Bayley & Sage Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 02283314 (England and Wales)

Strategic Report, Report of the Director and

Financial Statements for the Period 1 November 2019 to 31 July 2020

for

Bayley & Sage Ltd

Page

Company Information

1

Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

5

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Cash Flow Statement

10

Notes to the Cash Flow Statement

11

Notes to the Financial Statements

12

DIRECTOR:

Ms J M Allen

REGISTERED OFFICE:

60 High Street

Wimbledon Village

London

SW19 5EE

REGISTERED NUMBER:

02283314 (England and Wales)

AUDITORS:

Thornton Springer LLP

Chartered Accountants and

Statutory Auditor

67 Westow Street

Upper Norwood

London

SE19 3RW

Bayley & Sage Ltd is an independent premium fresh food retailer operating 9 stores in the South West and West region of London. With 24 years of experience in the sector, we consider ourselves expert at identifying suitable village style high street sites in selected areas of London to develop for the Bayley & Sage concept. By offering a unique shopping experience which focuses on excellent customer service and an unprecedented 80% fresh food proposition unparalleled in the sector we are well received and quickly supported by our local residents.

REVIEW OF BUSINESS

Strategic Review

Covid-19 pandemic and the finality of Brexit added extraordinary challenges to what is already recognised as a highly competitive sector. Whilst we recognise the Pandemic has fundamentally changed shopping habits and we continue to navigate the challenges of post brexit; delays at borders, increased custom procedures, longer lead time requirements, we continue to be very optimistic for the future.

Bayley & Sage follows a traditional bricks and mortar business model and remains committed to looking after customers where food trends, a demand for a higher quality food product, a desire to understand provenance and appreciation of great customer service continues to be a popular activity. We work closely with all our stakeholders to avoid unnecessary spillage or wastage and by providing an excellent balance of traditional ranges, innovating to offer something new and our ability to adapt quickly to changes in the market, we are confident that our position in the sector is secure. We have an enviable reputation and continue to build a solid platform for continued growth.

Financial Review

2020 was an exceptional year for the business where turnover grew by 24% and net profit increased from 7.12% to 17.02%. Being allowed to stay open during the whole period is the main contributory factor for the success. We recognise we were fortunate and are determined to re-invest the support and goodwill, back in the business by creating opportunities for our team, allocating more resource to departments, attending to the estate with a decorations, plant and machinery upgrade schedule, expanding the fleet, investing in R&D to assist the business and our continuation to work on own label projects to strengthen the brand.

We continue and improve the benefits package to qualifying members as we recognise how important our team is to the success of Bayley & Sage. This already includes private health insurance, and a second holiday home was recently added. Base rates for 80% of our staff were increased and we have made it a goal of 2021 to improve even more. We also recognised the need to support our local communities during such an unprecedented year by offering financial contributions, equipment and food packages to organisations and charities close to our hearts.

We operate various policies to minimise the social and environmental impact of the company's activities and continue to seek ways to effectively segregate waste and minimise single use plastic. We offer customer incentives to return glass or re-use bags, we work closely with local charities to collect food waste for the homeless and we support local communities with their initiatives with our time and sharing our resources. We are currently in process to add our first electric vehicle to our fleet.

The team's ability to navigate the Gov.uk and NHS guideline during such an precedented period of history, ensuring both customer and staff remained safe is testament to how versatile and agile the team really is. The Board would like to thank the staff for their hard work and recognise the effort that has gone into the changes and adapting to 2020.

PRINCIPAL RISKS AND UNCERTAINTIES

In the normal course of business the company will be exposed to the following principal risks and uncertainties:

Credit, Liquidity and Interest Rate Risk

Bayley & Sage Ltd considers all three risk areas as low as we do not have any borrowings and cash reserves in the bank are high. The company's income is driven from customer cash or credit card transactions made at point of contact and we do not offer credit accounts to customers. Bayley & Sage manages the business through the cashflow, we produce an annual cashflow which is monitored and updated regularly.

