REGISTERED NUMBER: |
LCB Group Holdings Limited |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 28 February 2023 |
REGISTERED NUMBER: |
LCB Group Holdings Limited |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 28 February 2023 |
LCB Group Holdings Limited (Registered number: 07966669) |
Contents of the Financial Statements |
for the Year Ended 28 February 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Statement of Comprehensive Income | 8 |
Statement of Financial Position | 9 |
Statement of Changes in Equity | 10 |
Notes to the Financial Statements | 11 |
LCB Group Holdings Limited |
Company Information |
for the Year Ended 28 February 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
Chartered Accountants |
& Statutory Auditors |
Becket House |
36 Old Jewry |
London |
EC2R 8DD |
LCB Group Holdings Limited (Registered number: 07966669) |
Strategic Report |
for the Year Ended 28 February 2023 |
The directors present their strategic report for the year ended 28 February 2023. |
REVIEW OF BUSINESS |
The Directors have considered that the company has continued to operate efficiently and market leading during the period, whilst continuing to develop its operations in new geographical locations. |
The business model of developing long term contract and framework agreements with public sector clients has continued, and as with previous years, remains successful. This accounting period has seen the company renew several of its frameworks/contracts, for a further 3-4 years on average. During the period, the company has also been awarded multiple new frameworks/contracts with average lengths of 3 years. During its 11th year of trading, our brand has continued to grow, developing relationships with new and existing clients. This has resulted in a further increase in revenue from February 2022 year end. |
As with previous years, the company has continued to invest in people, employing further 'in house' operatives where possible, in lieu of a reliance to use sub-contractors. This has enabled us to maintain control of service and quality. This approach has resulted in an increase in gross profit margin, as a result. |
We have continued to employ strong personnel with reputable and experienced backgrounds through the period, and have invested in several new posts across the business to support organic growth expected in the coming years, as per the company's robust business plan. Whilst this has contributed to a slight drop in Net Profit margin, we expect this to support our financial year end 2024 of £52m revenue. |
KEY FINANCIAL HIGHLIGHTS |
2023 | 2022 | 2021 | 2020 |
Turnover | 35,615,084 | 31,711,764 | 23,611,716 | 21,268,652 |
Turnover growth | 12.31% | 34.31% | 11.02% | 17.39% |
Gross profit margin | 22.35% | 20.84% | 18.49% | 21.05% |
Profit before tax | 4.33% | 6.43% | 7.96% | 8.36% |
Within the period, the company has further developed its own IT module, as well as a new ERP system for our accounting package. In line with previous trading years, the company has no borrowing in the year, apart from HP agreements on new vehicles to support a larger workforce. The company has maintained a strong balance sheet, and cash position throughout. Bad debt continues to be very low, and the risk is massively reduced compared to traditional construction businesses. |
Adjusted EBITDA for the business was £2.8m for the year end 28 February 2023. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Labour shortages - the industry has experienced a record number of labour shortages and as such, is continuously high on the company's risk register. The company has employed support staff dedicated to recruitment within the period and has revised the recruitment process. Owing to an already large 'in house' workforce and excellent KPI's with customers, we have managed to deliver in line with client requirements, even through times of difficult recruitment periods. During the period, certain geographical locations such as South West of England have been more challenging than other to recruit suitable labour. An in-house recruitment post has been created which has seen mitigation to these labour shortages. The company has a low turnover of staff in management positions, which maintains consistency in our workforce. |
Inflation and Material increases - CPI has continually increased, and like other sectors has hit the cost of materials, goods and services. The company's agile approach has meant it has successfully rode the turbulent period and continued to deliver excellent financial performance. The company has increased its procurement team, to better negotiate terms and prices with supply chain and procured in bulk for economies of scale to reduce costs on high usage materials. The company's frameworks/long term contracts have CPI increases built in and as such have worked with clients to apply these appropriately across the contracts. Any new contracts/projects have been priced appropriately and where approvals are taking longer than expected, have been re-priced appropriately in line with the period inflation. We expect to see material cost inflation cool down in the later parts of 2023 and therefore the 'catch up' in client CPI increases, should see the business maintain a solid EBIDA in the financial year 2024. |
ON BEHALF OF THE BOARD: |
LCB Group Holdings Limited (Registered number: 07966669) |
Report of the Directors |
for the Year Ended 28 February 2023 |
