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Registration number: 04940619

Morgan Construction Wales Limited

REPORT OF THE DIRECTORS and Unaudited Financial Statements

for the Year Ended 31 January 2022

 

Morgan Construction Wales Limited

Contents

Company Information

1

Directors' Report

2 to 3

Accountants' Report

4

Balance Sheet

5 to 6

Notes to the Unaudited Financial Statements

7 to 14

 

Morgan Construction Wales Limited

Company Information

Directors

Mr Paul John Morgan

Mrs Kathryn Mary Morgan

Company secretary

Mrs Kathryn Mary Morgan

Registered office

Tir Drindod, Ground Floor
Alltycnap Road
Johnstown
Carmarthen
SA31 3NE
 

Accountants

Wynne & Co
Chartered Accountants
Forestry House
Brewery Road
Carmarthen
Carmarthenshire
SA31 1TF

 

Morgan Construction Wales Limited

Directors' Report
for the Year Ended 31 January 2022

The directors present their report and the financial statements for the year ended 31 January 2022.

Director of the company

The directors who held office during the year were as follows:

Mr Paul John Morgan

Mrs Kathryn Mary Morgan - Company secretary and director

Principal activity

The principal activity of the company is construction of domestic buildings

Statement of directors responsibilities

The directors acknowledge their responsibilities 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Small companies provision statement

This report has been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

 

Morgan Construction Wales Limited

Directors' Report
for the Year Ended 31 January 2022

Fair review of the business

This narrative has been prepared by the Directors in support of the Financial Statements and to provide an update from the business for the period.

Trading conditions have been very challenging as the effects of further restrictions due to Covid and escalating costs due to demand and more latterly inflation have had a detrimental effect on operations.

Resources across the sector have been particularly stretched and base build costs have risen sharply. Morgan Construction Wales Limited has been working with understanding private and Housing Association Clients to secure additional funding on contracts, however cost escalations have had a negative effect on gross margins for fixed price lump sum contracts.

Despite these pressures projects have continued to be delivered to plan with production and quality continuing to improve. A number of Housing Association schemes have been completed successfully with around 85 homes completed and handed over in the period.

Private developments have been particularly buoyant with house prices in West Wales continuing to rise. This has allowed Morgan Construction Wales Ltd to be paid in line with escalation on development projects, offsetting some of the deterioration in margin on fixed price schemes.

Looking forward the business is focusing on efficiency of operations in lieu of growth, evolving the way we build houses and focusing on the resources needed to deliver the projects in hand. With a pipeline of over 250 houses to deliver over the next 3-4 years the management team are excited about the opportunities despite the challenging period we have been through.

Approved by the Board on 2 August 2022 and signed on its behalf by:

.........................................
Mr Paul John Morgan
Director

 

Chartered Accountants' Report to the Board of Directors
on the Preparation of the Unaudited Statutory Accounts of
Morgan Construction Wales Limited
for the Year Ended 31 January 2022

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the accounts of Morgan Construction Wales Limited for the year ended 31 January 2022 as set out on pages 5 to 14 from the company's accounting records and from information and explanations you have given us.

As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at
http://www.icaew.com/regulation.

This report is made solely to the Board of Directors of Morgan Construction Wales Limited, as a body, in accordance with the terms of our engagement letter. Our work has been undertaken solely to prepare for your approval the accounts of Morgan Construction Wales Limited and state those matters that we have agreed to state to the Board of Directors of Morgan Construction Wales Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Morgan Construction Wales Limited and its Board of Directors as a body for our work or for this report.

It is your duty to ensure that Morgan Construction Wales Limited has kept adequate accounting records and to prepare statutory accounts that give a true and fair view of the assets, liabilities, financial position and profit of Morgan Construction Wales Limited. You consider that Morgan Construction Wales Limited is exempt from the statutory audit requirement for the year.

We have not been instructed to carry out an audit or a review of the accounts of Morgan Construction Wales Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory accounts.

......................................

