ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE PERIOD ENDED 24 JUNE 2023
Whitings LLP
Chartered Accountants
Fenland House
15B Hostmoor Avenue
March
Cambridgeshire
PE15 OAX
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FENMARC PRODUCE LIMITED
COMPANY INFORMATION
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FENMARC PRODUCE LIMITED
CONTENTS
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FENMARC PRODUCE LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 24 JUNE 2023
We described last year as tough, and this year has been no different. Whilst pre-tax profits are an improvement on last year, they still remain subdued when compared to prior years. The continuing challenges of high inflation and crop availability remain, and this year were joined by significant hikes in interest rates. As a business and as individuals we are agile, and we react to situations positively, but the onslaught of these challenges has been relentless. The rising costs throughout the supply chain have made us even more alert and responsive. We are thankful that our trusted customer relationships allowed us to recover most of this inflation impact: these relationships have been more important than ever in order to help protect us. The scale of the challenge is evident, with year on year % sales growth close to double digit, but our volumes pretty flat.
As is the case in most years, we managed product volume increases and decreases, new product introductions and delisting’s with great skill in order to deliver customer service levels of close to 99%, despite all of the challenges thrown at us. We also managed the margin impacts of these volume shifts pretty well. There were some significant changes in our customer base, with one new customer onboarded and another relationship paused. Looking up the supply chain, in the same way that our customers have been supportive of us, we’ve supported our suppliers with sustainable prices. However, our recovery of inflation has not matched our input inflation, mainly because of the lag time between accepting and passing on cost. Despite all of these headwinds, we continue to invest in our people and creating a safe, positive workplace for everyone. We continue to pay the Living Wage which increased by over 10% this year, but our colleagues work hard and deserve their reward. Colleague safety remains our number one priority with our constant message – nothing we do at work is worth getting hurt for. The introduction of improved near miss reporting has helped this culture with all our colleagues being alert to what could lead to an accident rather than simply reporting what has happened. We have also increased the size of some of our teams in order to support our growing and increasingly complex business, with particular focus on training, sustainability and commercial. Our historic investments in technology and efficiency have been substantial and therefore our level of investment in FY23 did reduce when compared to previous years, but this still amounted to over £1.7m. This was focussed on replacement and efficiency projects, enabling us to continue making the best use of our factory space, maximising productivity, and to be as flexible as the business demands. Our investments are made with the aim of future-proofing the Company as much as possible, and this helped to improve our profitability for FY23. However, we still owe money on many of our investments, and therefore we saw a material increase in interest payments on the money we have borrowed as a consequence of rising interest rates. Sustainability is growing in importance for us as a Company and as individuals. We really want to do the right thing. We have a clear plan focussed around three key areas – Climate; Commodity; and Community. Our £1m investment in ground based solar panels continues, but has hit issues on planning consent. This has moved timings back more than we would have wanted, but we’ll keep on pushing to make this happen as soon as we can. We aim to have zero carbon emissions by 2027 (scope 1 & 2) and we are working hard all the way through our supply chain to be the best that we can be. In summary, this year has been a rough ride, but we’ve managed to stay in the saddle, and we are optimistic that we have everything in place for the Company to continue to thrive and grow. We need to be prudent and focussed on spending money because of the cost of borrowing, but that won’t stop us investing in the right things for the Company to make us better.
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FENMARC PRODUCE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 24 JUNE 2023
Our core business is the sourcing and supply of fresh produce. It’s an extremely competitive and fast moving sector, especially when it comes to price, quality and availability, and of course we’re always at the mercy of the weather which can seriously affect supply and demand.
How do we mitigate the risks? First of all by having talented people – we’re proud to have really skilled, motivated individuals working throughout the Company. We’re good at communicating too, constantly in touch with our customers on one side, and our suppliers on the other to make sure we deliver great quality produce on time and at the best possible price. And we’ve got a strong track record. We know the produce sector inside out, we’ve traded in it for many years, it’s what we do.
We measure how well the Company is performing, and how successfully it’s achieving objectives, by monitoring turnover, gross profit, net profit and net worth.
