M and M Direct Limited - Limited company accounts 20.1
M and M Direct Limited - Limited company accounts 20.1
REGISTERED NUMBER: |
| Strategic Report, Report of the Directors and |
| Audited Financial Statements for the Period 3 August 2020 to 1 August 2021 |
for |
| M and M Direct Limited |
M and M Direct Limited (Registered number: 05069228) |
Contents of the Financial Statements |
for the Period 3 August 2020 to 1 August 2021 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Statement of Profit or Loss and Comprehensive Income | 9 |
Statement of Financial Position | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
M and M Direct Limited |
Company Information |
for the Period 3 August 2020 to 1 August 2021 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
INDEPENDENT AUDITORS: |
The Paragon |
32 Counterslip |
Redcliffe |
Bristol |
BS1 6BX |
SOLICITORS: |
St James' House |
St James' Square |
Cheltenham |
GL50 3PR |
M and M Direct Limited (Registered number: 05069228) |
Strategic Report |
for the Period 3 August 2020 to 1 August 2021 |
The directors present their strategic report for the period 3 August 2020 to 1 August 2021. |
REVIEW OF BUSINESS |
The company is the UK's leading pure play online retailer of off-price branded fashion, lifestyle, and sports apparel. The product is sourced from globally recognised brands and sold at discounts of between 25% and 90% off Recommended Retail Price. |
The company's result for the 52-week period ended 1 August 2021 shows an increase in revenue of 28.7% to £306.6 million versus the 53-week prior period ended 2 August 2020. Operating profit grew to £21.0 million (2020 - £11.4 million) and profit after tax increased by 83.2% to £16.8 million (2020 - £9.2 million). |
The business was impacted by 2 major events during the period. The COVID-19 pandemic continued to influence the trading environment with government restrictions impacting the first 9 months of the financial year. As an online retailer, the business was able to continue to trade and the UK and European lockdowns saw non-essential retail closed for parts of the period with customers continuing to migrate online. COVID-19 controls were further enhanced across the business during the year to ensure the business could operate safely. |
Secondly, the UK's formal exit from the European Union on 1 January 2021 brought significant challenges around selling to EU customers with the deal only agreed a week before the exit from the EU. The company had prepared for a No Deal Brexit and these preparations enabled the company to continue to sell to EU customers beyond 1 January. The costs of selling to the EU increased through additional carriage costs and import charges and while Ireland remained a key market for the company in the second half of the financial year, the company reduced marketing spend in the mainland EU markets in order to ensure these markets remained profitable. |
The 2 factors above impacted European and global supply chains as has been widely reported and while not immune to this disruption, the M and M Direct teams operated flexibly, leveraging strong supplier relationships and seeking out new opportunities in order to continue to deliver great products at great prices for customers. |
The directors prepare and monitor progress against a number of financial and operational key performance indicators. These measures include average order value, frequency of purchase, channel and device mix, new and existing customer retention, customer rates of return, marketing cost per order and working capital management. The company also considers the retention of key employees to be a key performance indicator. |
As an off-price retailer the company does not use discount codes or other short term sales promotions. Product pricing is continually monitored to optimise rate of sale and gross profit margin. The company continues to grow supported by targeting new customers and retaining existing ones. |
The average number of employees increased by 34% during the period and this was mainly due to operational staff being recruited to achieve efficient inbounding of inventory and despatch of parcels to support volume growth. |
The company closed the year in a very strong cash position once again and the company retains the support of the ultimate parent company and although not required, can access capital via the parent company to support any short-term cashflow needs. |
After carrying out a detailed forecasting exercise, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements. |
The statement of financial position on page 10 of the financial statements shows the company's position as at 1 August 2021. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks and uncertainties facing the company relate to competitive pressures and securing inventory from globally recognised brands at competitive prices. |
The principal competitive risk relates to brands and other retailers expanding their online presence and pursuing strategies more reliant on discounting and sales promotions. Product pricing is continually monitored by the company to ensure prices remain competitive. |
The company's buyers maintain strong relationships with existing brands and constantly explore opportunities with emerging brands to ensure it can continue to source product at competitive prices. |
To manage these risks and help sustain growth, the company has a strategic roadmap with initiatives identified to deliver against the company goals. |
M and M Direct Limited (Registered number: 05069228) |
Strategic Report |
for the Period 3 August 2020 to 1 August 2021 |
SECTION 172(1) STATEMENT |