The directors present their report with the financial statements of the company for the year ended 28 February 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of general builders and maintenance. |
DIVIDENDS |
No dividends will be distributed for the year ended 28 February 2023. |
FUTURE DEVELOPMENTS |
Future Developments - The company has successfully restructured some of the departments within the company and has resulted in strong profit performance as a result. Newer offices in Bristol and Exeter have further investment and extraordinary costs for the period. More recently the business committed to opening new offices in Gloucester and Luton to support future growth aspirations. Revenue is forecasted to be circa £52m in the financial year 2024 as a result of continued growth and company investment strategies. |
The business has successfully obtained its PAS2030 accreditation, to maximise opportunities in the decarbonisation sector and will explore large opportunities in the financial year 2024 and beyond as a result. Our approach to sustainable business activities has also led us to invest in a greener fleet of vehicles moving forward. |
The company continues to be proactive in tendering for new long-term contracts and with a strong bid team, is confident that will result in sustainable and organic growth across the business. With additional support services introduced in the period, such as a Regional Director, IT Manager, procurement team, & regional managers, the directors are confident of continues successful growth. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 March 2022 to the date of this report. |
DONATIONS |
During the year the company made donations of £24,458 (2022: £11,423). |
FINANCIAL INSTRUMENTS |
The company's principal financial instruments comprise bank balances, bank overdrafts, trade debtors, trade creditors, hire purchases and group inter company loans. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations. |
Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below. |
In respect of bank balances the liquidity risk is managed by maintaining strong cash balances with access to overdraft facilities if required. |
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. |
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. |
Financial support from parent and other subsidiary undertakings is provided and available to support financing the company's operations. |
LCB Group Holdings Limited (Registered number: 07966669) |
Report of the Directors |
for the Year Ended 28 February 2023 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are 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 each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Xeinadin Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
LCB Group Holdings Limited |
Opinion |
We have audited the financial statements of LCB Group Holdings Limited (the 'company') for the year ended 28 February 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and 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 28 February 2023 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 |
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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors 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 Directors 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 Directors. |
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 directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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. |
Report of the Independent Auditors to the Members of |
LCB Group Holdings Limited |
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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations we have considered the following: |
- | The nature of the industry and sector, control environment and business performance; |
- | Results of the enquiries of management about their own identification and assessment of the risks of |
irregularities; |
- | Any matters we have identified having obtained and reviewed the company's documentation of their |
policies and procedures relating to: |
-- | identifying, evaluating and complying with laws and regulations and whether they were aware of any |
instances of noncompliance; |
-- | detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected |
or alleged fraud; |
-- | the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; |
-- | the matters discussed among the audit engagement team regarding how and where fraud might occur in |
the financial statements and any potential indicators of fraud. |
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of income.. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. |
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, health and safety and tax legislation. |
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. |
Audit response to risks identified |
Our procedures to respond to risks identified included the following: |
- | reviewing the financial statement disclosures and testing to supporting documentation to assess compliance |
with provisions of relevant laws and regulations described as having a direct effect on the financial statements; |
- | enquiring of management concerning actual and potential litigation and claims; |
- | performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of |
material misstatement due to fraud; |
- | reviewing correspondence with HMRC; and |
- | in addressing the risk of fraud through management override of controls, testing the appropriateness of journal |
