Company registration number 01773699 (England and Wales)
ROBERT HEATH HEATING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
ROBERT HEATH HEATING LIMITED
COMPANY INFORMATION
Directors
R B Heath
M L Heath
W McIntosh
Company number
01773699
Registered office
Heath House
264 Burlington Road
New Malden
Surrey
KT3 4NN
Auditor
Ward Williams
Belgrave House
39-43 Monument Hill
Weybridge
Surrey
KT13 8RN
Bankers
Barclays Bank
1 Churchill Place
London
E14 5HP
ROBERT HEATH HEATING LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Income statement
7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
ROBERT HEATH HEATING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The directors present their strategic report and financial statements for the year ended 30 June 2023.
Principal activity
The principal activity of the company is the service, maintenance and installation of domestic and commercial heating and hot water systems within the affordable housing sector.
Review of the business
Revenue for the financial year to 30th June 2023 was £43.4 million (2022: £34.7 million).
The business generated profit before tax of £6.8 million (2022: £4.6 million)
Some highlights of the business from the year include;
An increase in sales & profit
A continuation of its investment into staff training & upskilling in renewable technologies
Achieving high levels of customer satisfaction and compliance across all clients
Securing and onboarding new client contracts
The number of employees remained stable during the year with an average of 255. The health, safety and wellbeing of our staff and end customers remained a priority for the year and we worked to ensure all those engaged and affected by our services did so in a safe working environment.
The principal risks to the business include the competitive marketplace in which it operates, and the general uncertainty within the UK economy. Growing levels of inflation and a threat of recession create challenges for our supply chain and workforce.
In consideration of all the events in the year, the Directors were pleased with the year’s performance and remain positive with the outlook of the business.
The key financial indicators are:
2023 2022
Sales £43,404,550 £34,698,559
Gross Profit £14,137,854 £11,074,092
Gross Profit margin 32.6% 31.9%
M L Heath
Director
20 October 2023
ROBERT HEATH HEATING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
The directors present their report and financial statements for the year ended 30 June 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R B Heath
M L Heath
W McIntosh
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Disabled persons
The company's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.
Employee involvement
The company's policy is to consult and discuss with employees matters likely to affect employees' interests.
Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Auditor
The auditor, Ward Williams, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.
ROBERT HEATH HEATING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
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.
On behalf of the board
M L Heath
Director
20 October 2023
ROBERT HEATH HEATING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROBERT HEATH HEATING LIMITED
- 4 -
Opinion
We have audited the financial statements of Robert Heath Heating Limited (the 'company') for the year ended 30 June 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 30 June 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.
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.
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.
ROBERT HEATH HEATING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROBERT HEATH HEATING LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report 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 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:
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 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 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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the following were most significant: the Companies Act 2006 and UK corporate taxation laws, as well as various industry specific requirements such as Gas Safe, NICEIC and Contractors Health and Safety Assessment Scheme (CHAS).
ROBERT HEATH HEATING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROBERT HEATH HEATING LIMITED
- 6 -
identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
challenging assumptions and judgements made by management in its significant accounting estimates;
identifying and testing journal entries, in particular journal entries posted with unusual account combinations; and
assessing the extent of compliance with the relevant laws and regulations
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.
Frank Harling
Senior Statutory Auditor
For and on behalf of Ward Williams
20 October 2023
Chartered Accountants
Statutory Auditor
Belgrave House
39-43 Monument Hill
Weybridge
Surrey
KT13 8RN
ROBERT HEATH HEATING LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 7 -
2023
2022
Notes
£
£
Revenue
3
43,404,550
34,698,559
Cost of sales
(29,266,696)
(23,624,467)
Gross profit
14,137,854
11,074,092
Administrative expenses
(7,460,795)
(6,547,480)
Other operating income
3,000
41,276
Operating profit
4
6,680,059
4,567,888
Investment income
8
143,940
4,207
Finance costs
9
(21,269)
(15,546)
Profit before taxation
6,802,730
4,556,549
Tax on profit
10
(1,398,123)
(886,771)
Profit for the financial year
5,404,607
3,669,778
The income statement has been prepared on the basis that all operations are continuing operations.
