|
Registered number: 02088118
LECICO PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
COMPANY INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLA Evelyn Partners Limited
|
|
|
Chartered Accountants & Statutory Auditor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTENTS
|
|
|
|
|
|
|
|
|
Directors' Responsibilities Statement
|
|
Independent Auditor's Report
|
|
Statement of Comprehensive Income
|
|
Statement of Financial Position
|
|
Statement of Changes in Equity
|
|
Notes to the Financial Statements
|
|
|
|
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present the Strategic Report for Lecico PLC for the year ended 31 December 2023.
The directors are pleased to report retained earnings for the year were £267,605 (2022 - £323,335) on revenues of £23,873,623 (2022 - £21,772,165).
Net assets as at 31 December 2023 amounted to £2,657,255 (2022 - £893,979) with net current assets of £1,719,252 (2022 - £339,494).
During the year, the Company paid dividends of £Nil (2022 - £3,472,750).
The bathroom market in the UK continues to be competitive with many companies pursuing aggressive pricing offers to retain market share, although there has been significant price inflation across the sector in recent years in response to global inflation.
Consolidation in the merchant market has concentrated buying power into fewer organisations. National merchant groups have entered partnerships directly with suppliers making pricing much more competitive.
Despite the market being down towards the end of the year the company saw its activity and share increase significantly during the year due to an expanding product portfolio, good product availability and strong partnerships with key customers. This led to significant growth in revenues and Management took this opportunity to invest in the growth plan through recruitment, marketing and product development initiatives.
Strategy
The key objective of the company is to build a recognised mid-market bathroom brand known for design, creativity, quality, performance, innovation, customer relationships and its people.
This is being achieved through consistency, flexibility, understanding our customers’ needs and ambitions, delivering first class products and services and creating an open, respectful, proud and positive culture. In addition to this, there is an increased focus on sustainability both operationally and within new product development.
In parallel to the product development strategy, the Company is investing to develop its presence in the specification business to unlock opportunities in house builders, social housing, care homes and commercial developments.
The next cycle of growth strategy which sets an aspiration to double revenues and gain further market share has been approved by the Board, and further investments were made during the year.
Environmental, Social and Governance
Lecico PLC recognises that it has an obligation to minimise its impact on the planet and people through the environmental results of its operations and the social role it plays as an employer, customer and supplier to others.
Social responsibility is another key pillar of our corporate ethos. We are dedicated to fostering diverse, inclusive, and safe workplaces where all employees are valued and empowered to thrive. Furthermore, we actively engage with local communities, supporting initiatives that promote education, healthcare, and economic development, thereby creating shared value for society at large.
|
|
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Governance excellence is fundamental to maintaining the trust and confidence of our stakeholders. We adhere to the highest standards of corporate governance, ensuring transparency, accountability, and ethical conduct in all our business dealings. Our robust governance framework promotes integrity, fairness, and responsible decision-making, underpinning our long-term sustainability and resilience.
Although Lecico PLC is not directly involved in manufacturing products, the products that we purchase from our parent company in Egypt plus other products sourced globally, do have an environmental impact in their manufacturing, along with the shipping of those products.
The operations of the Bedford site for warehousing, sales and administration also require energy but these are directly within the control of Lecico PLC..
There have been a number of projects that have been undertaken to reduce the energy usage on the Bedford site and to reduce the wider impact of shipping and transportation of goods. These include:
∙Upgrading all lighting to low energy LED lighting.
∙Changing the company car fleet to hybrid as a minimum, currently 8 fully electric vehicles.
∙All warehouse vehicles have been changed from LPG to zero emission electric vehicles.
∙Installation of 4 electric vehicle charging stations to be completed by end of March 2024.
In addition to reducing our energy consumption as above, our electricity supply is provided from 100% renewable sources.
Furthermore, we have undertaken various successful projects to reduce the impact of our purchasing and transportation by;
∙Increasing the quantity of products carried in each container through improved loading, leading to a 23% reduction in container volumes.
∙Investing in machinery leading to a 50% reduction in plastic usage.
∙Repurposing plastic packaging on imported goods for outbound palletised deliveries.
∙Ensuring that all plastic, wood and cardboard that is not repurposed for onward transportation is recycled.
Lecico PLC has committed to become a Carbon Net Zero company in line with the UK Government's target of 2050. During 2023, the company took the first steps in measuring our Scope 1&2 emissions supported by an external third party specialist.
