Company Registration No. 02710556 (England and Wales)
CASELLA FAMILY BRANDS (EUROPE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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 2021
- 1 -
The directors present the strategic report for the year ended 30 June 2021.
Fair review of the business
In the year ended 30
th
June 2021, total sales volumes grew by 21.1% and revenue grew by 23.0%.
The twin challenges of COVID-19 and Brexit provided significant operational challenges during FY21 but throughout this period of flux we continued to focus on - and invest against - our long-term strategic objectives. The [yellow tail] brand continues to be the engine of growth for the UK business, strongly supported a new TV/online marketing campaign
“find your [yellow tail]”
as well as new listings and net distribution gains across our customer base. UK turnover grew by 24.9%, with double-digit growth seen in every sales channel apart from Travel Retail / Duty Free which was adversely impacted by significantly lower international travel throughout the period.
Supplementing the underlying growth, At Home demand for wine received an additional boost as the On Premise remained closed – or partially closed – due to COVID-19 restrictions. This period also saw an increasing proportion of sales being made online. As the year came to a close these additional gains inevitably receded as those worst affected sectors start to re-emerge. Whist we remain substantially above pre-COVID levels of sales, volumes are now starting to normalise.
Turnover for the Rest of Europe business grew by 12.2%. Our [yellow tail] strategy continues to focus resource on high potential European markets, with Germany, Holland and Ireland all delivering strong levels of growth in the year.
Principal risks and uncertainties
The main risks the company is exposed to are as follows:
Brexit: The UK left the EU on 31
st
December 2020 and CFBE have ensured continued and uninterrupted supply of wine into our European customers since that date. There is still much uncertainty concerning post-Brexit rules and regulations, such as labelling requirements.
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.
COVID-19: The company has mitigated the potential adverse impact of COVID-19 on the business by focussing on continuity of supply through additional stockholding, managing credit risk and safeguarding the health and wellbeing of our employees. Wine production in Australia has not been impacted and our bottling partner in the UK, Encirc, has remained fully operational throughout this period. Operationally, we have kept our customers in stock throughout a period of increased/uncertain COVID demand. Vessel availability/reliability remains an issue and something we are actively monitoring and managing. The global COVID pandemic has caused huge imbalances in global trade flows, which - when coupled with a shortage of containers - has led to ongoing difficulties in obtaining container space on boats. We anticipate that the costs of holding additional stock and the increased cost of sea freight and road haulage to be ongoing features of the landscape throughout the FY22 financial year.
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 30
th
June 2021 the company recorded no bad debts.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 2 -
Development and performance
In FY21, we increased our Marketing spend by 23.2% vs FY20), further strengthening [yellow tail]'s position in the UK marketplace. [yellow tail] now ranks 4th for Brand Awareness in the UK (was 6th this time last year) and is ranked 1st for Brand Affinity, Penetration, Conversion to Purchase and Recommendation. Elsewhere, we focused on building our premium portfolio, notably Peter Lehmann which gained listings in the UK and grew its distribution base in the Rest of Europe.
Supply has kept pace with the overall increased customer demand and we finished the year with a healthy level of stock, within our target range of stock cover, to ensure continuity of supply to all of our customers.
In June, CFBE completed on a further £5m loan facility with Santander UK, enabling us to pay a £5m dividend.
Future plans
Our enduring purpose is to bring vibrancy and prosperity to the wine industry through long-term thinking. It is the intention of the company to maintain Marketing investment levels, continuing to focus on driving Brand Equity & Consumer Engagement. We will ensure our Marketing plans are responding to changing consumer habits and patterns, with a greater focus on Online Customer activation and Social Media.
Looking ahead, we expect sales to flatten in FY22 as COVID restrictions have been unwound in the UK and across Europe. Our plan assumes that we retain the new [yellow tail] customers we have gained, but that the COVID-driven element of our rate-of-sale drops back as things return to normal. Our aim remains to drive sustainable underlying growth underpinned by our significant marketing investment and strong and collaborative customer relationships.
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 2021.
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
18 November 2021
CASELLA FAMILY BRANDS (EUROPE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2021.
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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 2021
- 4 -
On behalf of the board
G M Casella
Director
18 November 2021
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 2021 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 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 30 June 2021 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 and the directors'
r
eport
.
We have nothing to report in respect of the following matters where 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
.
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
.
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.
CASELLA FAMILY BRANDS (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASELLA FAMILY BRANDS (EUROPE) LIMITED
- 7 -
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.
