Company registration number 02710556 (England and Wales)
CASELLA FAMILY BRANDS (EUROPE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
CASELLA FAMILY BRANDS (EUROPE) LIMITED
COMPANY INFORMATION
Directors
G M Casella
S D Lawson
Company number
02710556
Registered office
The Stores
Officers' Mess
Royston Road
Duxford
Cambridgeshire
CB22 4QH
Auditors
Harwood Hutton
22 Wycombe End
Beaconsfield
Buckinghamshire
HP9 1NB
Bankers
Santander UK plc
Bridle Road
Bootle
Merseyside
L30 4GB
CASELLA FAMILY BRANDS (EUROPE) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 19
CASELLA FAMILY BRANDS (EUROPE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2022
- 1 -
The directors present the strategic report for the year ended 30 June 2022.
Fair review of the business
In the year ended 30th June 2022, total sales volumes declined by 8.1% and revenue fell by 8.3%.
Year-on-year off trade sales demand decreased as COVID restrictions were unwound in the UK and across Europe. Against this backdrop, [yellow tail] outperformed the market and continued to gain share. The business sustained investment in its brands, running two major [yellow tail] TV bursts and upweighting spend on social media campaigns.
Full year margin fell as a result of increased sea freight costs (driven by fuel costs and vessel availability) and substantial demurrage charges (incurred due to UK port and rail freight congestion). The industry has generally faced additional costs and disruption caused by Brexit, COVID and the Ukraine
war
among other headwinds
.
Principal risks and uncertainties
The main risks the company is exposed to are as follows:
Exchange rate: whilst the company has agreed medium term pricing in GBP for virtually all supplies of wine and services, in the longer term the fluctuation of currencies – and in particular the movement of US and Australian dollars against GBP – remains a financial risk to the company in that suppliers might potentially increase the underlying cost of key supplies to reflect those exchange rate movements.
Vessel availability/reliability: The COVID pandemic has caused imbalances in global trade flows and a shortage of containers. Compounding this, late vessel arrivals adversely impact production schedules and result in unplanned demurrage costs. The risk is that costs continue at the current elevated levels – or higher – and that the business will face further disruption and demurrage.
Credit risk: the company constantly monitors the credit worthiness of each of its customers in the UK and Europe, and overdue debt is a key performance measure monitored by the Executive and Sales teams, with any overdue debts actively managed by the Sales and Finance teams. In the year ended 30th June 2022 the company recorded no bad debts.
Costs: Gas prices increased to record levels after Russia’s invasion of Ukraine and the subsequent cuts in Russian supply. Electricity has followed a similar trend. Increasing energy costs directly and indirectly adversely impact costs of production (notably glass and filling costs) and distribution (sea freight and road transportation). The risk is that energy prices remain high and potentially volatile. In addition to the above, the business anticipates increased costs related to waste management and Extended Producer Responsibility (EPR) legislation.
Brexit: There is still some uncertainty concerning post-Brexit rules and regulations, such as labelling requirements.
Future plans
In the light of the ongoing cost increases we have absorbed – and in order to maintain a sustainable, profitable business – we intend to pass on a cost price increase to our customers in the financial year ending 30
th
June 2023. This will allow us to continue to invest in our brands and maintain our market position and, as such, we do not anticipate suffering substantial volume loss as a result of higher prices.
Our enduring purpose is to bring vibrancy and prosperity to the wine industry through long-term thinking. We will continue to focus on driving Brand Equity & Consumer Engagement and our intention is to maintain the current levels of marketing spend.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 2 -
Promoting the success of the company
The board of directors of Casella Family Brand (Europe) Limited consider, both individually and together, that they have acted in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172 (1) (a-f) of the Act) in the decisions taken during the year ended 30 June 2022.
The Directors of CFBE and the Executive team agree the company’s long-term strategy and annual plans and ensure execution is measured quantitatively and qualitatively with decisions and course correction made in the long-term interests and prosperity of the business and its wider community and partners.
In addition to brand and market investment, employee happiness and engagement is at the heart of the company’s success and helps drive the increasing breadth and depth of relationship with key customers and suppliers. The growing reputation of the company is measured through external surveys, e.g. Advantage Group.
The company works closely with its key production and logistics suppliers to minimise environmental impact and plays an important role in the wider industry community by supporting key institutions like the Wine & Spirit Education Trust and the Drinks Trust.
G M Casella
Director
23 February 2023
CASELLA FAMILY BRANDS (EUROPE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2022.
Principal activities
The principal activity of the company continued to be that of
wine distribution in the United Kingdom and Europe.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G M Casella
S D Lawson
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £5,000,000. The directors do not recommend payment of a final dividend.
