Company registration number:
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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 26 DECEMBER 2021
The directors present the Strategic Report for the period ended 26 December 2021.
The Group continued its existing strategy of identifying and investing in new stores where there is potential for growth, to supplement its current sites.
There continued to be a strategy of identifying and investing in new stores, and whilst no new stores were opened in the period, a new store in Bracknell expected to be opened shortly. Revenue grew by 7.7% to £64.8m (2020 - £60.2m) and gross margins remained largely consistent at 37.0% (2020 - 35.3%), resulting in an increased profit before tax of £12.1m (2020 - £10.3m).
The Group continuously reviews risks and uncertainties.
A key challenge to the business remains the recent growth in aggregators within the marketplace, offering discounted introductions and driving customer traffic away from traditional take away sites. The Group continues to be subject to variable wholesale food prices, which are anticipated to continue in the medium term. It is working closely to manage these costs and related supply chain issues, activity switching to UK based suppliers where feasible. There remains the threat of higher gas prices, which is a global issue, although the majority of sites are currently fixed until 2026. In the previous year the Group implemented Contact Free Delivery process, whilst this is no longer appropriate, the Group has retained its cash-less approach. As the Group continues to grow and open new sites – there are increased resourcing challenges for both store staff and delivery drivers.
Retaining market share continues to be the key KPI – and this is tracked by growth in revenue, by individual site and region.
The Group is committed to ensuring the highest standards and regularly monitors customer feedback and where arising customer complaints are tracked and appropriately followed up. A key challenge to the business remains the recent growth in aggregators within the marketplace, offering discounted introductions and driving customer traffic away from traditional take away sites.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 26 DECEMBER 2021
We can confirm that at all times the directors of the Group have operated for the benefit of its members as a whole and in line with s172(1) Companies Act 2006. Considering the long term consequences of their decisions, the interest of its employees, fostering good relationships with both customers and suppliers; ensuring that the business has a positive impact on the local community and environment, retaining a reputation for the high standards of business conduct and acting fairly between members.
This report was approved by the board
and signed on its behalf.
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DIRECTORS' REPORT
FOR THE PERIOD ENDED 26 DECEMBER 2021
The Directors present their report and the financial statements for the period ended 26 December 2021.
The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
∙
select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the period, after taxation, amounted to £
9,568,250
(2020 -
£
8,242,713
)
.
A final dividend for 2020 of £2,000,000 plus an interim dividend for 2021 of £2,500,000 were paid during the financial year. A final dividend has been proposed and paid on 20 May 2022 of £2,500,000 (2020: £2,000,000).
The Directors who served during the period were:
The overall business outlook remains positive; the directors are experienced in the takeaway business and are well aware of the challenges that require consistently applied, high quality procedures to minimise risks. The Group continues to invest in its operations and maintains high standards in product quality and staff training.
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DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 26 DECEMBER 2021
The Group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Group's performance. There is no employee share scheme at present.
The Group has a close working relationship with the main Franchiser and principal supplier, regularly meeting to discuss industry challenges, local promotion deals and new site opportunities. The Group regularly obtains feedback from customers and actively makes changes, where it makes sense and is consistent with the Franchise brand.
In accordance with the requirements of The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018 the Directors would like to disclose the following information for the period ended 26 December 2021.
Intensity Metric
Scope 1, 2 and 3 emission/ sales revenue amounts to £0.30 tonnes CO2/£m (2020 - £0.33 tonnes CO2/£m).
Methodologies used within the calculation
The Group has used the actual KWH data from the monthly invoices it receives and then applied the “Government conversion factors for Group reporting” to calculate the CO2e content.
Energy efficient action taken this year
The Warehouse electricity costs are predominantly related to electrical light usage. During the year all lighting was replaced with energy saving LED lighting that will not only reduce operating costs but also extend the useful life of the lights.
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DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 26 DECEMBER 2021
The Group has chosen in accordance with the Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out within the Group's Strategic Report and the Company's Strategic Report Information required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review, principal risks and uncertainties and future developments sections. Additionally, the Group has explained within the Strategic Report how they maintain business relationships with customers and suppliers, including their policy on payment of creditors, and how they ensure consistent and productive engagement with employees and disabled persons.