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
19 November 2021
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 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
87,532,257
71,178,221
Cost of sales
(71,428,676)
(57,642,114)
Gross profit
16,103,581
13,536,107
Administrative expenses
(7,267,270)
(6,727,833)
Other operating income
4,101
39,489
Operating profit
4
8,840,412
6,847,763
Interest receivable and similar income
8
5,638
4,749
Interest payable and similar expenses
9
(240,327)
(139)
Profit before taxation
8,605,723
6,852,373
Tax on profit
10
(1,635,823)
(1,304,904)
Profit for the financial year
6,969,900
5,547,469
Retained earnings brought forward
14,471,409
8,923,940
Dividends
11
(5,000,000)
Retained earnings carried forward
16,441,309
14,471,409
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 2021
30 June 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
15,565
16,011
Current assets
Stocks
14
20,620,462
17,561,345
Debtors
15
18,289,719
19,960,827
Cash at bank and in hand
9,155,929
3,886,569
48,066,110
41,408,741
Creditors: amounts falling due within one year
16
(22,166,506)
(19,058,533)
Net current assets
25,899,604
22,350,208
Total assets less current liabilities
25,915,169
22,366,219
Creditors: amounts falling due after more than one year
17
(9,473,850)
(7,894,800)
Net assets
16,441,319
14,471,419
Capital and reserves
Called up share capital
20
10
10
Profit and loss reserves
16,441,309
14,471,409
Total equity
16,441,319
14,471,419
The financial statements were approved by the board of directors and authorised for issue on 18 November 2021 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 2021
- 10 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
24
9,411,150
(7,689,497)
Interest paid
(240,327)
(139)
Income taxes paid
(1,526,705)
(1,082,568)
Net cash inflow/(outflow) from operating activities
7,644,118
(8,772,204)
Investing activities
Purchase of tangible fixed assets
(12,046)
(8,729)
Interest received
5,638
4,749
Net cash used in investing activities
(6,408)
(3,980)
Financing activities
Proceeds of new bank loans
5,000,000
10,000,000
Repayment of bank loans
(2,368,350)
Dividends paid
(5,000,000)
Net cash (used in)/generated from financing activities
(2,368,350)
10,000,000
Net increase in cash and cash equivalents
5,269,360
1,223,816
Cash and cash equivalents at beginning of year
3,886,569
2,662,753
Cash and cash equivalents at end of year
9,155,929
3,886,569
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
- 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 and the rendering of services 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 2021
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 2021
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:
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
75,203,003
60,188,527
Rest of Europe
12,329,254
10,989,694
87,532,257
71,178,221
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 14 -
4
Operating profit
2021
2020
Operating profit for the year is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
157,206
275,338
Depreciation of owned tangible fixed assets
12,492
13,078
Operating lease charges
69,764
66,575
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
29,900
29,340
For other services
Taxation compliance services
2,100
2,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
General management
2
2
Sales
7
6
Marketing
4
4
Finance
3
3
Operations
5
5
Europe
1
1
Total
22
21
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
2,361,844
2,143,201
Social security costs
237,102
228,697
Pension costs
208,783
193,908
2,807,729
2,565,806
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 15 -
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
271,344
38,727
Company pension contributions to defined contribution schemes
21,691
3,651
293,035
42,378
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
£
Remuneration for qualifying services
271,344
Company pension contributions to defined contribution schemes
21,691
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
5,638
4,749
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
5,638
4,749
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
240,327
Other finance costs:
Other interest
139
240,327
139
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
1,635,823
1,304,904
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
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:
2021
2020
£
£
Profit before taxation
8,605,723
6,852,373
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
1,635,087
1,301,951
Tax effect of expenses that are not deductible in determining taxable profit
651
2,126
Permanent capital allowances in excess of depreciation
85
827
Taxation charge for the year
1,635,823
1,304,904
11
Dividends
2021
2020
£
£
Interim paid
5,000,000
12
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 July 2020
18,487
94,870
113,357
Additions
8,715
3,331
12,046
At 30 June 2021
27,202
98,201
125,403
Depreciation and impairment
At 1 July 2020
14,404
82,942
97,346
Depreciation charged in the year
4,609
7,883
12,492
At 30 June 2021
19,013
90,825
109,838
Carrying amount
At 30 June 2021
8,189
7,376
15,565
At 30 June 2020
4,083
11,928
16,011
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 17 -
13
Financial instruments
2021
2020
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
18,032,983
19,754,729
Carrying amount of financial liabilities
Measured at amortised cost
29,721,946
25,483,146
14
Stocks
2021
2020
£
£
Goods in transit
10,818,791
5,648,546
Finished goods and goods for resale
9,801,671
11,912,799
20,620,462
17,561,345
15
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
18,028,767
19,409,472
Other debtors
4,216
345,257
Prepayments and accrued income
256,736
206,098
18,289,719
19,960,827
16
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
18
3,157,800
2,105,200
Trade creditors
9,500,862
9,919,201
Corporation tax
815,823
706,705
Other taxation and social security
1,102,587
763,482
Other creditors
6,065,980
4,146,835
Accruals and deferred income
1,523,454
1,417,110
22,166,506
19,058,533
17
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
18
9,473,850
7,894,800
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 18 -
18
Loans and overdrafts
2021
2020
£
£
Bank loans
12,631,650
10,000,000
Payable within one year
3,157,800
2,105,200
Payable after one year
9,473,850
7,894,800
Bank loans are secured by fixed charges over the company's assets.
19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
208,783
193,908
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.
20
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10
10
10
10
21
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:
2021
2020
£
£
Within one year
42,164
34,517
Between two and five years
158,115
200,279
34,517
CASELLA FAMILY BRANDS (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 19 -
22
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: £48,941,832 (2020: £38,787,268).
At the balance sheet date, the company owed £11,867,025 (2020: £9,219,771) to Casella Wines Pty Limited, which is included within creditors due within one year.
23
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.
24
Cash generated from/(absorbed by) operations
2021
2020
£
£
Profit for the year after tax
6,969,900
5,547,469
Adjustments for:
Taxation charged
1,635,823
1,304,904
Finance costs
240,327
139
Investment income
(5,638)
(4,749)
Depreciation and impairment of tangible fixed assets
12,492
13,078
Movements in working capital:
Increase in stocks
(3,059,117)
(4,018,027)
Decrease/(increase) in debtors
1,671,108
(8,338,642)
Increase/(decrease) in creditors
1,946,255
(2,193,669)
Cash generated from/(absorbed by) operations
9,411,150
(7,689,497)
25
Analysis of changes in net debt
1 July 2020
Cash flows
30 June 2021
£
£
£
Cash at bank and in hand
3,886,569
5,269,360
9,155,929
Borrowings excluding overdrafts
(10,000,000)
(2,631,650)
(12,631,650)
(6,113,431)
2,637,710
(3,475,721)
2021-06-30
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