In fulfilling their duty to promote the success of the company, the directors recognise that the long-term success of the company is dependent on relationships with a broad range of key stakeholders. The company always seeks to maintain the highest standards of business conduct with its employees, suppliers, customers and other parties. The company has a number of key relationships which include: |
1) Employees: the company relies on the talent, dedication and teamwork of its employees both in the warehouse and in the head office. The company regularly engages employees on key issues through a monthly business update, a monthly newsletter, discussions with HR managers and employee engagement surveys. HR is a standing agenda item at monthly board meetings and supporting the development of existing employees and ensuring that new employees integrate successfully into the business are key objectives for the company. Employee engagement is higher than industry average but the ambition is to improve this. |
2) Suppliers: the company maintains strong relationships with a number of suppliers, large and small, from across the globe. The company aims to develop long-term, constructive partnerships with key suppliers. The company's employees demonstrate integrity, commerciality and category and product knowledge in striking competitive deals with suppliers which support the company's ability to deliver keen discounts off high street prices for customers. |
3) Customers: the company has grown active customers (defined as having purchased in the last 12 months) to just short of 3.8 million. The company seeks to make the shopping and transaction experience as easy as possible for customers and engages customers primarily through online search, social media and email with customer feedback and sentiment monitored through both the contact centre and third party review sites. |
4) Community and Environment: the company is one of Herefordshire's largest employers and is proud to sponsor local events such as the The Sue Parry Football Tournament in aid of St Michael's Hospice. The company also makes direct donations such as to our main charity partner the Teenage Cancer Trust as well as supporting fundraising by employees for other causes. The company is proactive in tracking and targeting reductions in its environmental impact as reported in the Streamlined Energy and Carbon Report (SECR). |
ON BEHALF OF THE BOARD: |
M and M Direct Limited (Registered number: 05069228) |
Report of the Directors |
for the Period 3 August 2020 to 1 August 2021 |
The directors present their report with the financial statements of the company for the period 3 August 2020 to 1 August 2021. |
PRINCIPAL ACTIVITY |
| The principal activity of the company in the period under review was that of an online retailer. |
DIVIDENDS |
The directors do not recommend payment of a dividend (2020 - £Nil) |
DIRECTORS |
The directors shown below have held office during the whole of the period from 3 August 2020 to the date of this report. |
POLITICAL AND CHARITABLE DONATIONS |
| The company made no political donations during the year (2020 - £Nil). |
| Donations to UK charities in the year totalled £456,000 (2020 - £186,000). |
STREAMLINED ENERGY AND CARBON REPORTING |
| Information relating to the company's energy consumption and green house gas emissions is set out below: |
| Energy Consumption | 1/8/21 | 2/8/20 | Variance |
| kWh | kWh |
| Scope 1: Combustion of fuel and operation of facilities |
| Natural Gas | 2,556,064 | 2,134,011 | 20% |
| Direct Transport | 65,662 | 81,414 | (19% | ) |
| Fuel Oil | 930,253 | 348,376 | 167% |
| Total Scope 1 Energy | 3,551,980 | 2,563,801 | 39% |
| Scope 2: Electricity purchased |
| Total Electricity | 2,621,119 | 2,349,436 | 12% |
| Total Scope 1 and 2 Energy Consumption | 6,173,099 | 4,913,237 | 26% |
| Emissions Assessment | 1/8/21 | 2/8/20 | Variance |
| tCO 2e | tCO 2e |
| Scope 1: Combustion of fuel and operation of facilities |
| Natural Gas | 470.0 | 392.4 | 20% |
| Direct Transport | 16.3 | 22.3 | (27% | ) |
| Fuel Oil | 249.5 | 93.3 | 167% |
| Total Scope 1 | 735.8 | 508.0 | 45% |
| Scope 2 Electricity purchased and heat and steam generated |
| Location Based | 556.5 | 547.7 | 2% |
| Market Based | 700.3 | 586.3 | 19% |
| Location based - Total Scope 1 and 2 Emissions | 1,292.3 | 1,055.7 | 22% |
| Market Based - Total Scope 1 and 2 Emissions | 1,436.1 | 1,094.3 | 31% |
M and M Direct Limited (Registered number: 05069228) |
Report of the Directors |
for the Period 3 August 2020 to 1 August 2021 |
| Intensity Metric Assessment | 1/8/21 | 2/8/20 | Variance |
| tCO 2e / Turnover £m | 4.2 | 4.4 | (5% | ) |
| - Exclusions: No mandatory emissions have been excluded from this report. |
| - Emissions factors applied: DEFRA 2020/21 |
| - Methodology: This report is aligned with GHG protocol and Environmental Reporting Guidelines including streamlined energy and carbon reporting guidance. |
| - Estimations: 1% of Total Scope 1 and 2 Energy Consumption (kWh) and 1% of Total Scope 1 and 2 - Emissions (tCO 2e) have been estimated. |
| - Scope of emissions included in this report: Electricity, gas, direct transport and fuel oil |
| The company had extra temporary heater units installed in a series of marquees through winter 2020 that were installed to ensure adequate space for social distancing. |
DIRECTORS' RESPONSIBILITIES STATEMENT |
| 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), including Financial Reporting Standard 101 'Reduced Disclosure Framework'. 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 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. |
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. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Shareholders of |
M and M Direct Limited |
Opinion |