We have now committed to undertake the much wider Scope 3 measurement during 2024 along with Scope 1&2 by end August 2024.
Future Outlook
Through a combination of product development, broadening markets, distinctive brands and robust foundations, coupled with a culture of continuous improvement, the company is well placed to maintain profitable growth in the foreseeable future.
The senior leadership team are focused on delivery of the growth strategy, whilst continuing to robustly manage and mitigate the impacts of the global challenges faced by the company.
The directors have made an assessment in preparing these financial statements that the Company is a going concern and have concluded that there are no material uncertainties that cast doubt on the Company's ability to continue as a going concern.
|
|
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal risks and uncertainties
|
The management of the business and the execution of the Company's strategy are subject to a number of risks. The principal risks and uncertainties are outlined on a company basis as follows:
Business risks
The key business risks affecting the company are considered to relate to the effect of the economic environment and consumer confidence, as well as competition from other competitors and confidence in the construction market.
In 2024 the company anticipates a more stable global business environment however there will still be some inflationary pressures, geopolitical uncertainty and potential for supply chain volatility. The business has demonstrated resilience to these risks and the leadership team will continue to closely monitor both the market and the company performance to ensure that any downside is minimised.
We expect the market to be somewhat volatile during the first half of 2024 with price pressure on products combined with erratic competitor behaviours. However, there is an expectation these pressure can be offset through good cost control. In the second half of 2024, we expect to start to see a movement back towards more normalised trading and market behaviour.
Price sensitivity and customer loyalty
The market in which the company operates remains competitive. There is risk around the ability to remain price competitive and secure new customers as well as retain existing ones.
Currency risk
The company operates internationally and is subject to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and the Euro. The company does not hedge any transactions, and foreign exchange differences on retranslation of foreign assets and liabilities are recognised in the Statement of Comprehensive Income.
Interest rate risk
The company finances its operations through a mixture of intercompany debt, shareholders’ funds and where necessary invoice and trade financing.
Key performance indicators
|
The following key performance indicators are used by the board to control and monitor the business.
The change in the current ratio is the result movements in intercompany balances as well as extended trading terms offered to the company from its ultimate parent company and primary supplier, Lecico Egypt SAE.
Gross margins remained under pressure throughout the year due to several macro-economic factors impacting the supply chain as well as increased input costs due to inflationary pressures, both of which were offset in some respects by reduced freight costs on imports.
|
|
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board and signed on its behalf.
|
|
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The principal activity of the Company is that of the sale of Lecico bathroom products in the UK.
The profit for the year, after taxation, amounted to £263,275 (2022 - £323,335).
During the year, dividends of £Nil (2022 - £3,472,750) were paid.
The directors who served during the year were:
B S Ackers (resigned 10 May 2024)
|
|
|
|
|
|
|
|
|
|
|
C J Sykes (appointed 1 July 2023)
|
|
|
W G Acton (resigned 18 July 2023)
|
Management has developed a five year strategic plan to continue to grow and develop the business. The core strategy remains around recruiting and retaining a skilled team to deliver the high levels of customer service our customers are accustomed to, whilst expanding the product offering to allow further growth of market share in the contract and specification divisions.
Qualifying third party indemnity provisions
|
The Company has granted an indemnity to one or more of its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors' Report.
Disclosure of information to auditor
|
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
|
There are no post balance sheet events.
|
|
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditor, CLA Evelyn Partners Limited, 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.
|
|
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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.
|
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC
Opinion
We have audited the financial statements of Lecico PLC (the 'Company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
|
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
|
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
|
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the 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.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 6, 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.
|
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the Company’s legal and regulatory framework through enquiry of management of their understanding of the relevant laws and regulations, the company’s policies and procedures regarding compliance and how they identify, evaluate and rectify any instances of non-compliance. We also drew on our existing understanding of the Company’s industry and regulation.
We understand the Company complies with requirements of the framework through:
∙The directors’ close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly; and
∙The engagement of external experts to ensure ongoing tax compliance and to assist with the preparation of the statutory accounts.
In the context of the audit, we have considered those laws and regulations which determine the form and content of the financial statements, which are central to the Company’s ability to conduct business and where failure to comply could result in material penalties.
