Company registration number 02912949 (England and Wales)
WJ South Limited
Annual report and financial statements
For the year ended 31 January 2023
WJ South Limited
Company information
Directors
Mr G M Andrews
Mr W D Johnston
Company number
02912949
Registered office
Brook Farm
Drayton Road
Newton Longville
Milton Keynes
MK17 0BH
Auditor
DJH Mitten Clarke Audit Limited
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
WJ South Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Statement of financial position
11 - 12
Statement of changes in equity
13
Notes to the financial statements
14 - 28
WJ South Limited
Strategic report
For the year ended 31 January 2023
- 1 -

The directors present the strategic report for the year ended 31 January 2023.

 

INTRODUCTION

WJ South Limited ("the company") was incorporated in 1994 and is a trading subsidiary of WJ (Group) Limited

 

The company is able to provide temporary and permanent road markings (screed, extruded and raised rib line), road stud installation both temporary and permanent, reflective studs, road marking removal (which includes one of the largest fleets of specialist hydro-blasting removal and retexturing machines in the UK), road surface retexturing, road truck fabrication and refurbishment, applied media products, temporary safety cameras, road marking testing services.

In December 2020 THI Investments took a majority share in the WJ Group. THI’s involvement has enabled the company to continue to grow within the existing markets both organically and through acquisition. Additionally, it will support the company's transformation into a data driven business though IT and technology which will improve our operational efficiency. We continue to explore adjacent markets and our commitment to innovation has provided some growth opportunities, particularly in the Intelligent Transportation Systems sector.

The company is committed to creating safe and sustainable journeys for everyone and we have an ambitious target of becoming net zero by 2032.

 

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

 

Turnover in 2023 of £29,248,825 was an increase of 9.9% on the previous year which was due to an increase in activity of National Highways (formerly Highways England) a number of local authorities and in our off highways sector.

 

The gross profit margin has decreased from 23.1% in 2022 to 20.0% in 2023 which reflects a change in sales mix but also the impact of inflation on our raw material costs which, due to annual pricing negotiations with key customer, are passed on with a lag.

 

The company maintains its focus on working capital management with particular focus on inventory management and debt control which resulted in an increase of £1,647,359 in working capital.

 

During the year the company has invested £1,036,690 in capital expenditure reflecting an ongoing strategy of maintaining the most modern and technologically advanced plant and machinery in our sector in order to ensure maximum self-delivery and unparalleled customer service. Investment decisions are subject to capital appraisal reviews in line with this vision and taking into account the company's resources and innovation strategy.

 

Total net assets at the end of the year increased from £11,692,330 to £12,870,240 reflecting the retained profit in the period.

WJ South Limited
Strategic report (continued)
For the year ended 31 January 2023
- 2 -
PRINCIPAL RISKS AND UNCERTAINTIES

Government Spending Decisions - the Company recognises that the majority of its income derives from government sources and therefore plays an active role, through a number of trade bodies and associations, in promoting and developing the safety, effectiveness and sustainability of its products and services in live with evolving DoT priorities.

 

Competition - the Company differentiates itself from the competition by continued efforts in R&D and Innovation and a strategy of delivering safer and more sustainable products and services. The Company and wider Group has made strategic investments to develop the UK largest nationwide network and has diversified into adjacent markets to enable it to stay ahead of the evolving competitor base.

 

Materials Supply – the Company has developed an internal supply chain for the bulk of the product it uses and has developed strong partnerships in areas where internal production is not possible. The Company works closely with its raw materials supply chains and utilises group buying power to ensure that availability of product is robust and that pricing is sustainable.

Fuel Prices – the Company is not immune to the impact of rising fuel prices but the effect is mitigated through the development and upgrading of a modern fleet of fuel efficient vehicle and an industry leading driver awareness training program and incentivisation scheme which leads to not only improved fuel consumption but also, as a consequence, a reduction in the Company’s carbon footprint.