| We have audited the financial statements of M and M Direct Limited for the period ended 1 August 2021 which comprise statement of profit or loss and comprehensive income, the statement of financial position, the statement of changes in equity and the related notes 1 to 23, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 101 "Reduced Disclosure Framework (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 1 August 2021 and of its profit for the period 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 |
|
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 to 30 July 2023. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as a going concern. |
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 this 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 the other information, we are required to report that fact. |
| We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- the information given in the strategic report and the directors' report for the financial period 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 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 directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: |
| - adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or |
| - the financial statements are not in agreement with the accounting records and returns; or |
| - certain disclosures of directors' remuneration specified by law are not made; or |
| - we have not received all the information and explanations we require for our audit. |
Report of the Independent Auditors to the Shareholders of |
M and M Direct Limited |
Responsibilities of directors |
| As explained more fully in the directors' responsibilities statement set out on page 5, 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. |
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 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. |
Explanation as to what extent 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, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. |
- We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework (FRS 101 and the Companies Act 2006) and compliance with the relevant direct and indirect tax regulation in the United Kingdom. In addition, the company has to comply with laws and regulations relating to its operations, including health and safety and GDPR. |
- We understood how M and M Direct Limited is complying with those frameworks by making enquiries of management and those charged with governance to understand how the company maintains and communicates its policies and procedures in these areas. We understood any controls put in place by management to reduce the opportunities for fraudulent transactions |
- We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur through internal team conversations and inquiry of management and those charged with governance. Through these procedures we determined there to be a risk of management override and fraud risks in relation to revenue recognition and capitalisation of intangible asset costs due the judgements around costs to be capitalised and useful life of the assets. |
- In relation to management override, we sampled from the entire population of journals, identifying specific transactions which did not meet our expectations based upon specific criteria. Where instances of risk were identified through our data analytics we performed additional audit procedures to address the identified risk. These procedures included investigating the transactions to gain understanding and testing them back to source information. |
- In performing our work over revenue, we identified that the area particularly susceptible to fraud was the cut-off of transactions around period end. To address this risk we selected a sample of transactions at the period-end to perform detailed testing, including understanding the nature of the transactions and corroborating the revenue recognised to source documents. |
- In performing our work relating to the capitalisation of intangible assets, we selected a sample of costs capitalised throughout the year to perform detailed testing, including ensuring that the costs meet the recognition criteria of IAS 38 paragraph 57. We compared the costs to supporting payroll records or third-party receipt to test valuation, and tested employee costs capitalised related to employees who performed IT development work. We performed a sensitivity analysis relating to the useful life over which the assets are depreciated to assess whether a reasonably possible change in useful life would result in a material difference in the income statement. |
These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. |
- Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures included confirming that material transactions are recorded in compliance with FRS 101 and where appropriate Companies Act 2006. We have also obtained a copy of all board minutes and correspondence with regulators held throughout the year ended 1 August 2021 and through to the date of signing. Compliance with other operational laws and regulations was covered through our inquiry with no indication of non-compliance identified. |
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. |
Report of the Independent Auditors to the Shareholders of |
M and M Direct Limited |
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 |
The Paragon |
32 Counterslip |
Redcliffe |
Bristol |
BS1 6BX |
M and M Direct Limited (Registered number: 05069228) |
Statement of Profit or Loss |
and Comprehensive Income |
for the Period 3 August 2020 to 1 August 2021 |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
Notes | £'000 | £'000 |
TURNOVER | 3 |
Cost of sales | ( | ) | ( | ) |
GROSS PROFIT |
Selling and distribution costs | ( | ) | ( | ) |