We have identified the following laws and regulations as being of significance in the context of the Company:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to the manipulation of the financial statements through manual journals and incorrect recognition of revenue. This was communicated to the other members of the engagement team who were not present at the discussion.
The procedures carried out to gain evidence in the above areas included:
∙Testing of revenue transactions to underlying documentation, with a particular focus on transactions around the year-end date; and
∙Testing of manual journal entries, selected based on specific risk assessments.
This description forms part of our auditor’s report.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
|
|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LECICO PLC
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.
Stephen Hale (Senior Statutory Auditor)
for and on behalf of
CLA Evelyn Partners Limited
Chartered Accountants
Statutory Auditor
14th Floor
103 Colmore Row
Birmingham
B3 3AG
28 May 2024
|
|
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the financial year
|
|
|
|
There was no other comprehensive income for 2023 (2022 - £Nil).
|
The notes on pages 16 to 31 form part of these financial statements.
|
|
|
|
|
|
LECICO PLC
REGISTERED NUMBER:02088118
|
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
Creditors: amounts falling due after more than one year
|
|
|
|
|
|
Provisions for liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LECICO PLC
REGISTERED NUMBER:02088118
|
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 31 form part of these financial statements.
|
|
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners
|
|
|
|
Shares issued during the year
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Lecico PLC is a public company, limited by shares, domiciled and incorporated in England and Wales (registered number: 02088118). The registered office address is Unit 2D, Viking Industrial Estate, Hudson Road, Bedford, Bedfordshire, MK41 0QB.
2.Accounting policies
|
|
|
Basis of preparation of financial statements
|
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
|
|
|
Financial Reporting Standard 102 - reduced disclosure exemptions
|
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows; and
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Lecico Egypt S.A.E as at 31 December 2023 and these financial statements may be obtained from www.lecicoegypt.com.
The business renewed and increased its banking facilities in 2023 to support its growth plan and ensure it has adequate working capital to meet its liabilities as they fall due. Both revenue and underlying operating profit increased further in 2023 from the already high levels of 2022. The outlook for 2024 is cautious due to a slowdown in the markets that the Company serves, which is expected to last for the first half of the year, with a recovery thereafter.
Based on the above as well as the business plan and forecast for 2024, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence going forward. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
The directors have made an assessment in preparing these financial statements as to whether the Company is a going concern and have concluded that there are no material uncertainties that may cast doubt on the Company's ability to continue as a going concern.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
|
Foreign currency translation
|
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The Company sells a range of bathroom products in the wholesale market. Sale of goods are recognised on delivery to the wholesaler, when the wholesaler has full discretion over the channel and price to sell the product and there is no unfulfilled obligation that could affect the wholesaler's acceptance of the product. Delivery occurs when the goods have been shipped to the location specified by the wholesaler.
Goods sold to wholesalers are often sold with volume rebates and also with the provision for the wholesale customer to return the faulty goods. Sales are measured at the prices specified in the sales contract, net of estimated volume rebates and returns. Volume rebates are assessed based on monthly, quarterly or annual purchases. Accumulated experience is used to estimate and provide for the discounts and returns.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
|
Operating leases: the Company as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Other operating income is the total amount receivable by the Company for government grants and insurance settlements.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
|
Tangible fixed assets (continued)
|
Depreciation 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets under construction
|
|
Not depreciated until available for use
|
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.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument.
Trade and other debtors and creditors are classified as basic financial instruments and measured on initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
|
Financial instruments (continued)
|
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Company’s cash management.
Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the bank, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.
|
|
|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Judgements in applying accounting policies 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 amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The judgements, estimates and assumptions are evaluated at each reporting date and are based on historical experience as adjusted for current market conditions and other factors. Management makes estimates and assumptions concerning the future in preparing the financial statements and the actual results will not always reflect the accounting estimates made.
Dilapidation provision
Management estimate is required in making the assessment of the future cost of dilapidation and restoration works that will be incurred in respect of leased property. Management have estimated the future costs and then performed a present value calculation to determine the provision in the financial statements.
All turnover arose within the United Kingdom and Republic of Ireland and is attributable to the principal activity of the Company.
|
|
|
|
|
The operating profit is stated after charging/(crediting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating lease rentals
|
|
|
|
|
|
|
|
|
|
Amortisation on intangible assets
|
|
|
|
|
Depreciation on tangible assets
|
|
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
During the year, the Company obtained the following services from the Company's auditor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees payable to the Company's auditor for the audit of the Company's financial statements
|
|
|
|
|
Fees payable to the Company's auditor and its associates in respect of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staff costs, including directors' remuneration, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of defined contribution scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including directors, during the year was 59 (2022 - 50).