 

COVID 19 – the Company adopted a very proactive approach to the management operations and the safety of employees which continues to be the number one priority of the Company. The Company have introduced a number of initiatives during and coming through the pandemic to ensure that their teams are in the best possible position to succeed in the future. Community is a core value for WJ and we fully support the Government our clients, communities and other stakeholders as we deliver our vision of ‘Safer sustainable journeys for all’.

 

FINANCIAL INSTRUMENT RISK

Credit Risk – the Company has a broad range of customers including both private companies and public sector bodies. The risk that the Company will suffer from significant levels of bad debt is managed by the diversified customer portfolio and the well established credit control procedures operated across the Company.

 

Cash Flow Risk – the Company is funded through a combination of Hire Purchase funding, a Group Term Loan and a Group Revolving Credit Facility. The Company also has access to committed investment funding to support significant capex or acquisitions.

 

Liquidity Risk – the Company is able to meet short and medium term obligations from operational cash generation and in addition have access to in excess of £20m of undrawn committed facilities.

 

 

 

 

 

 

 

 

 

WJ South Limited
Strategic report (continued)
For the year ended 31 January 2023
- 3 -
KEY PERFORMANCE INDICATORS

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross profit margin and operating profit margin. The success of the company will be reflected in the balance sheet net assets and company liquidity.

 

                 2023     2022    

Turnover             £29,248,825     £26,619,497    

Gross profit margin         20.0%     23.1%    

Operating profit margin         2.8%     8.2%    

 

Explanation of the key performance indicators detailed above can be found in the review of business section of this report.

On behalf of the board

Mr G M Andrews
Director
28 July 2023
WJ South Limited
Directors' report
For the year ended 31 January 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 January 2023.

Principal activities

The principal activity of the company continued to be that of road surfacing contracting.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid (2022 - £nil). The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr G M Andrews
Mr W D Johnston
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:

 

 

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.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

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.

WJ South Limited
Directors' report (continued)
For the year ended 31 January 2023
- 5 -
On behalf of the board
Mr G M Andrews
Director
28 July 2023
WJ South Limited
Independent auditor's report
To the members of WJ South Limited
- 6 -
Opinion

We have audited the financial statements of WJ South Limited (the 'company') for the year ended 31 January 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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.

Other information

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.

WJ South Limited
Independent auditor's report (continued)
To the members of WJ South Limited
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

WJ South Limited
Independent auditor's report (continued)
To the members of WJ South Limited
- 8 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

To address the risk of fraud through management bias and override of controls, we:

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

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 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.

WJ South Limited
Independent auditor's report (continued)
To the members of WJ South Limited
- 9 -
Gary Neil Chadwick FCCA
Senior Statutory Auditor
For and on behalf of DJH Mitten Clarke Audit Limited
31 July 2023
2023-07-31
Chartered Accountants
Statutory Auditor
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
WJ South Limited
Statement of comprehensive income
For the year ended 31 January 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
29,248,825
26,619,497
Cost of sales
(23,396,228)
(20,475,961)
Gross profit
5,852,597
6,143,536
Administrative expenses
(5,088,782)
(4,175,859)
Other operating income
66,000
209,819
Operating profit
4
829,815
2,177,496
Interest receivable and similar income
6
589,399
162,886
Interest payable and similar expenses
7
(170,011)
(132,564)
Profit before taxation
1,249,203
2,207,818
Tax on profit
8
(71,293)
(150,291)
Profit for the financial year
1,177,910
2,057,527