entries and other adjustments; assessing whether the judgements made in making accounting estimates are |
indicative of a potential bias; and evaluating the business rationale of any significant transactions that are |
unusual or outside the normal course of business. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. |
As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). |
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. |
Report of the Independent Auditors to the Members of |
LCB Group Holdings Limited |
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. |
for and on behalf of |
Chartered Accountants |
& Statutory Auditors |
Becket House |
36 Old Jewry |
London |
EC2R 8DD |
LCB Group Holdings Limited (Registered number: 07966669) |
Statement of Comprehensive |
Income |
for the Year Ended 28 February 2023 |
28.2.23 | 28.2.22 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
1,567,348 | 2,030,981 |
Other operating income |
OPERATING PROFIT | 5 |
Interest receivable and similar income |
1,608,969 | 2,095,414 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
LCB Group Holdings Limited (Registered number: 07966669) |
Statement of Financial Position |
28 February 2023 |
28.2.23 | 28.2.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 |
Tangible assets | 9 |
Investments | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 14 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 17 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
LCB Group Holdings Limited (Registered number: 07966669) |
Statement of Changes in Equity |
for the Year Ended 28 February 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 March 2021 |
Changes in equity |
Total comprehensive income | - |
Balance at 28 February 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 28 February 2023 |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements |
for the Year Ended 28 February 2023 |
1. | STATUTORY INFORMATION |
LCB Group Holdings Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in theses financial statements are rounded to the nearest £. |
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepared 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. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 3.17(d); |
• | the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); |
• | the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A; |
• | the requirement of paragraph 33.7. |
The financial statements of the company are consolidated in the financial statements of LCB Construction Holdings Limited. These consolidated financial statements are available from its registered office, Unit 1 & 2, Stuart Close, Trade Park, Cardiff, Wales CF11 8QF. |
Significant judgements and estimates |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The application of the company's accounting policies, the management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The key sources of estimation uncertainty that have significant effect on the amounts recognised in the financial statements are described below: |
a) Useful economic lives of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates and physical condition of the assets. |
b) Impairment of debtors |
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of discounts and rebates allowed by the group and value added tax. |
Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a financing transaction, the fair value of the consideration is measured as the present value of all future receipts using the imputed rate of interest. |
The company recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the company retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity and (e) when the specific criteria relating to each of the company's sales channels have been met, as described below. |
i) Sale of goods |
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point that the customer has signed for the delivery of the goods. Deposits received in advance for goods are included in creditors due within one year. |
ii) Rendering of services |
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of discounts and rebates allowed by the company and value added tax. |
Long term contract retention income is only recognised as turnover if received by the date of approval of the company's financial statements for that financial year. |
Contract turnover is calculated as that proportion of total contract value which revenue generated to date bears to total expected revenue for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Tangible fixed assets are measured at cost less depreciation and any accumulated impairment losses. Costs include the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs. |
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively. |
Tangible assets are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying value is recognised in the profit and loss. |
Impairment of assets |
At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss. If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the 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 |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
2. | ACCOUNTING POLICIES - continued |
Inventories |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition. |
Taxation |
