Company is CO2 emissions in relation to turnover equating to 2.81kg of CO2 per £1,000 of turnover.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors and senior management team meet on a regular basis to discuss the company’s performance, review the annual budget and reforecast, when required. Investment projects are also subject to regular review, with any changes factored into updated projections and subsequently stress tested.

In assessing the going concern position of the company, the directors have reviewed the company’s budget covering a period of at least the next 12 months, alongside the cashflow projections for the same period which allow for the company’s extensive and progressive capital investment programme. Projections have been stress tested and are subject to ongoing review and updates to reflect the performance of the company post year end, and any changes to the working capital base.

Based on the above, the directors are confident that the actions and strategies in place, results in the company being able to mitigate business threats as they arise. As a result, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and, therefore, adopt the going concern basis of accounting in preparing the financial statements.

The directors are responsible 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 then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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.

We have audited the financial statements of Laing the Jeweller (Glasgow) Limited (the 'company') for the year ended 31 May 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 May 2022 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the 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. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, 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.

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.

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and 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 indicators of potential 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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Laing the Jeweller (Glasgow) Limited is a private company limited by shares incorporated in Scotland. The registered office is Rowan House, 70 Buchanan Street, Glasgow, United Kingdom, G1 3JE.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;

• Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

Laing the Jeweller (Glasgow) Limited is a wholly owned subsidiary of Laings UK Holding Limited and the results of Laing the Jeweller (Glasgow) Limited are included in the consolidated financial statements of Laings UK Holding Limited which are available from Rowan House, 70 Buchanan Street, Glasgow, G1 3JE.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is between 10 and 20 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock is reviewed to ensure it is carried at the lower of cost and net realisable value, with any provision against the value being based on circumstances where a reliable estimate to the carrying value can be made.

Goodwill is carried at cost less accumulated amortisation and accumulated impairment losses. Goodwill amortisation is calculated applying the straight line method to its estimated useful life. Estimates of the economic useful life of goodwill are based on a variety of factors such as the expected use of the acquired business, the expected useful life of cash generating units to which goodwill is attributed, any legal, regulatory or contractual provision that can limit useful life and assumptions that marked participants would consider in resect of similar businesses.

All turnover arose within the United Kingdom.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2021 - 2).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 31 May 2022 are as follows:

Registered office addresses (all UK unless otherwise indicated):

There is no material difference between the replacement cost of stocks and the amounts stated above.

The impairment loss recognised in profit or loss for the year in respect of bad and doubtful trade debtors was £nil (2021: £194,390).

The Virgin Money Plc holds a bond and floating charge over the assets of the company. A cross guarantee exists with the bank over the assets of Laing the Jeweller (Glasgow) Limited and Laing Glasgow Holdings Limited.

The above borrowings include a term loan and a revolving credit facility. The term loan was repaid in full by May 2022 and incurred interest at 3.35% above LIBOR. The revolving credit facility is rolling and bears interest at 3.25% above LIBOR.

The obligations under finance lease and hire purchase contracts are secured over the related assets under the agreements.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

All shares rank equally in all respects and have the right to vote, to participate in the payment of dividends and participate in a return of capital.

None of the shares are redeemable or are liable to be redeemed.

The company has a contingent liability due to cross guarantee given to a related party. The total is £8,237,001 (2021: £5,133,712).

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Amounts contracted for but not provided in the financial statements:

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

Mrs W S Walsh's director's loan balance was £709,905 (2021: £350,386) at the year end. The maximum balances was £796,679 (2021: £476,759) during the year. Included within trade debtors is £42,360 (2021: £13,158) due from the directors at the year end.

The immediate parent company is Laing Glasgow Holdings Limited, which in turn is a wholly owned subsidiary of Laings UK Holdings Limited.

The ultimate controlling party is considered to be Mrs W S Walsh as a result their controlling interest in Laings UK Holdings Limited.