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

WJ South Limited
Statement of financial position
As at 31 January 2023
31 January 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
9
528,899
463,457
Other intangible assets
9
42,336
-
0
Total intangible assets
571,235
463,457
Tangible assets
10
3,540,016
3,738,874
Investments
11
1,201,797
1,267,239
5,313,048
5,469,570
Current assets
Stocks
13
788,000
897,000
Debtors falling due after more than one year
14
12,881,655
9,032,788
Debtors falling due within one year
14
3,629,985
4,233,900
Cash at bank and in hand
533,312
948,088
17,832,952
15,111,776
Creditors: amounts falling due within one year
15
(4,560,284)
(3,486,467)
Net current assets
13,272,668
11,625,309
Total assets less current liabilities
18,585,716
17,094,879
Creditors: amounts falling due after more than one year
16
(5,442,897)
(5,201,263)
Provisions for liabilities
Provisions
18
90,000
90,000
Deferred tax liability
19
182,579
111,286
(272,579)
(201,286)
Net assets
12,870,240
11,692,330
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
22
12,870,140
11,692,230
Total equity
12,870,240
11,692,330
WJ South Limited
Statement of financial position (continued)
As at 31 January 2023
31 January 2023
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 28 July 2023 and are signed on its behalf by:
Mr G M Andrews
Director
Company Registration No. 02912949
WJ South Limited
Statement of changes in equity
For the year ended 31 January 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 February 2021
100
9,634,703
9,634,803
Year ended 31 January 2022:
Profit and total comprehensive income for the year
-
2,057,527
2,057,527
Balance at 31 January 2022
100
11,692,230
11,692,330
Year ended 31 January 2023:
Profit and total comprehensive income for the year
-
1,177,910
1,177,910
Balance at 31 January 2023
100
12,870,140
12,870,240
WJ South Limited
Notes to the financial statements
For the year ended 31 January 2023
- 14 -
1
Accounting policies
Company information

WJ South Limited is a private company limited by shares incorporated in England and Wales. The registered office is Brook Farm, Drayton Road, Newton Longville, Milton Keynes, MK17 0BH.

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 prepared in sterling, which is the functional currency of the company. Monetary amounts 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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of WJ Group Holdings Limited. These consolidated financial statements are available from its registered office, Unit 7 Brock Way, Newcastle, Staffordshire, United Kingdom, ST5 6AZ.

Preparation of consolidated financial statements

 

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

WJ South Limited is a wholly owned subsidiary of WJ (Group) Limited and the results of WJ South Limited are included in the consolidated financial statements of WJ Group Holdings Limited which are available from Unit 7 Brock Way, Newcastle, Staffordshire, United Kingdom, ST5 6AZ.

 

WJ Group Holdings Limited is the smallest group for which consolidated accounts are prepared.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with other group entities where the relationship is one of being wholly owned.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life of 30 years.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Stud dev.
Not amortised
ERP impl.
Not amortised
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
25% straight line or straight line over the period of the lease
Plant and equipment
25% on reducing balance
Fixtures and fittings
20% on reducing balance
Computers
50% on cost
Motor vehicles
35% on reducing balance and 25% on reducing balance

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.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
1
Accounting policies
(Continued)
- 16 -
1.7
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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).

Recoverable amount is the higher of fair value less costs to sell and value in use.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

1.9
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.

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.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand.

1.11
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
1
Accounting policies
(Continued)
- 17 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
1
Accounting policies
(Continued)
- 18 -
1.12
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
1
Accounting policies
(Continued)
- 19 -

 

1.17
Leases

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

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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 leases asset are consumed.

1.18
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.

1.19

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

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.

 

Critical judgements

 

In the directors' opinion there are no critical judgements that they have made in applying the company's accounting policies and that have had a significant effect on the amounts recognised in the financial statements.

 

Key sources of estimation uncertainty

 

The directors do not consider there to be any key estimates or assumptions used in preparing the financial statements.

 

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
- 20 -
3
Turnover and other revenue
2023
2022
£
£
Other revenue
Interest income
322,041
162,886
Dividends received
267,358
-
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Research and development costs
4,314
-
Fees payable to the company's auditor for the audit of the company's financial statements
19,250
17,500
Depreciation of tangible fixed assets
1,168,913
1,121,847
Profit on disposal of tangible fixed assets
(2,759)
(6,710)
Operating lease charges
326,776
192,673
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Management
3
3
Administration
37
33
Site workforce
124
103
Total
164
139