Administrative expenses | ( | ) | ( | ) |
20,796 | 10,274 |
Other operating income | 4 |
OPERATING PROFIT |
Interest receivable and similar income |
20,955 | 11,412 |
Interest payable and similar expenses | 6 | ( | ) | ( | ) |
PROFIT BEFORE TAXATION | 7 |
Tax on profit | 8 | ( | ) | ( | ) |
PROFIT FOR THE FINANCIAL PERIOD |
Other comprehensive income | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
M and M Direct Limited (Registered number: 05069228) |
Statement of Financial Position |
1 August 2021 |
1/8/21 | 2/8/20 |
Notes | £'000 | £'000 |
FIXED ASSETS |
Owned |
Intangible assets | 9 |
Tangible assets | 10 | 3,729 | 4,184 |
Right-of-use |
Tangible assets | 17 |
Investment in subsidiaries | 11 |
CURRENT ASSETS |
Inventory | 12 |
Debtors | 13 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 14 | ( | ) | ( | ) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 15 | ( | ) | ( | ) |
PROVISIONS FOR LIABILITIES | 19 | ( | ) | ( | ) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Share premium | 21 |
Capital contribution reserve | 21 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS | 76,426 |
The financial statements were approved by the Board of Directors and authorised for issue on |
M and M Direct Limited (Registered number: 05069228) |
Statement of Changes in Equity |
for the Period 3 August 2020 to 1 August 2021 |
Called up | Capital |
share | Retained | Share | contribution | Total |
capital | earnings | premium | reserve | equity |
£'000 | £'000 | £'000 | £'000 | £'000 |
Balance at 29 July 2019 |
Changes in equity |
Total comprehensive income | - | - |
Balance at 2 August 2020 | 65,786 |
Changes in equity |
Total comprehensive income | - | - | - |
Balance at 1 August 2021 |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements |
for the Period 3 August 2020 to 1 August 2021 |
1. | STATUTORY INFORMATION |
M and M Direct Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparation |
| The company has taken advantage of the exemption under s400 of the Companies Act 2006 not to prepare group financial statements as it is a subsidiary of Heartland A/S. |
| These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. |
| The company is a qualifying entity and these are the company's first financial statements prepared in accordance with FRS101. The transition from IFRS to FRS101 has not had any impact on the company's accounting policies. |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework": |
• | the requirements of IFRS 7 Financial Instruments: Disclosures; |
• | the requirements of paragraph 52 of IFRS 16 Leases; |
the requirements of paragraph 58 of IFRS 16; |
• | the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements; |
• | the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements; |
• | the requirements of IAS 7 Statement of Cash Flows. |
Critical accounting judgements and key sources of estimation uncertainty |
| In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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. |
| The following significant estimates and judgements were used in preparing these financial statements: |
| Estimates |
| Goodwill impairment |
| The outcome of the company's annual impairment test for goodwill is dependent on the forecast cash flow of the cash generating unit together with key management assumptions including profit growth and discount rates. |
| Subsidiary investment impairment |
| The outcome of the company's impairment test in relation to its subsidiary, Stylepit A/S.com is dependent on the projected performance of the company together with management assumptions including order growth, cost savings and discount rates. |
| Inventory valuation |
| Inventories are stated at the lower of cost and net realisable value. Cost is based on first-in first-out principle and includes expenditure incurred in acquiring the inventories. Provision is made for slow moving inventory where appropriate in the light of recent usage, and for likely realisable values. |
| Judgements |
| Intangible assets (excluding goodwill) |
| The company holds significant intangible assets for which the capitalisation and assessment of useful economic lives involves a degree of judgement. The underlying judgements are based on historical experience, with reference to other similar types of assets. |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
| Turnover is recorded at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided to customers outside of the company, stated net of returns and value added taxes. Sales of goods are recognised when goods are despatched and title has passed which is when it is considered that the performance obligations have been met. A provision for return is accounted for based on the actual return that occurred the month following the statement of financial position date. |
| Turnover for the purchase of annual delivery services is recognised throughout the period of the contract in accordance with the IFRS15 accounting standard. |
| IFRS15 requires any unconditional rights to consideration to be disclosed as a receivable and any conditional rights to consideration to be disclosed separately as a contract asset. In addition, any obligation of the company to transfer goods or services to a customer for which consideration has already been received is disclosed separately as a contract liability. |
| Turnover for the purchase of annual delivery services is recognised throughout the period of the contract. Upfront consideration received of £954,000 has been classified as contract liabilities within creditors. £708,000 of contract liabilities recognised in the prior period have been recognised as part of turnover in the current period. |