Our responsibility as a Board is to act always in the best interests of the Company; we’re legally bound by Section 172 of the Companies Act 2006 to do that. We must make decisions that we believe are right for the Company’s members and stakeholders now and in the longer term, and that are right also for the environment.
You can find out how we fulfil this responsibility in the Directors’ Report.
This report was approved by the board and signed on its behalf.
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FENMARC PRODUCE LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 24 JUNE 2023
Read on for the directors’ report and financial statements for the period ended 24th June 2023. But first, the law requires us to make a ‘directors’ responsibilities statement’. Here goes…
The directors present their report and the financial statements for the period ended 24 June 2023.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the period, after taxation, amounted to £618 thousand (2022 - £289 thousand).
A dividend of £140 thousand was paid, an increase on the £70 thousand paid in 2022.
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FENMARC PRODUCE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 24 JUNE 2023
The directors who served during the period were:
We take extreme care to minimise any adverse impact on the environment caused by the work we do, while of course keeping in mind health, safety and economic issues. The Company has complied with all applicable legislation and regulations.
We’re confident that the business is in a strong position to increase sales and profitability going forward. We have talented, hardworking people working for us, and the right facilities and investment opportunities are in place for improvement to happen.
Our people are at the heart of what we do, and they are key to our success. The contribution every colleague makes is valued and appreciated.
Those aren’t just words. Our equal opportunity policy applies from initial recruitment, through training and career development, appraisal and promotion, right up to retirement. It goes without saying that we communicate clearly and regularly with everyone through regular briefings and ‘listening groups’ where colleagues can share ideas and suggestions. We provide an environment where people can work without discrimination, harassment and victimisation, and where colleagues are treated equally. We always give full and fair consideration to recruiting people with disability, and enable rewarding careers through training and assistance where necessary. If an individual becomes disabled while working for us, we do everything we can to help them retrain for alternative work, should that be necessary. We support local communities and charities financially and with product donations. And if colleagues are raising funds for charity, we are of course happy to support them.
Healthy relationships throughout the supply chain, based on openness and absolute integrity, are of course vital in any business.
At one end, we work collaboratively with retail customers to deliver consistently high quality, good value, excellent service and strong innovation. We know they value this approach. At the other end, we nurture relationships with growers/suppliers of raw materials, and essential goods and services. We build relationships with people and businesses that are expert in their field so that we can provide customers with year round availability at prices that work for everyone.
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FENMARC PRODUCE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 24 JUNE 2023
We’re proud of our green record. We’ve been using 100% renewable electricity since October 2020 which meant that greenhouse gas emissions from electricity for the year were zero (FY22 zero).
The figures for FY22 have been re-stated based on our financial year, they were previously based on an April-March reporting period in line with OFGEM reporting. FY23 FY22 (re-stated) Scope 1 CO2 emissions (tonnes) 91.50 158.20 Scope 2 CO2 emissions (tonnes) - - Total CO2 emissions (tonnes) 91.50 158.20 Energy consumption (MWh) 2129 2185 Kg of CO2 per tonne sold 4.25 7.40
In this past year we have actively engaged our customers and driven plastic saving initiatives. We have reduced the gauge of flexible plastics in the product we supply and furthermore challenged market norms by introducing flexible plastic formats in the place of rigid plastics. We’re proud to have delivered a 18% total plastic reduction compared to the previous year.
The auditors, Whitings LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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FENMARC PRODUCE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FENMARC PRODUCE LIMITED
We have audited the financial statements of Fenmarc Produce Limited (the 'Company') for the period ended 24 June 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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FENMARC PRODUCE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FENMARC PRODUCE LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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FENMARC PRODUCE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FENMARC PRODUCE LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• Enquiry of management around actual and potential litigation and claims; • Reviewing financial statement disclosures and testing supporting documentation to assess compliance with applicable laws and regulations; • Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, and reviewing accounting estimates for bias; and • We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including health & safety, food hygiene, employment and other operating issues.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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FENMARC PRODUCE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FENMARC PRODUCE LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants & Statutory Auditor
Fenland House
15B Hostmoor Avenue
Cambridgeshire
PE15 OAX
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FENMARC PRODUCE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 24 JUNE 2023
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FENMARC PRODUCE LIMITED
REGISTERED NUMBER: 02508638
BALANCE SHEET
AS AT 24 JUNE 2023
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FENMARC PRODUCE LIMITED
REGISTERED NUMBER: 02508638
BALANCE SHEET (CONTINUED)
AS AT 24 JUNE 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 31 form part of these financial statements.