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
7,497,202
6,046,506
Social security costs
886,876
686,175
Pension costs
257,600
176,126
8,641,678
6,908,807
WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
- 21 -
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
322,041
162,886
Income from fixed asset investments
Income from shares in group undertakings
267,358
-
0
Total income
589,399
162,886
7
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
132,407
72,937
Interest on finance leases and hire purchase contracts
39,206
59,627
Other interest
(1,602)
-
0
170,011
132,564
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
56,807
Deferred tax
Origination and reversal of timing differences
71,293
93,484
Total tax charge
71,293
150,291
WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
8
Taxation
(Continued)
- 22 -

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:

2023
2022
£
£
Profit before taxation
1,249,203
2,207,818
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
237,349
419,485
Tax effect of expenses that are not deductible in determining taxable profit
25,206
10,261
Change in unrecognised deferred tax assets
6,656
-
0
Effect of change in corporation tax rate
17,110
26,709
Group relief
(175,049)
(276,312)
Depreciation on assets not qualifying for tax allowances
3,862
8,220
Research and development tax credit
-
0
(2,843)
Dividend income
(50,798)
-
0
Super deduction allowance
(19,827)
(35,229)
Tax charge on hive up of assets
26,784
-
0
Taxation charge for the year
71,293
150,291

Factors affecting future tax charges

The main corporation tax rate has been legislated to increase from 19% to 25% with effect from 1 April 2023, significantly increasing the tax payable on profits earned.

 

Given the imminent change to the main corporation tax rate, deferred tax has been provided for at 25% where appropriate.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
- 23 -
9
Intangible fixed assets
Goodwill
Stud dev.
ERP impl.
Total
£
£
£
£
Cost
At 1 February 2022
483,457
-
0
-
0
483,457
Additions
-
0
16,578
25,758
42,336
Transfers
65,442
-
0
-
0
65,442
At 31 January 2023
548,899
16,578
25,758
591,235
Amortisation and impairment
At 1 February 2022 and 31 January 2023
20,000
-
0
-
0
20,000
Carrying amount
At 31 January 2023
528,899
16,578
25,758
571,235
At 31 January 2022
463,457
-
0
-
0
463,457
10
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 February 2022
738,723
184,269
65,674
49,168
10,293,912
11,331,746
Additions
102,075
65,088
11,588
2,804
855,135
1,036,690
Disposals
-
0
-
0
-
0
-
0
(349,597)
(349,597)
At 31 January 2023
840,798
249,357
77,262
51,972
10,799,450
12,018,839
Depreciation and impairment
At 1 February 2022
692,917
125,015
48,864
48,501
6,677,575
7,592,872
Depreciation charged in the year
35,339
25,500
5,680
1,046
1,101,348
1,168,913
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(282,962)
(282,962)
At 31 January 2023
728,256
150,515
54,544
49,547
7,495,961
8,478,823
Carrying amount
At 31 January 2023
112,542
98,842
22,718
2,425
3,303,489
3,540,016
At 31 January 2022
45,806
59,254
16,810
667
3,616,337
3,738,874
WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
10
Tangible fixed assets
(Continued)
- 24 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. These are secured on the assets in which they relate to.

 

2023
2022
£
£
Motor vehicles
886,727
1,722,347
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
1,201,797
1,267,239
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 February 2022
1,267,239
Transfer
(65,442)
At 31 January 2023
1,201,797
Carrying amount
At 31 January 2023
1,201,797
At 31 January 2022
1,267,239
12
Subsidiaries

Details of the company's subsidiaries at 31 January 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Bellstan Limited
Unit 1 Brunel House Station Road, Mortimer, Reading, England, RG7 2AB
Roadmarking contracting
Ordinary
100.00
13
Stocks
2023
2022
£
£
Raw materials and consumables
788,000
897,000
WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
- 25 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,765,373
2,454,081
Corporation tax recoverable
448,388
524,012
Amounts owed by group undertakings
485,092
63,904
Other debtors
269
202,917
Prepayments and accrued income
930,863
988,986
3,629,985
4,233,900
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
12,881,655
9,032,788
Total debtors
16,511,640
13,266,688

Amounts owed by group undertakings due after more than one year are due between 1 and 2 years. Interest is receivable at a rate of 2.5%. The amounts are unsecured.