Auditor
The auditor, Harwood Hutton, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
Energy and carbon report
The company
itself has consumed less than 40,000kWh in the UK and the bulk of its operations are outsourced
,
which makes it impractical to obtain this information. Therefore the company has
not disclos
ed
its
emissions and energy
consumption.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 4 -
On behalf of the board
G M Casella
Director
23 February 2023
CASELLA FAMILY BRANDS (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CASELLA FAMILY BRANDS (EUROPE) LIMITED
- 5 -
Opinion
We have audited the financial statements of Casella Family Brands (Europe) Limited (the 'company') for the year ended 30 June 2022 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2022 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASELLA FAMILY BRANDS (EUROPE) LIMITED
- 6 -
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 identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 are to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
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
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
-
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
-
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
-
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 the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and intellectual property legislation;
-
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
-
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
-
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
-
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
-
understanding the design of the company’s remuneration policies.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASELLA FAMILY BRANDS (EUROPE) LIMITED
- 7 -
To address the risk of fraud through management bias and override of controls, we:
-
performed analytical procedures to identify any unusual or unexpected relationships;
-
tested journal entries to identify unusual transactions;
-
reviewed management and post-year end information;
-
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
-
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
-
agreeing financial statement disclosures to underlying supporting documentation;
-
enquiring of management as to actual and potential litigation and claims; and
-
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Margaret El Khalidi
Senior Statutory Auditor
For and on behalf of Harwood Hutton
27 February 2023
Chartered Accountants
Statutory Auditor
22 Wycombe End
Beaconsfield
Buckinghamshire
HP9 1NB
CASELLA FAMILY BRANDS (EUROPE) LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 JUNE 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
80,296,669
87,532,257
Cost of sales
(66,680,221)
(71,428,676)
Gross profit
13,616,448
16,103,581
Administrative expenses
(7,197,279)
(7,267,270)
Other operating income
21,130
4,101
Operating profit
4
6,440,299
8,840,412
Interest receivable and similar income
8
7,836
5,638
Interest payable and similar expenses
9
(322,238)
(240,327)
Profit before taxation
6,125,897
8,605,723
Tax on profit
10
(1,180,878)
(1,635,823)
Profit for the financial year
4,945,019
6,969,900
Retained earnings brought forward
16,441,309
14,471,409
Dividends
11
(5,000,000)
(5,000,000)
Retained earnings carried forward
16,386,328
16,441,309
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
BALANCE SHEET
AS AT 30 JUNE 2022
30 June 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
22,145
15,565
Current assets
Stocks
13
18,544,995
20,620,462
Debtors
14
15,916,422
18,289,719
Cash at bank and in hand
9,761,993
9,155,929
44,223,410
48,066,110
Creditors: amounts falling due within one year
15
(21,543,167)
(22,166,506)
Net current assets
22,680,243
25,899,604
Total assets less current liabilities
22,702,388
25,915,169
Creditors: amounts falling due after more than one year
16
(6,316,050)
(9,473,850)
Net assets
16,386,338
16,441,319
Capital and reserves
Called up share capital
19
10
10
Profit and loss reserves
16,386,328
16,441,309
Total equity
16,386,338
16,441,319
The financial statements were approved by the board of directors and authorised for issue on 23 February 2023 and are signed on its behalf by:
G M Casella
Director
Company Registration No. 02710556
CASELLA FAMILY BRANDS (EUROPE) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
- 10 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
10,588,254
9,411,150
Interest paid
(322,238)
(240,327)
Income taxes paid
(1,493,469)
(1,526,705)
Net cash inflow from operating activities
8,772,547
7,644,118
Investing activities
Purchase of tangible fixed assets
(17,511)
(12,046)
Interest received
7,836
5,638
Net cash used in investing activities
(9,675)
(6,408)
Financing activities
Proceeds from new bank loans
5,000,000
Repayment of bank loans
(3,157,800)
(2,368,350)
Dividends paid
(5,000,000)
(5,000,000)
Net cash used in financing activities
(8,157,800)
(2,368,350)
Net increase in cash and cash equivalents
605,072
5,269,360
Cash and cash equivalents at beginning of year
9,155,929
3,886,569
Cash and cash equivalents at end of year
9,761,001
9,155,929
Relating to:
Cash at bank and in hand
9,761,993
9,155,929
Bank overdrafts included in creditors payable within one year
(992)
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
- 11 -
1
Accounting policies
Company information
Casella Family Brands (Europe) Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
The Stores, Officers' Mess, Royston Road, Duxford, Cambridgeshire, CB22 4QH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are
presented
in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover
is measured at the fair value of the consideration received or receivable for the sale of goods in the normal course of business, and is shown net of discounts and VAT.
Sale of goods
Revenue arises from the sale of bottled wine.
Revenue is recognised when the customer accepts delivery of the goods.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
20% - 25% straight line
Computer equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 12 -
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ”Basic Financial Instruments” to all of its financial instruments.
Financial instruments are recognised in the company’s balance sheet when the company becomes party to the contractual provisions of the instrument.
Basic financial assets
Short term debtors are measured at transaction price less any provision for impairment. Loans receivable are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method, less any provision for impairment.
Basic financial liabilities
Short term creditors are measured at transaction price. Other financial liabilities, including bank loans and other loans, are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method.