Intangible assets |
| Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. |
| Internally generated assets |
| Expenditure on internal software development activities is capitalised if the product or process is technically and commercially feasible and the company intends, has the technical ability and has sufficient resources to complete development, future economic benefits are probable and if the company can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan and design of website and back office systems. The expenditure capitalised includes the cost of direct labour. Other development expenditure is recognised in the statement of profit or loss and comprehensive income as an expense incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses. |
| Amortisation |
| Amortisation is charged to the statement of profit or loss and comprehensive income on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at the statement of financial position date. Other intangible assets are amortised from the date they are available for use. |
| The estimated useful lives are as follows: |
| - Brands - 5-10 years |
| - Software / software development - 3 years |
| Impairment excluding inventories and deferred tax assets |
| The carrying amounts of the company's assets are reviewed at each statement of financial position date to determine whether there is any indication of impairment; a financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. If any such indication exists, the asset's recoverable amount is estimated. |
| For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is assessed for impairment in accordance with IAS 36 at each statement of financial position date or whenever there are indications of impairment. |
| An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of profit or loss and comprehensive income. |
| Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. |
| Other intangible assets |
| Expenditure on internally generated goodwill and brands is recognised in the statement of profit or loss and comprehensive income as an expense as incurred. |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life: |
Improvements to property - 15% on cost |
Plant and equipment - 25% on cost, 15% on cost and 12.5% on cost |
Fixtures and fittings - 25% on cost |
Motor vehicles - 25% on cost |
Right to Use Assets are depreciated on a straight line basis over the duration of the underlying lease. |
Financial instruments |
| Classification of financial instruments issued by the company |
| Following the adoption of IAS 32, financial instruments issued by the company are treated as equity only to the extent that they meet the following two conditions: |
| (a) they include no contractual obligations upon the company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the company; and |
| (b) where the instrument will or may be settled in the company's own equity instruments, it is either a nonderivative that includes no obligation to deliver a variable number of the company's own equity instruments or is a derivative that will be settled by the company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments |
| To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares. |
Inventory |
| Inventory is valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Taxation |
| Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the statement of profit or loss and comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. |
| Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous periods. |
| Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. |
| A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. |
Research and development |
| Expenditure on research activities is recognised in the statement of profit or loss and comprehensive income as an expense as incurred. |
Foreign currencies |
| Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling using the contracted rate or the rate of exchange ruling at the statement of financial position date and the gains or losses on translation are taken into account in arriving at the operating result. |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
2. | ACCOUNTING POLICIES - continued |
Leases |
| The company determines whether the contract is, or contains a lease. This is deemed to be the case where the contact conveys the right to use an asset for a period of time in exchange for consideration. In determining whether a lease exists, the company determines whether the contract meets the following criteria: |
| - The contract contains an identified asset; |
| - The company has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use; |
| - The company has the right to direct the use of the asset throughout the period of use |
| At the lease commencement date, the company recognises the lease as a right to use asset and a corresponding lease liability in the statement of financial position. The right to use assets are shown separately on the statement of financial position and are measured at cost, being the initial measurement of the lease liability, any direct costs incurred by the company, an estimate of any costs to dismantle or remove the asset at the end of the lease and any lease payments made in advance of the lease commencement date. |
| The company depreciates right to use assets on a straight line basis from the lease commencement date over the lease term. The assets are also assessed for impairment where such indicators exist. |
| The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate. |