15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
434,655
680,103
Trade creditors
1,099,252
1,020,962
Amounts owed to group undertakings
1,556,775
905,810
Taxation and social security
739,740
198,320
Other creditors
276,863
227,462
Accruals and deferred income
452,999
453,810
4,560,284
3,486,467
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
146,628
491,229
Amounts owed to group undertakings
5,296,269
4,490,034
Other creditors
-
0
220,000
5,442,897
5,201,263
WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
16
Creditors: amounts falling due after more than one year
(Continued)
- 26 -

Amounts owed to group undertakings due after more than one year are due between 1 and 2 years. Interest is payable at a rate of 2.5%. The amounts are unsecured.

17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
434,655
680,103
In two to five years
146,628
491,229
581,283
1,171,332

Finance lease payments represent rentals payable by the company for certain items of motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Hire purchase contracts are secured against the assets in which they relate.

18
Provisions for liabilities
2023
2022
£
£
Other Provisions
90,000
90,000
Movements on provisions:
Other Provisions
£
At 1 February 2022 and 31 January 2023
90,000

Other provisions relate to rates which have not been charged to the company for premises utilised.

19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
182,579
111,286
WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
19
Deferred taxation
(Continued)
- 27 -
2023
Movements in the year:
£
Liability at 1 February 2022
111,286
Charge to profit or loss
71,293
Liability at 31 January 2023
182,579
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
257,600
176,126

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.

 

Contributions totalling £42,595 (2022 - £nil) were payable to the fund at the balance sheet date and are included in creditors.

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.

22
Profit and loss reserves

Profit and loss reserves are made up of accumulated profits less accumulated losses and distributions to shareholders.

23
Financial commitments, guarantees and contingent liabilities

At the balance sheet date, the company had guaranteed borrowings of a parent company, all charges being managed by a security agent. At 31 January 2023 these borrowings amounted to £55,409,948 (2022 - £50,079,960). As at the date of approval of these financial statements, the directors do not anticipate that the guarantees will be called upon.

WJ South Limited
Notes to the financial statements (continued)
For the year ended 31 January 2023
- 28 -
24
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:

2023
2022
£
£
Within one year
259,210
266,759
Between two and five years
414,297
625,349
In over five years
160,417
-
0
833,924
892,108
25
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
291,888
26
Ultimate controlling party

The immediate parent company is WJ (Group) Limited which owns 100% of the ordinary share capital. WJ (Group) Limited is incorporated in England and the registered office is Unit 7 Brock Way, Newcastle, Staffordshire, ST5 6AZ.

The ultimate controlling party is THI Holdings GmbH, a company registered in Germany. THI Holdings GmbH is controlled by the Hagenmeyer family.

The smallest group into which the entity is consolidated is WJ Group Holdings Limited. WJ Group Holdings Limited is incorporated in England. Copies of the group financial statements of WJ Group Holdings Limited are available from 17 Grosvenor Street, London, United Kingdom, W1K 4QG.

 

The largest group into which the entity is consolidated is THI Holdings GmbH, a company registered in Germany. Copies of the group financial statements of THI Holdings GmbH are available from THI Investments, Eberhardstraße 65, 70173 Stuttgart, Germany.