Taxation for the year 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 statement of financial position date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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 the financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year 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. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Hire purchase and leasing commitments |
At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement. |
i) Finance leased assets |
Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases. |
Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined the group's incremental borrowing rate is used. Incremental direct costs, incurred in negotiating and arranging the lease, are included in the cost of the asset. |
Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date. |
The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate of charge on the balance of the capital repayments outstanding. |
ii) Operating leased assets |
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease. |
iii) Lease incentives |
Incentives received to enter into a finance lease reduce the fair value of the asset and are included in the calculation of present value of minimum lease payments. |
Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense, on a straight-line basis over the period of the lease. |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
2. | ACCOUNTING POLICIES - continued |
Employee benefits |
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once contributions have been paid the group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds. |
Other employee benefits such as paid holiday arrangements are recognised as an expense in the period in which they are incurred. |
Long term contracts |
The amount of profit attributable to the stage of completion of a long term contract is recognised when the outcome of the contract can be foreseen with reasonable certainty. Turnover of such contracts is stated at cost appropriate to their stage of completion plus attributable profits less amounts recognised in previous years. Provision is made for any losses which are forseen. |
Contract work in progress is stated at costs incurred, less those transferred to the profit and loss account, after deducting foreseeable losses and payments on account not matched with turnover. |
Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments received on account. |
Provisions and contingencies |
i) Provisions |
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be estimated reliably. |
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations might be small. |
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as a finance cost. |
ii) Contingencies |
Contingent liabilities are not recognised, except those acquired in a business combination. Contingent liabilities arise as a result of past events when (i) it is not probable that there will be an outflow of resources or that the amount cannot be reliably measured at the reporting date or (ii) when the existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the company's control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote. |
Contingent assets are not recognised. Contingent assets are disclosed in the financial statements when an inflow of economic benefits is probable. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
28.2.23 | 28.2.22 |
£ | £ |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
4. | EMPLOYEES AND DIRECTORS |
28.2.23 | 28.2.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
28.2.23 | 28.2.22 |
Administration & managerial staff | 65 | 60 |
Operatives | 227 | 176 |
28.2.23 | 28.2.22 |
£ | £ |
Directors' remuneration |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
28.2.23 | 28.2.22 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Development costs amortisation |
Auditors' remuneration |
Other non- audit services |
Motor vehicle leasing |
Government grant | ( |
) | ( |
) |
Interest received | ( |
) | ( |
) |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
28.2.23 | 28.2.22 |
£ | £ |
Other interest |
Hire purchase |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
28.2.23 | 28.2.22 |
£ | £ |
Current tax: |
UK corporation tax |
CT prior year adjustment | (5,385 | ) | - |
Total current tax |
Deferred tax |
Tax on profit |
UK corporation tax has been charged at 19% (2022 - 19%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
28.2.23 | 28.2.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Depreciation in excess of capital allowances |
Under provision in prior year | (5,369 | ) | - |
Total tax charge | 475,866 | 407,207 |
8. | INTANGIBLE FIXED ASSETS |
Development |
costs |
£ |
COST |
At 1 March 2022 |
Additions |
At 28 February 2023 |
AMORTISATION |
At 1 March 2022 |
Amortisation for year |
At 28 February 2023 |
NET BOOK VALUE |
At 28 February 2023 |
At 28 February 2022 |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor |
machinery | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 March 2022 |
Additions |
Disposals | ( |
) | ( |
) |
At 28 February 2023 |
DEPRECIATION |
At 1 March 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 28 February 2023 |
NET BOOK VALUE |
At 28 February 2023 |
At 28 February 2022 |
Net book value of fixed assets, included in the above, which are under hire purchase contracts £2,173,672 (2022: £1,031,589). |
10. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 March 2022 |
and 28 February 2023 |
NET BOOK VALUE |
At 28 February 2023 |
At 28 February 2022 |
The company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Registered office: |
Nature of business: |