There have been no significant events affecting the Group since the year end.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FULL HOUSE RESTAURANTS HOLDINGS LIMITED
We have audited the financial statements of Full House Restaurants Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 26 December 2021, which comprise the Group Statement of Income and Retained Earnings, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent 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 Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FULL HOUSE RESTAURANTS HOLDINGS LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FULL HOUSE RESTAURANTS HOLDINGS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group 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:
∙
The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including UK Companies Act, employment law, tax legislation and CE certification of products. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
∙
We understood how the Group is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the Group secretary.
∙
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙
We assessed the susceptibility of the Group's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
°
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; and
°
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
°
Posting of unusual journals, and;
°
Risk of fictitious employees.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FULL HOUSE RESTAURANTS HOLDINGS LIMITED (CONTINUED)
This report is made solely to the Group's shareholders, 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 Group's shareholders those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group and the Company's shareholders, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Centrum House
36 Station Road
Surrey
TW20 9LF
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CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
26 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 15 to 36 form part of these financial statements.
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
26 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 15 to 36 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
Full House Restaurants Holdings Limited (registered number: 08895755) is a private Company limited by shares, domiciled and incorporated in England and Wales. The registered office is Centrum House, 36 Station Road, Egham, Surrey, TW20 9LF. The principal place of business is Unit 5, The Forum, Hanworth Lane, Chertsey, Surrey, KT16 9JX.
The Group consists of Full House Restaurants Holdings Limited ("the Company") and all of its subsidiaries. The Group manages and operates pizza delivery franchises in England.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Income and Retained Earnings in these financial statements.
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2014.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.
Accounting policies (continued)
Grants of a revenue nature are recognised in the Consolidated Statement of Income and Retained Earnings in the same period as the related expenditure.
Goodwill
Other intangible assets
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.
Franchise rights - 10 years straight line
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.
Accounting policies (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:
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.
The depreciable value of the freehold and leasehold property is £nil because the estimated amount that the entity would expect to obtain from the disposal of the assets, if the properties were already of the age and in the condition expected at the end of its useful economic life, is in excess of the current carrying value. As such no depreciation charge is included within the financial statements.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.
Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Useful economic life of fixed assets.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
Page 20
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
12.
Taxation (continued)
The future tax rate is expected to increase to 25% from 1 April 2023. A marginal relief is available if profits fall below
£250,000, apportioned across the group, to reduce the rate of tax applied with the lowest boundary being 19%.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
On 20 May 2022 the Directors propose a dividend of £2,500,000.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
Page 26
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
15.
Tangible fixed assets (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
23.
Deferred taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
Merger Reserve
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
A prior period adjustment has been made to recategorize certain receipts and payments clearing the bank shortly after the year end within the Statement of Financial Position. These transactions were previously treated as uncleared bank items. The effect of the prior period adjustment as follows:
Company
There has been no effect on the profit for the period of net assets at that date.
Group
There has been no effect on the profit for the period of net assets.
The opening cash at bank for the comparative period within the consolidated cashflow statement has also been adjusted by £1,144,995 with adjustments made in the debtors and creditor movements to reflect the change of this timing difference.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
At the period end the group owed the Franchiser and 49% shareholder, Dominos Pizza UK & Ireland Limited, £982,474 (2020 - as restated: £1,046,972) in relation to trading activities. The total amount paid to Dominos Pizza UK & Ireland Limited and its fellow group entity, DP Realty Limited, in relation to trading activities was £24,019,997 (2020: £22,395,553). Trading activities are comprised of the following: cost of sales, rent and service charges, advertising, administration costs and store development costs.
Historically House Special Limited entered into a deferred payment agreement with DP Realty Limited, a fellow related company through Dominos Pizza UK & Ireland Limited. The agreements related to funding of lease premium for 2 new store premises. The applicable interest rates are 0% and 3% per annum above the GBP 3 months LIBOR on 28 April 2016 and the loans are repayable monthly over 10 years. The total amount owing at the period end in total was £137,520 of which £24,500 is due within 1 year. These loans are shown within 'other loans'. Dividends were paid by this company to Dominos Pizza UK & Ireland Limited in the year, amounting to £2,205,000 (2020: £1,592,500). At 27 December 2020 B Shedden owed the Company £24,524. During the year further advances were made of £496,800, repayments of £451,695 and interest of £81. At 26 December 2021 £69,547 was owed to the Company. At 27 December 2020 J Shedden owed the Company £545,529. During the year further advances were made of £1,845,000 and repayments of £1,908,343. At 26 December 2021 £482,186 was owed to the Company.
The Group was under the control of J Shedden and B Shedden throughout the year.
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