2023-01-312022-02-01falseCCH SoftwareCCH Accounts Production 2023.200Mr G M AndrewsMr W D Johnston1177910029129492022-02-012023-01-3102912949bus:Director12022-02-012023-01-3102912949bus:Director22022-02-012023-01-3102912949bus:RegisteredOffice2022-02-012023-01-31029129492023-01-31029129492021-02-012022-01-3102912949core:RetainedEarningsAccumulatedLosses2021-02-012022-01-3102912949core:RetainedEarningsAccumulatedLosses2022-02-012023-01-3102912949core:Goodwill2023-01-3102912949core:Goodwill2022-01-3102912949core:OtherResidualIntangibleAssets2023-01-3102912949core:OtherResidualIntangibleAssets2022-01-31029129492022-01-3102912949core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2023-01-3102912949core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2023-01-3102912949core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-01-3102912949core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-01-3102912949core:LeaseholdImprovements2023-01-3102912949core:PlantMachinery2023-01-3102912949core:FurnitureFittings2023-01-3102912949core:ComputerEquipment2023-01-3102912949core:MotorVehicles2023-01-3102912949core:LeaseholdImprovements2022-01-3102912949core:PlantMachinery2022-01-3102912949core:FurnitureFittings2022-01-3102912949core:ComputerEquipment2022-01-3102912949core:MotorVehicles2022-01-3102912949core:Non-currentFinancialInstrumentscore:AfterOneYear2023-01-3102912949core:Non-currentFinancialInstrumentscore:AfterOneYear2022-01-3102912949core:CurrentFinancialInstruments2023-01-3102912949core:CurrentFinancialInstruments2022-01-3102912949core:CurrentFinancialInstrumentscore:WithinOneYear2023-01-3102912949core:CurrentFinancialInstrumentscore:WithinOneYear2022-01-3102912949core:Non-currentFinancialInstruments2023-01-3102912949core:Non-currentFinancialInstruments2022-01-3102912949core:ShareCapital2023-01-3102912949core:ShareCapital2022-01-3102912949core:RetainedEarningsAccumulatedLosses2023-01-3102912949core:RetainedEarningsAccumulatedLosses2022-01-3102912949core:ShareCapital2021-01-3102912949core:RetainedEarningsAccumulatedLosses2021-01-3102912949core:Goodwill2022-02-012023-01-3102912949core:IntangibleAssetsOtherThanGoodwill2022-02-012023-01-3102912949core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-02-012023-01-3102912949core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-02-012023-01-3102912949core:LeaseholdImprovements2022-02-012023-01-3102912949core:PlantMachinery2022-02-012023-01-3102912949core:FurnitureFittings2022-02-012023-01-3102912949core:ComputerEquipment2022-02-012023-01-3102912949core:MotorVehicles2022-02-012023-01-310291294912022-02-012023-01-310291294912021-02-012022-01-3102912949core:UKTax2022-02-012023-01-3102912949core:UKTax2021-02-012022-01-310291294922022-02-012023-01-310291294922021-02-012022-01-310291294932022-02-012023-01-310291294932021-02-012022-01-3102912949core:Goodwill2022-01-3102912949core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-01-3102912949core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-01-31029129492022-01-3102912949core:Goodwillcore:ExternallyAcquiredIntangibleAssets2022-02-012023-01-3102912949core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillcore:ExternallyAcquiredIntangibleAssets2022-02-012023-01-3102912949core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillcore:ExternallyAcquiredIntangibleAssets2022-02-012023-01-3102912949core:ExternallyAcquiredIntangibleAssets2022-02-012023-01-3102912949core:LeaseholdImprovements2022-01-3102912949core:PlantMachinery2022-01-3102912949core:FurnitureFittings2022-01-3102912949core:ComputerEquipment2022-01-3102912949core:MotorVehicles2022-01-310291294912022-02-012023-01-3102912949core:AfterOneYear2023-01-3102912949core:AfterOneYear2022-01-3102912949core:Non-currentFinancialInstruments12023-01-3102912949core:Non-currentFinancialInstruments12022-01-3102912949core:WithinOneYear2023-01-3102912949core:WithinOneYear2022-01-3102912949core:BetweenTwoFiveYears2023-01-3102912949core:BetweenTwoFiveYears2022-01-3102912949core:MoreThanFiveYears2023-01-3102912949core:MoreThanFiveYears2022-01-3102912949bus:PrivateLimitedCompanyLtd2022-02-012023-01-3102912949bus:FRS1022022-02-012023-01-3102912949bus:Audited2022-02-012023-01-3102912949bus:FullAccounts2022-02-012023-01-31xbrli:purexbrli:sharesiso4217:GBP