1.8
Taxation
The tax expense represents the sum of the tax currently payable
.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 13 -
1.11
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.12
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
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 amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Provisions for customer discounts and rebates
Sales to customers are often made with associated trade discounts and rebates, therefore revenue is recorded net of any such discounts. The provision for discounts and rebates is calculated based on the level of sales over the duration of customer contracts/agreements and assessments of management, using historical performance as a guide. Discounts and rebates are recognised when sales levels meet pre-agreed milestones, or based on anticipated depletions and future performance of promotions.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
70,521,446
75,203,003
Rest of Europe
9,775,223
12,329,254
80,296,669
87,532,257
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 14 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Exchange losses
7,080
157,206
Depreciation of owned tangible fixed assets
10,931
12,492
Operating lease charges
78,677
69,764
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
31,000
29,900
For other services
Taxation compliance services
11,750
2,100
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
General management
2
2
Sales
7
7
Marketing
6
4
Finance
4
3
Operations
6
5
Europe
1
1
Total
26
22
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,653,843
2,361,844
Social security costs
280,862
237,102
Pension costs
236,622
208,783
3,171,327
2,807,729
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 15 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
275,378
271,344
Company pension contributions to defined contribution schemes
21,691
275,378
293,035
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2021 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
£
Remuneration for qualifying services
275,378
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
7,836
5,638
9
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
322,238
240,327
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
1,180,878
1,635,823
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
10
Taxation
(Continued)
- 16 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
6,125,897
8,605,723
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
1,163,920
1,635,087
Tax effect of expenses that are not deductible in determining taxable profit
22,588
651
Double tax relief
(4,746)
Permanent capital allowances in excess of depreciation
(884)
85
Taxation charge for the year
1,180,878
1,635,823
An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was substantively enacted on 24 May 2021. This will increase the company's future tax charge accordingly, although the extent of this effect cannot currently be quantified with any degree of certainty.
11
Dividends
2022
2021
£
£
Interim paid
5,000,000
5,000,000
12
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 July 2021
27,202
98,201
125,403
Additions
6,334
11,177
17,511
At 30 June 2022
33,536
109,378
142,914
Depreciation and impairment
At 1 July 2021
19,013
90,825
109,838
Depreciation charged in the year
3,569
7,362
10,931
At 30 June 2022
22,582
98,187
120,769
Carrying amount
At 30 June 2022
10,954
11,191
22,145
At 30 June 2021
8,189
7,376
15,565
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 17 -
13
Stocks
2022
2021
£
£
Goods in transit
7,281,927
10,818,791
Finished goods and goods for resale
11,263,068
9,801,671
18,544,995
20,620,462
14
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
15,585,155
18,028,767
Other debtors
76,945
4,216
Prepayments and accrued income
254,322
256,736
15,916,422
18,289,719
15
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
17
3,158,792
3,157,800
Trade creditors
10,571,306
9,500,862
Corporation tax
503,232
815,823
Other taxation and social security
594,948
1,102,587
Other creditors
5,360,800
6,065,980
Accruals and deferred income
1,354,089
1,523,454
21,543,167
22,166,506
16
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
17
6,316,050
9,473,850
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 18 -
17
Loans and overdrafts
2022
2021
£
£
Bank loans
9,473,850
12,631,650
Bank overdrafts
992
9,474,842
12,631,650
Payable within one year
3,158,792
3,157,800
Payable after one year
6,316,050
9,473,850
Bank loans are secured by fixed charges over the company's assets.
18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
236,622
208,783
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10
10
10
10
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
42,164
42,164
Between two and five years
115,951
158,115
158,115
200,279
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 19 -
21
Related party transactions
During the year the company entered into the following transactions with Casella Wines Pty Limited, a company which
is
under common control:
Purchase of goods: £39,130,756 (2021: £48,941,832).
At the balance sheet date, the company owed £9,554,581 (2021: £11,867,025) to Casella Wines Pty Limited, which is included within creditors due within one year.
22
Ultimate controlling party
The immediate parent company is Casella Family Brands (Europe) Pty Limited and the ultimate parent company is JMCTT Pty Limited. Both companies are registered in Australia.
23
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
4,945,019
6,969,900
Adjustments for:
Taxation charged
1,180,878
1,635,823
Finance costs
322,238
240,327
Investment income
(7,836)
(5,638)
Depreciation and impairment of tangible fixed assets
10,931
12,492
Movements in working capital:
Decrease/(increase) in stocks
2,075,467
(3,059,117)
Decrease in debtors
2,373,297
1,671,108
(Decrease)/increase in creditors
(311,740)
1,946,255
Cash generated from operations
10,588,254
9,411,150
24
Analysis of changes in net funds/(debt)
1 July 2021
Cash flows
30 June 2022
£
£
£
Cash at bank and in hand
9,155,929
606,064
9,761,993
Bank overdrafts
(992)
(992)
9,155,929
605,072
9,761,001
Borrowings excluding overdrafts
(12,631,650)
3,157,800
(9,473,850)
(3,475,721)
3,762,872
287,151
2022-06-30
2021-07-01
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