| At the lease commencement date, the company measures the lease liability at the present value of the remaining lease payments, discounted using either the interest rate implicit in the lease or the incremental borrowing rate specific for each type of asset. Over the term of the lease, interest is charged on the liability as a finance cost, whilst the liability is also reduced by any lease payments made. The lease liability is remeasured to reflect any reassessment or modification to the terms of the lease contract, any remeasurement is also taken as an adjustment to the right to use asset. |
| The company elects to account on a case by case basis, for any short term leases and leases of low value using the practical expedients in IFRS16, namely as a straight line expense over the term of the lease. Short term leases are defined as those with a term of less than 12 months and low value leases are those which are not deemed financially significant individually (or in totality) to the company. |
Employee benefit costs |
| Defined contribution plans |
| A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of profit or loss and comprehensive income as incurred. |
| Short-term benefits |
| Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
| The directors have prepared these financial statements on a going concern basis. This is supported by the preparation of an annual forecast up to 31 July 2022 and a forecast to 30 July 2023. Forecasts have been prepared based on both expected projected growth and also based on a worst case scenario of a contraction in business. Both scenarios indicate that the company has sufficient committed working capital facilities to continue to trade. |
| Investment in subsidiaries |
| The company accounts for its investment in subsidiaries at original cost less subsequent impairment losses. |
| Trade and other receivables |
| Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses. |
| Trade and other payables |
| Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method. |
| Provisions |
| A provision is recognised in the statement of financial position when the company has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability. |
| Financing income and expenses |
| Financing income and expenses comprises interest on external bank balances. |
| Interest income and interest payable is recognised in the statement of profit or loss and comprehensive income as it accrues, using the effective interest method. Dividend income is recognised in the statement of profit or loss and comprehensive income on the date the entity's right to receive payments is established. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
4. | OTHER OPERATING INCOME |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Insurance claim | - | 729 |
RDEC credits | 156 | 394 |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
5. | EMPLOYEES AND DIRECTORS |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Wages and salaries | 23,273 | 18,097 |
Social security costs |
Other pension costs |
The average number of employees during the period was as follows: |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
Management and administration | 236 | 181 |
Despatch and sales | 703 | 520 |
The other pension costs detailed above relate to defined contribution pension plans. |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£ | £ |
Emoluments etc | 704,544 | 721,990 |
Pension contributions to money purchase schemes | 11,629 | 11,400 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Interest on inter-company loans | - | 31 |
Other interest |
Lease interest - Right to Use |
Assets |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
7. | PROFIT BEFORE TAXATION |
The profit before taxation is stated after charging/(crediting): |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Cost of inventories recognised as expense |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts or finance leases |
Profit on disposal of fixed assets | ( | ) | ( | ) |
Brand amortisation | 1 | 44 |
Software development amortisation |
Software and domain name amortisation |
Auditors' remuneration |
Auditors fees - tax compliance services |
Foreign exchange differences |
8. | TAXATION |
Analysis of tax expense |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Current tax: |
Tax |
Prior year tax | (3 | ) | (222 | ) |
Total current tax | 4,109 | 1,787 |
Deferred tax | ( | ) |
Total tax expense in statement of profit or loss and comprehensive income |
Factors affecting the tax expense |
The tax assessed for the period is higher (2020 - lower) than the standard rate of corporation tax in the UK. The difference is explained below: |
Period | Period |
3/8/20 | 29/7/19 |
to | to |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Profit before income tax |
Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%) |
Effects of: |
Adjustment in respect of prior years | ( | ) | ( | ) |
Expenses not deductible for tax purposes |
Income not taxable | ( | ) | ( | ) |
Effect of rate change |
Tax expense |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
9. | INTANGIBLE FIXED ASSETS |
Software |
Software | and domain |
Goodwill | Brand | development | name | Totals |
£'000 | £'000 | £'000 | £'000 | £'000 |
COST |
At 3 August 2020 |
Additions |
Disposals | ( | ) | ( | ) |
At 1 August 2021 |
AMORTISATION |
At 3 August 2020 |
Amortisation for period |
Eliminated on disposal | ( | ) | ( | ) |
At 1 August 2021 |
NET BOOK VALUE |
At 1 August 2021 |
At 2 August 2020 |
| Amortisation and impairment charge |
| The amortisation and impairment charge is recognised in the following line item in the income statement: |
| 1/08/21 | 2/08/20 |
| £'000 | £'000 |
| Administrative expenses | 3,802 | 2,180 |
| Impairment testing |
| Goodwill and indefinite life intangible assets considered significant in comparison to the company's total carrying amount of such assets have been allocated to the company's one cash generating unit: |