Wynne & Co
Chartered Accountants
Forestry House
Brewery Road
Carmarthen
Carmarthenshire
SA31 1TF

2 August 2022

 

Morgan Construction Wales Limited

(Registration number: 04940619)
Balance Sheet as at 31 January 2022

Note

31 January
2022
£

31 January
2021
£

Fixed assets

 

Tangible assets

4

1,138,301

1,060,774

Investment property

5

230,000

230,000

 

1,368,301

1,290,774

Current assets

 

Stocks

6

2,345,618

1,838,853

Debtors

7

154,494

831,202

Cash at bank and in hand

 

491,091

355,164

 

2,991,203

3,025,219

Creditors: Amounts falling due within one year

8

(2,577,429)

(2,182,637)

Net current assets

 

413,774

842,582

Total assets less current liabilities

 

1,782,075

2,133,356

Creditors: Amounts falling due after more than one year

8

(669,798)

(976,075)

Provisions for liabilities

(202,336)

(179,400)

Net assets

 

909,941

977,881

Capital and reserves

 

Called up share capital

100

100

Profit and loss account

909,841

977,781

Total equity

 

909,941

977,881

For the financial year ending 31 January 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

 

Morgan Construction Wales Limited

(Registration number: 04940619)
Balance Sheet as at 31 January 2022

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 2 August 2022 and signed on its behalf by:
 

.........................................
Mr Paul John Morgan
Director

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Tir Drindod, Ground Floor
Alltycnap Road
Johnstown
Carmarthen
SA31 3NE

These financial statements were authorised for issue by the Board on 2 August 2022.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

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

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and machinery

12.5% on cost

Fixtures and fittings

25% on cost

Motor vehicles

25% on cost

Computer equipment

33% on cost

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

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

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 54 (2021 - 46).

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

4

Tangible assets

Furniture, fittings and equipment
 £

Motor vehicles
 £

Other tangible assets
£

Total
£

Cost or valuation

At 1 February 2021

13,477

201,924

1,330,817

1,546,218

Additions

1,793

213,742

84,348

299,883

Disposals

-

(66,378)

(29,950)

(96,328)

At 31 January 2022

15,270

349,288

1,385,215

1,749,773

Depreciation

At 1 February 2021

8,559

106,037

370,848

485,444

Charge for the year

2,017

63,195

128,150

193,362

Eliminated on disposal

-

(49,143)

(18,191)

(67,334)

At 31 January 2022

10,576

120,089

480,807

611,472

Carrying amount

At 31 January 2022

4,694

229,199

904,408

1,138,301

At 31 January 2021

4,918

95,887

959,969

1,060,774

5

Investment properties

31 January
2022
£

At 1 February

230,000

At 31 January

230,000

There has been no valuation of investment property by an independent valuer.

6

Stocks

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

31 January
2022
£

31 January
2021
£

Work in progress

2,292,343

1,789,328

Other inventories

53,275

49,525

2,345,618

1,838,853

7

Debtors

31 January
2022
£

31 January
2021
£

Trade debtors

1,095

643,830

Prepayments

2,000

8,000

Corporation tax

24,827

7,198

Owed by/(from) related parties

61,864

122,224

Other debtors due > 1 year

-

12,000

VAT

64,708

37,950

154,494

831,202

 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

8

Creditors

Creditors: amounts falling due within one year

Note

31 January
2022
£

31 January
2021
£

Due within one year

 

Bank loans and overdrafts

10

547,709

370,571

Trade creditors

 

1,340,132

1,311,581

Taxation and social security

 

60,884

59,148

Accruals and deferred income

 

408,174

257,490

Other creditors

 

220,530

183,847

 

2,577,429

2,182,637

Creditors: amounts falling due after more than one year

Note

31 January
2022
£

31 January
2021
£

Due after one year

 

Loans and borrowings

10

669,798

976,075

9

Share capital

Allotted, called up and fully paid shares

 

31 January
2022

31 January
2021

 

No.

£

No.

£

Ordinary of £1 each

100

100

100

100

         
 

Morgan Construction Wales Limited

Notes to the Unaudited Financial Statements
for the Year Ended 31 January 2022

10

Loans and borrowings

31 January
2022
£

31 January
2021
£

Non-current loans and borrowings

Bank borrowings

254,967

333,075

Other borrowings

94,699

246,762

Hire purchase

320,132

396,238

669,798

976,075

31 January
2022
£

31 January
2021
£

Current loans and borrowings

Bank borrowings

254,653

105,000

Hire purchase

293,056

265,571

547,709

370,571

11

Dividends

Interim dividends paid

   

31 January
2022
£

 

31 January
2021
£

Interim dividend of £1,040 (2021 - £800) per each Ordinary

 

104,000

 

80,000

         

12

Related party transactions

Directors' remuneration

The directors' remuneration for the year was as follows:

2022
£

2021
£

Remuneration

-

16,152