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
Company contributions to defined contribution pension schemes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the year retirement benefits were accruing to 3 directors (2022 - 3) in respect of defined contribution pension schemes.
|
|
|
The highest paid director received remuneration of £286,616 (2022 - £179,305).
|
|
|
The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £13,000 (2022 - £10,789).
|
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax on profits for the year
|
|
|
|
|
Adjustments in respect of previous periods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
|
Adjustments in respect of prior periods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxation on profit on ordinary activities
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
|
|
Factors affecting tax charge for the year
|
|
|
The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit on ordinary activities before tax
|
|
|
|
|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
|
|
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
|
|
|
Remeasurement of deferred tax for changes in tax rates
|
|
|
|
|
|
|
|
|
|
Adjustments to tax charge in respect of previous periods
|
|
|
|
|
Adjustments to tax charge in respect of previous periods - deferred tax
|
|
|
|
|
Other tax adjustments, reliefs and transfers
|
|
|
|
|
|
|
|
|
|
Total tax charge for the year
|
|
|
|
|
Factors that may affect future tax charges
|
Finance Act 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
Assets under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finished goods and goods for resale
|
|
|
|
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings represent balances which are repayable on demand and incur no interest charge.
|
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan payable within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
|
Other taxation and social security
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings represent trading balances which are repayable on demand and incur no interest charge.
In the prior year financial statements trade balances owed to group companies of £2,211,788 were included within Trade creditors. These have been reclassified to be included within Amounts owed to group undertakings in the comparative information above, which is consistent with the presentation in the current year and is considered more appropriate.
In the year the Company held an import line facility with a maximum facility of £750,000. Total amount drawn down at the 31 December 2023 is £Nil (2022 - £Nil).
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan payable in more than one year
|
|
|
|
|
|
|
|
|
|
The £100,000 term loan drawn in 2020 is repayable over a 5-year period on a straight-line basis which includes interest of 2.5% per annum.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
|
|
|
The provision for deferred taxation is made up as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed asset timing differences
|
|
|
|
|
Short-term timing differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
|
The provision relates to the expected cost of reinstating the property back to its original condition at the end of the lease term. This provision is the best estimate of these expected future costs.
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,650,000 (2022 - 250,000) Ordinary shares of £1.00 each
|
|
|
|
|
|
|
|
|
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
|
|
1,650,000 (2022 - 150,000) Ordinary shares of £1.00 each
|
|
|
The Ordinary shares entitle the holder to receive notice of, attend and vote at general meeting of the Company and on a poll to note vote for each ordinary share held.
The shares hold preferences or restrictions on the distribution of dividends and the repayment of capital.
The Company increased its share capital by £1,500,000. This is to allow the business to invest in its strategic growth programme within the UK. The strengthening of its net asset position was through the issue of 1,500,000 Ordinary shares of £1.00 each to its parent company, for a total consideration of £1,500,000.
Profit and loss account
This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
The Company operates a defined contribution 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 £100,137 (2022 - £85,616). Contributions totalling £31,635 (2022 - £20,346) were payable to the fund at the reporting date.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Commitments under operating leases
|
|
|
At 31 December the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
|
|
Related party transactions
|
|
|
The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
All directors and certain senior employees who have authority and responsibility for planning, directing, and controlling activities of the Company are considered to be key management personnel. Total remuneration (including employers national insurance) in respect of these individuals was £822,291 (2022 - £558,513).
|
|
|
Post balance sheet events
|
There are no post balance sheet events.
|
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The immediate parent undertaking is Lecico (UK) Limited, a company registered in England and Wales.
The ultimate parent undertaking is Lecico Egypt S.A.E., a company registered in Egypt.
The largest and smallest group of undertakings for which group accounts for the year ended 31 December 2023 have been drawn up, is that headed by Lecico Egypt S.A.E.. The registered office address of Lecico Egypt S.A.E. is LECICO EGYPT S.A.E P.O. BOX 358, ALEXANDRIA, EGYPT. Copies of the group accounts are available from www.lecicoegypt.com.
There is no ultimate controlling party.
|