| The recoverable amount of goodwill has been calculated with reference to its value in use. The key features of this calculation are shown below: |
| 1/08/21 | 2/08/20 |
| Period on which management approved forecasts are based | 2 years | 2 years |
| Growth rate applied beyond approved forecast period | 6.9% | 15.0% |
| Discount rate | 10.0% | 10.0% |
| Management have approved forecasts over a 2 year period in order to provide a robust test. The growth rate selected is a decrease on the prior period and reflects current prudent expectations for the long-term average growth rate that management consider reasonable and in line with market expectations. |
| The recoverable amount of the cash generating unit was based on its value in use and was determined by discounting the future cash flows to be generated from the continuing use of the cash generating unit. |
| The carrying amount of the cash generating unit was determined to be lower than its recoverable amount, thus no impairment loss has been recognised in the period (2020 - £Nil). The headroom has been calculated to be £108,331,919. |
| The discount rate applied is a pre-tax market participant rate. |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
10. | TANGIBLE FIXED ASSETS |
| Improvements | Fixtures |
| to | Plant and | and | Motor |
| property | equipment | fittings | vehicles | Totals |
| £'000 | £'000 | £'000 | £'000 | £'000 |
| COST |
| At 3 August 2020 | 5,010 | 3,927 | 5,276 | 214 | 14,427 |
| Additions | 320 | 367 | 235 | 32 | 954 |
| Disposals | - | (777 | ) | (2,188 | ) | (28 | ) | (2,993 | ) |
| At 1 August 2021 | 5,330 | 3,517 | 3,323 | 218 | 12,388 |
| DEPRECIATION |
| At 3 August 2020 | 3,914 | 2,192 | 4,020 | 117 | 10,243 |
| Charge for period | 348 | 555 | 447 | 38 | 1,388 |
| Eliminated on disposal | - | (774 | ) | (2,170 | ) | (28 | ) | (2,972 | ) |
| At 1 August 2021 | 4,262 | 1,973 | 2,297 | 127 | 8,658 |
| NET BOOK VALUE |
| At 1 August 2021 | 1,068 | 1,544 | 1,026 | 91 | 3,729 |
| At 2 August 2020 | 1,096 | 1,735 | 1,256 | 97 | 4,184 |
11. | INVESTMENT IN SUBSIDIARIES |
Unlisted |
investments |
£'000 |
COST |
At 3 August 2020 | 70 |
Additions | 6,223 |
At 1 August 2021 | 6,293 |
NET BOOK VALUE |
At 1 August 2021 | 6,293 |
At 2 August 2020 | 70 |
The company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Registered office: Trinity House, 7 St Georges Quay, Cork, Ireland |
Nature of business: |
% |
Class of shares: | holding |
£'000 | £'000 |
Aggregate capital and reserves |
| The profit of M and M Direct Limited (Eire) for the period ended 1 August 2021 was £Nil (2020 - £Nil). |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
11. | INVESTMENT IN SUBSIDIARIES - continued |
Registered office: Laplansgade 4A, 2300 Kobenhavn S, Denmark |
Nature of business: |
% |
Class of shares: | holding |
£'000 | £'000 |
Aggregate capital and reserves |
Profit/(loss) for the year | ( | ) |
| The company purchased 100% of the shares in Stylepit.com A/S on 31 July 2021 for a total consideration of DKK 54,000,000. |
| Financial asset impairment testing |
| The key assumptions used to determine the recoverable amount (value in use) for the subsidiary, Stylepit.com A/S, including a sensitivity analysis, are disclosed below. |
| The company has used projections for Stylepit.com A/S for the next 5 financial years and a terminal value with efficiency opportunities realised in Stylepit.com A/S over the period. The projections are not factual and reflect the latest assumptions of the senior management of M and M Direct Limited. A weighted average cost of capital (WACC) of 10% has been used which is consistent with the goodwill impairment test WACC. |
| The senior management of M and M Direct Limited consider the key assumptions in the Stylepit.com A/S projections to be as follows: |
| - Order growth due to transition to off-price business model and increase in inventory depth |
| - Opportunities to improve gross profit % through buying efficiencies |
| - Reduction in warehouse operation costs |
| - Reduction in marketing costs due to efficiencies |
| The above assumptions and estimates were assessed and it was decided the key drivers which are sensitive to change which ultimately affect the value in use are: |
| - Order growth |
| - Gross profit % improvement |
| - Reduction in marketing costs |
| Sensitivity analysis |
| DKKm |
| Purchase price | 54.0 |
| Current Net Present Value (NPV) | 80.9 |
| Headroom | 26.9 |
| The senior management considered each of the sensitivities and determined for each what reasonable possible change could occur relative to the projected figures. |
| Order growth could reasonably be lower than projected. For sensitivity analysis, order growth is reduced from 15% to 10%. |
| Gross profit % improvement could be less than projected. For sensitivity analysis, gross profit % improvement reduced from 1% to 0.5%. |
| Efficiency gain on marketing could be less than projected. For sensitivity analysis, annual marketing efficiency gain reduced from 5% to 2.5%. |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
11. | INVESTMENT IN SUBSIDIARIES - continued |
| Only the marketing sensitivity would challenge the carrying amount of the investment however, the 5% annual efficiency assumed in the base valuation is deemed to be extremely prudent by management as year 5 marketing cost per order (CPO) would still be 23.8% higher than the current inflation adjusted M and M Direct Limited EU marketing CPO. If year 5 marketing CPO could be brought in line with M and M Direct Limited EU CPO then the carrying amount of the investment would increase to DKK 146.7m, which would be DKK 93m higher than the purchase price. |