Political Risk

At the time of writing this report, the country is about to ease out of a year-long state of uncertainty, and life post brexit. The pandemic presented Bayley & Sage with a very unique opportunity as we were allowed to remain open throughout because of our status as a food business. We demonstrated very quickly our ability to understand the government guidelines, implement safe-guarding measures and manage a very fragile supply chain. By removing from display all loose unwrapped items, marking out safe distance, controlling numbers of customers into the stores, implementing stringent cleaning procedures, providing relevant PPE, stopping all cash payments and ensuring good availability of product, our staff felt safe to come to work and customers felt reassured and supported the business throughout.

We continue to monitor life post brexit and feel more confident as we get used to navigating the requirements, working closely with our European partners at the same time discovering local routes for product and aim to effectively use our Central Production Kitchen and Distribution Centre to service the estate. We understand the challenge ahead navigating the pending 'Natasha's Law' and the impact this will have on the business but feel confident we are well positioned to adapt to any change in climate.

ON BEHALF OF THE BOARD:

Ms J M Allen - Director

16 April 2021

The director presents her report with the financial statements of the company for the period 1 November 2019 to 31 July 2020.

DIVIDENDS

An interim dividend of 105.52 per share was paid on 30 March 2020. The director recommends that no final dividend be paid.

The total distribution of dividends for the period ended 31 July 2020 will be £ 65,000 .

DIRECTOR

Ms J M Allen held office during the whole of the period from 1 November 2019 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is 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 director is 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 director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Thornton Springer LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Ms J M Allen - Director

16 April 2021

Opinion

We have audited the financial statements of Bayley & Sage Ltd (the 'company') for the period ended 31 July 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 July 2020 and of its profit for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.

Nigel F Springer (Senior Statutory Auditor)

for and on behalf of Thornton Springer LLP

Chartered Accountants and

Statutory Auditor

67 Westow Street

Upper Norwood

London

SE19 3RW

16 April 2021

TURNOVER

4

14,992,783

12,075,546

Cost of sales

(8,493,023

)

(6,862,084

)

GROSS PROFIT

6,499,760

5,213,462

Administrative expenses

(4,076,852

)

(4,355,158

)

2,422,908

858,304

Other operating income

125,000

-

OPERATING PROFIT

6

2,547,908

858,304

Interest receivable and similar income

3,360

1,963

2,551,268

860,267

Interest payable and similar expenses

7

-

(317

)

PROFIT BEFORE TAXATION

2,551,268

859,950

Tax on profit

8

(495,032

)

(181,383

)

PROFIT FOR THE FINANCIAL PERIOD

2,056,236

678,567

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

2,056,236

678,567

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

767,920

652,023

767,920

652,023

CURRENT ASSETS

Stocks

12

487,840

403,319

Debtors

13

242,864

318,102

Cash at bank and in hand

3,663,536

1,133,080

4,394,240

1,854,501

CREDITORS

Amounts falling due within one year

14

(1,800,923

)

(1,169,312

)

NET CURRENT ASSETS

2,593,317

685,189

TOTAL ASSETS LESS CURRENT LIABILITIES

3,361,237

1,337,212

PROVISIONS FOR LIABILITIES

16

(134,000

)

(101,211

)

NET ASSETS

3,227,237

1,236,001

CAPITAL AND RESERVES

Called up share capital

17

616

616

Share premium

18

69,484

69,484

Retained earnings

18

3,157,137

1,165,901

SHAREHOLDERS' FUNDS

3,227,237

1,236,001

The financial statements were approved by the director and authorised for issue on 16 April 2021 and were signed by:

Ms J M Allen - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 November 2018

616

610,334

69,484

680,434

Changes in equity

Dividends

-

(123,000

)

-

(123,000

)

Total comprehensive income

-

678,567

-

678,567

Balance at 31 October 2019

616

1,165,901

69,484

1,236,001

Changes in equity

Dividends

-

(65,000

)

-

(65,000

)

Total comprehensive income

-

2,056,236

-

2,056,236

Balance at 31 July 2020

616

3,157,137

69,484

3,227,237

Cash flows from operating activities

Cash generated from operations

1

3,069,813

1,018,981

Interest paid

-

(317

)

Tax paid

(170,686

)

(60,775

)

Net cash from operating activities

2,899,127

957,889

Cash flows from investing activities

Purchase of tangible fixed assets

(324,803

)

(230,831

)