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FENMARC PRODUCE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 24 JUNE 2023
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FENMARC PRODUCE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 25 JUNE 2022
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
Fenmarc Produce Limited is a company limited by shares and incorporated and domiciled in the UK. The registered number is 02508638 and the registered address is 178 Gosmoor Lane, Elm, Wisbech, Cambridgeshire, PE14 0EG.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The presentation currency of these financial statements is sterling. All amounts within the financial
statements have been rounded to the nearest £1,000. The Company's accounting reference date is 30 June. Financial statements are drawn up for a 52-week period ending within seven days of the accounting reference date, at which time a 53-week period is used. The Company's ultimate parent undertaking, Fenmarc Holdings Limited, includes the Company in its consolidated financial statements. The consolidated financial statement of Fenmarc Holdings Limited are prepared in accordance with FRS 102 and are available to the public and may be obtained from the address given on the company information page. In these financial statements, the Company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures; -Reconciliation of the number of shares outstanding from the beginning to end of the period; -Cash Flow Statement and related notes; and -Key Management Personnel compensation.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
2.Accounting policies (continued)
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
2.Accounting policies (continued)
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
2.Accounting policies (continued)
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's 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
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
2.Accounting policies (continued)
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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 revision and future periods where the revision affects both current and future periods. The residual values, useful lives and depreciation methods of fixed assets are estimated by management, drawing on their accumulated knowledge and experience of the business. These are reviewed regularly and adjusted prospectively if appropriate if there is an indication of a significant change since the last reporting date. The Company trades in perishable food and as a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating stock provision, management considers the nature and condition of the stock along with applying assumptions around anticipated saleability of the perishable food.
Turnover represents the amounts derived from the provision of goods after deduction of value added tax. The turnover and profits are entirely attributable to the Company's main activity of packaging and further processing of fresh and prepared produce. All turnover is derived from activities undertaken in the United Kingdom. Any discounts are presented within turnover in the Profit & Loss Account.
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
9.Taxation (continued)
Tax losses of approximately £3m are available for carry forward to be set against future taxable profits.
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
Page 25
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
The invoice discounting facility is secured against the sales ledger debtors. The finance lease liabilities are secured against the asset to which they relate. The term loan is secured against the land and buildings within the Group.
Page 26
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
The finance lease liabilities are secured against the asset to which they relate. The term loan is secured against the land and buildings within the Group.
Page 27
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
Page 28
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
Page 29
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
Share premium account
Other reserves
Profit and loss account
We have reviewed the P&L classification of costs and made changes to more accurately reflect how we view these costs within our business, such as reclassification a proportion of labour costs from cost of sales to administrative expenses. We have restated the prior year’s numbers to be comparable. This has had no affect on operating profit. The amount reclassified in the previous year amounted to £4,247K.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £254K (2022: £206K). Contributions totalling £17K (2022: £15K) were payable to the fund at the balance sheet date and are included in creditors.
Page 30
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FENMARC PRODUCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 24 JUNE 2023
The Company is a subsidiary undertaking of Fenmarc Holdings Limited, registered address of 178 Gosmoor Lane, Elm, Wisbech, Cambridgeshire, England, PE14 0EG. The ultimate controlling party is MA Harrod who holds a majority shareholding in Fenmarc Holdings Limited.
The largest and smallest group in which the results of the Company are consolidated is that headed by Fenmarc Holdings Limited, incorporated in England and Wales. The consolidated financial statements of the groups are available to the public and may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
Page 31
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