| Valuation | Variance to Current NPV |
| DKKm | DKKm |
| Sensitivity analysis impact on NPV |
| Orders growth from +15% to +10% | 61.2 | (19.8 | ) |
| GP% improvement from +1% to +0.5% | 68.0 | (13.0 | ) |
| Annual marketing efficiency gain from +5% to +2.5% | 46.4 | (34.5 | ) |
| Marketing CPO to M and M International rate by FY25 | 146.7 | 65.8 |
12. | INVENTORY |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Finished goods and goods for |
resale | 58,992 | 51,137 |
Inventory provision | ( | ) | ( | ) |
13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Trade debtors |
Amounts owed by group undertakings |
Prepayments and other |
receivables |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Leases (see note 16) |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
Contract liabilities | 954 | 708 |
VAT | 1,148 | 3,907 |
Other creditors |
Accrued expenses |
| Contract liabilities relate to the unlimited delivery offer accounted for under IFRS15. The £708,000 of contract liabilities recognised in the prior period have been recognised as part of turnover during the current period. |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Leases (see note 16) |
Amounts owed to group undertakings |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
16. | FINANCIAL LIABILITIES - BORROWINGS |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Current: |
Leases (see note 17) | 1,807 | 1,778 |
Non-current: |
Leases (see note 17) | 3,292 | 5,104 |
Terms and debt repayment schedule |
1 year or |
less | 1-2 years | Totals |
£'000 | £'000 | £'000 |
Leases | 1,807 | 3,292 | 5,099 |
Lease liabilities relate to lease commitments in relation to Right to Use Assets accounted for under IFRS16. |
17. | LEASING |
Right-of-use assets |
Tangible fixed assets |
1/8/21 | 2/8/20 |
£'000 | £'000 |
COST |
At 3 August 2020 | 8,876 | 8,876 |
Additions | 31 | - |
8,907 | 8,876 |
DEPRECIATION |
At 3 August 2020 | 1,870 | - |
Charge for year | 1,867 | 1,870 |
3,737 | 1,870 |
NET BOOK VALUE |
Lease liabilities |
Minimum lease payments fall due as follows: |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Within one year | 1,807 | 1,778 |
Between one and five years | 3,292 | 5,104 |
5,099 | 6,882 |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
18. | FINANCIAL INSTRUMENTS |
As at the period end date, the company held a foreign exchange forward contract granting the company the right to sell €1m on both 26 August 2021 and 24 September 2021 for a strike rate of 1.19, if the spot rate at the date of expiry was in excess of this rate. The contract also gave rise to an obligation for the company to sell €1m on both 26 August 2021 and 24 September 2021at a rate of 1.158 if the spot rate at the date of expiry was below 1.123. No fees were paid in connection with the contract. |
The contract has not been actioned as the spot rate at both dates of expiry was between 1.123 and 1.19. |
19. | PROVISIONS FOR LIABILITIES |
1/8/21 | 2/8/20 |
£'000 | £'000 |
Deferred tax |
Deferred tax |
£'000 |
Balance at 3 August 2020 |
Credit to Statement of Profit or Loss and Comprehensive Income during period | (92 | ) |
Balance at 1 August 2021 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 1/8/21 | 2/8/20 |
value: | £ | £ |
Ordinary A | 0.01 | 1,032 | 1,032 |
Ordinary B | 0.01 | 17 | 17 |
1,049 | 1,049 |
| All issued shares rank pari passu (as if they were one class of share) in relation to payment of dividends. |
| Each class of share carries one vote per share. |
21. | RESERVES |
Capital |
Retained | Share | contribution |
earnings | premium | reserve | Totals |
£'000 | £'000 | £'000 | £'000 |
At 3 August 2020 | 76,425 |
Profit for the period |
At 1 August 2021 | 93,256 |
M and M Direct Limited (Registered number: 05069228) |
Notes to the Financial Statements - continued |
for the Period 3 August 2020 to 1 August 2021 |
22. | RELATED PARTY DISCLOSURES |
| Transactions with key management personnel |
| The key management personnel of the company comprise the executive and non-executive directors. |
| During the period, key management personnel of the company purchased goods totalling £5,085 (2020 - £3,100) from the company. All transactions were at arm's length. |
| There were no other material transactions between the company and its key management personnel during the period. |
| Transactions with other group companies |
| 1/8/21 | 2/8/20 |
| £'000 | £'000 |
| Company | Relationship |
| Purchases made or expenses incurred from |
| Bestseller Wholesale UK Limited | Fellow subsidiary | 10,361 | 9,095 |
| Heartland AS | Ultimate controlling party | 99 | 32 |
| Vila Clothes Limited | Fellow subsidiary | - | 11 |
| Receivables outstanding |
| M and M Direct Limited (Eire) | Subsidiary | 428 | 1,859 |
| Payables outstanding |
| M and M Direct Limited (Eire) | Subsidiary | 70 | 70 |
| Heartland AS | Ultimate controlling party | 22 | 29 |
| Bestseller Wholesale UK Ltd | Fellow subsidiary | 429 | 1,074 |
| The company purchased 100% of the shares in Stylepit.com A/S from Aktieselskabet af 22.1.2021 on 31 July 2021 for a total consideration of DKK 54,000,000. |
23. | ULTIMATE CONTROLLING PARTY |
| The company’s immediate parent undertaking is Aktieselskabet af 5.6.2014, a company registered in Denmark. |
| In the directors’ opinion the company’s ultimate controlling party is Heartland A/S, a company registered in Denmark |
| The largest group in which the results are consolidated is Heartland A/S, which is registered in Denmark. The smallest group in which they are consolidated is Bestseller A/S, which is registered in Denmark. |
| The consolidated financial statements for the group may be obtained at: |
| Erhvervsstyrelsen |
| Langelinie Alle 17 |
| DK-2100 Copenhagen O |
| Denmark |
| www.cvr.dk |