Sale of tangible fixed assets

17,772

7,574

Interest received

3,360

1,963

Net cash from investing activities

(303,671

)

(221,294

)

Cash flows from financing activities

Equity dividends paid

(65,000

)

(123,000

)

Net cash from financing activities

(65,000

)

(123,000

)

Increase in cash and cash equivalents

2,530,456

613,595

Cash and cash equivalents at beginning of period

2

1,133,080

519,485

Cash and cash equivalents at end of period

2

3,663,536

1,133,080

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Profit before taxation

2,551,268

859,950

Depreciation charges

193,323

214,886

Profit on disposal of fixed assets

(2,189

)

(4,928

)

Finance costs

-

317

Finance income

(3,360

)

(1,963

)

2,739,042

1,068,262

Increase in stocks

(84,521

)

(81,459

)

Decrease/(increase) in trade and other debtors

100,354

(21,104

)

Increase in trade and other creditors

314,938

53,282

Cash generated from operations

3,069,813

1,018,981

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 31 July 2020

31.7.20

1.11.19

£

£

Cash and cash equivalents

3,663,536

1,133,080

Year ended 31 October 2019

31.10.19

1.11.18

£

£

Cash and cash equivalents

1,133,080

519,485

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.11.19

Cash flow

At 31.7.20

£

£

£

Net cash

Cash at bank and in hand

1,133,080

2,530,456

3,663,536

1,133,080

2,530,456

3,663,536

Total

1,133,080

2,530,456

3,663,536

1.	STATUTORY INFORMATION

Bayley & Sage Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the recognition of certain financial assets and liabilities measured at fair value.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the balance sheet date and the amounts reported for revenue and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

Depreciation of tangible fixed assets

Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives. The selection of these residual values and estimated lives requires the exercise of management judgement.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2015, is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

over the period of the lease

Plant and machinery

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Stocks

Stocks are stated at the lower of costs and estimated selling price less costs to complete and sell. Cost is determined using the first in, first out method.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

The company has chosen to adopt sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other debtors, cash and bank balances and intra-group balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at cost and amortised cost are assessed for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Income Statement.

For financial assets measured at amortised costs, the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated cash flow discounted at the asset's original effective interest rate.

(ii) Financial liabilities

Basic financial liabilities, including trade and other creditors, bank overdraft, intra-group balances and hire purchase contracts, are initially recognised at transaction price, unless the arrangement constitutes a

financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, and, if applicable, other short-term highly liquid investments with original maturities of three months or less.

4.

TURNOVER

The total turnover of the company has been derived from its principal activity wholly undertaken in the UK.

5.	EMPLOYEES AND DIRECTORS

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Wages and salaries

2,304,889

2,350,000

Social security costs

193,821

190,575

Other pension costs

64,811

64,539

2,563,521

2,605,114

The average number of employees during the period was as follows:

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

Director

1

1

Administration

23

22

Operations

109

89

133

112

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Director's remuneration

9,622

10,193

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Hire of plant and machinery

14,453

14,374

Depreciation - owned assets

193,323

199,887

Profit on disposal of fixed assets

(2,189

)

(4,928

)

Goodwill amortisation

-

15,000

Auditors' remuneration

5,000

5,000

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Interest payable

-

317

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the period was as follows:

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Current tax:

UK corporation tax

462,243

170,686

Deferred tax

32,789

10,697

Tax on profit

495,032

181,383

Reconciliation of total tax charge included in profit and loss

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below:

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Profit before tax

2,551,268

859,950

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

484,741

163,391

Effects of:

Expenses not deductible for tax purposes

2,125

1,830

Income not taxable for tax purposes

(416

)

(936

)

Capital allowances in excess of depreciation

(24,207

)

-

Depreciation in excess of capital allowances

-

6,401

Deferred tax

32,789

10,697

Total tax charge

495,032

181,383

9.

DIVIDENDS

Period

1.11.19

to

Year Ended

31.7.20

31.10.19

£

£

Ordinary shares of £1 each

Interim

65,000

123,000

10.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 November 2019

and 31 July 2020

100,000

AMORTISATION

At 1 November 2019

and 31 July 2020

100,000

NET BOOK VALUE

At 31 July 2020

-

At 31 October 2019

-