% |
Class of shares: | holding |
£ | £ |
Aggregate capital and reserves |
LCB Maintenance Limited was dissolved on 16th May 2023. |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
11. | STOCKS |
28.2.23 | 28.2.22 |
£ | £ |
Stocks |
Work-in-progress |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
28.2.23 | 28.2.22 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Amounts recoverable on contract |
Other debtors |
Directors' current accounts | 1,428,485 | 790,061 |
Prepayments and accrued income |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
28.2.23 | 28.2.22 |
£ | £ |
Hire purchase contracts (see note 15) |
Trade creditors |
Tax |
Social security and other taxes |
VAT | 1,099,066 | 1,270,036 |
Other creditors |
Retention | 333,467 | 247,523 |
Accrued expenses |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
28.2.23 | 28.2.22 |
£ | £ |
Hire purchase contracts (see note 15) |
15. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
28.2.23 | 28.2.22 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
15. | LEASING AGREEMENTS - continued |
Non-cancellable operating | leases |
28.2.23 | 28.2.22 |
£ | £ |
Within one year |
Between one and five years |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
28.2.23 | 28.2.22 |
£ | £ |
Hire purchase contracts | 2,140,366 | 1,870,718 |
Hire purchase and finance agreements are secured upon the assets to which they relate. |
Bank loans and overdrafts are secured by a fixed charge over all company assets. |
17. | PROVISIONS FOR LIABILITIES |
28.2.23 | 28.2.22 |
£ | £ |
Deferred tax |
Accelerated capital allowances |
Deferred |
tax |
£ |
Balance at 1 March 2022 |
Provided during year |
Balance at 28 February 2023 |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 28.2.23 | 28.2.22 |
value: | £ | £ |
Ordinary | £1 | 85 | 85 |
Ordinary A | £1 | 5 | 5 |
Ordinary B | £1 | 10 | 10 |
100 | 100 |
19. | RESERVES |
Retained |
earnings |
£ |
At 1 March 2022 |
Profit for the year |
At 28 February 2023 |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
20. | PENSION COMMITMENTS |
The company operates a defined contribution scheme for certain employees and contributes to separate individual defined contribution schemes for certain directors. The assets of all schemes are held separately from those of the company in independently administered funds. |
The pension cost charge represents contributions payable by the company to the funds and amounted to £118,941 (2022 - £126,668), the amount outstanding at the year end was £40,344 (2022: £31,618). |
21. | ULTIMATE PARENT COMPANY |
Cardo Group Limited is regarded by the directors as being the company's ultimate parent company. |
22. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to directors subsisted during the years ended 28 February 2023 and 28 February 2022: |
28.2.23 | 28.2.22 |
£ | £ |
Balance outstanding at start of year |
Amounts advanced |
Amounts repaid |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
Balance outstanding at start of year |
Amounts advanced |
Amounts repaid |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
The director's loan account is repayable on demand and amounts not repaid within 9 months of the year end accrue interest at 2.5% (2022: 2.5%). |
23. | RELATED PARTY DISCLOSURES |
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 wholly owned subsidiaries within the group. |
The financial statements of the company are consolidated in the financial statements of Cardo Group Limited. These consolidated financial statements are available from its registered office, Unit 1 & 2 Stuart Close Trade Park, Cardiff. CF11 8QF. |
LCB Group Holdings Limited (Registered number: 07966669) |
Notes to the Financial Statements - continued |
for the Year Ended 28 February 2023 |
23. | RELATED PARTY DISCLOSURES - continued |
LCB Propco Limited is a related party, being a company under the control of the director Mr L Bevan. At the year end LCB Propco Limited owed the company £40,260 (2022: £40,260) |
LCB Propco 2 Limited is a related party, being a company under the control of the director Mr L Bevan. During the year the company provided a loan to LCB Propco 2 Limited of £50,000. At the year end LCB Propco 2 Ltd owed the company £377,699 (2022: £392,299). |
Tim O'Brien (Newport) Limited is a related party, being a company under the control of the director Mr L Bevan. During the year the company purchased goods and services from Tim O'Brien (Newport) Limited totalling £1,372,571. At the year end the amount owed from Tim O'Brien (Newport) Limited was £274,032 (2022:The company was owed £270,954). |
At the year end B & K Future Limited company a company in which Mr L Bevan has a 50% shareholding and is also director owed the company £735,389 (2022: £914,122). |
Floodlighting and Electrical Services Limited is a related party, being under control of the director Mr L Bevan. During the year the company made purchases totalling £35,667, the company also made sales of £ £660 to Floodlighting and Electrical Services Ltd. The amount due to Floodlighting and Electrical Services Limited at the year end was £1,290 (2022: £2,014). |
24. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party of the company at the year end was Mr L Bevan by virtue of his shareholding in LCB Construction (Holdings) Limited. |
25. | GUARANTEES |
National Westminster Bank plc holds a charge which includes fixed and floating charges over all assets and undertaking both present and future. |