ROBERT HEATH HEATING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
£
£
Profit for the year
5,404,607
3,669,778
Other comprehensive income
-
-
Total comprehensive income for the year
5,404,607
3,669,778
ROBERT HEATH HEATING LIMITED
STATEMENT OF FINANCIAL POSITION
- 9 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
11
1
Property, plant and equipment
12
517,870
575,630
Investments
13
80,000
80,000
597,871
655,630
Current assets
Inventories
15
863,679
369,256
Trade and other receivables
16
11,320,751
12,839,405
Cash and cash equivalents
11,260,993
4,166,412
23,445,423
17,375,073
Current liabilities
17
(6,918,169)
(6,299,185)
Net current assets
16,527,254
11,075,888
Total assets less current liabilities
17,125,125
11,731,518
Provisions for liabilities
18
(128,000)
(139,000)
Net assets
16,997,125
11,592,518
Equity
Called up share capital
20
1,000
1,000
Retained earnings
21
16,996,125
11,591,518
Total equity
16,997,125
11,592,518
The financial statements were approved by the board of directors and authorised for issue on 20 October 2023 and are signed on its behalf by:
M L Heath
Director
Company Registration No. 01773699
ROBERT HEATH HEATING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 July 2021
1,000
7,921,740
7,922,740
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
3,669,778
3,669,778
Balance at 30 June 2022
1,000
11,591,518
11,592,518
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
5,404,607
5,404,607
Balance at 30 June 2023
1,000
16,996,125
16,997,125
ROBERT HEATH HEATING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
26
8,243,077
(342,680)
Interest paid
(21,269)
(15,546)
Income taxes paid
(1,103,754)
(450,000)
Net cash inflow/(outflow) from operating activities
7,118,054
(808,226)
Investing activities
Purchase of intangible assets
(1)
Purchase of property, plant and equipment
(181,267)
(277,603)
Proceeds on disposal of property, plant and equipment
13,855
Interest received
143,940
4,207
Net cash used in investing activities
(23,473)
(273,396)
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
7,094,581
(1,081,622)
Cash and cash equivalents at beginning of year
4,166,412
5,248,034
Cash and cash equivalents at end of year
11,260,993
4,166,412
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -
1
Accounting policies
Company information
Robert Heath Heating Limited is a private company limited by shares incorporated in England and Wales. The registered office is Heath House, 264 Burlington Road, New Malden, Surrey, KT3 4NN.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
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.
1.3
Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
The total turnover for the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
Revenue from the sale of goods and services is recognised when the significant risks and rewards of ownership of the goods and services have passed to the buyer (usually on dispatch of the goods or completion of service), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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:
Software development
held at residual value
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation 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:
Land and buildings Leasehold
in-line with the lease period
Plant and machinery
10 years straight line
Fixtures, fittings & equipment
5 - 10 years straight line
Computer equipment
3 - 5 years straight line
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 recognised in the income statement.
Fixed asset investments 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 the income statement.
1.7
Non-current investments
Fixed Asset Investments 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 are recognised immediately in profit and loss.
1.8
Impairment of non-current assets
At each reporting end 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 estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit and loss.
If an impairment loss subsequently reverses, the carry 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 and loss.
1.9
Inventories
Inventories are stated at the lower of cost and net realisable value.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories 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
Construction contracts
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded for contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.12
Financial instruments
The Company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.
Basic financial assets, which include trade and other receivables and cash and bank balances, are measured at transaction price, less any impairment.
Other financial assets
Loans and receivables are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, 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. 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.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, are measured at transaction price.
Trade payables are obligations to pay for goods and 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.
Other financial liabilities
Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.13
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.
1.14
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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.
1.15
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
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.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
1.17
Leases
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
Grants
Grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
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
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Useful lives of property, plant and equipment
In determining appropriate depreciation rates to apply against the property, plant and equipment, the directors have used their knowledge and experience of both the company and the industry to assess the useful lives of each individual asset.
Income recognition on long term contracts
In accordance with its policy set out in note 1, the directors have used their knowledge and experience of the work being undertaken by the company around the year-end to determine the appropriate amount of revenue to recognise in a given period, based on the % completion of the job and costs incurred at that point. Revenue has then been either accrued or deferred accordingly.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Provision of the impairment of trade receivables
The company establishes a provision for the impairment of trade receivables in accordance with its policy in note 1. The recoverable amount of the receivables is compared to the carrying amount to determine the amount of impairment. These calculations require the use of estimates.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
3
Revenue
An analysis of the company's revenue is as follows:
2023
2022
£
£
Revenue analysed by class of business
Service, maintenance and installation of domestic and commercial heating and hot water systems
37,769,490
31,250,624
Electrical and fire security installation and repair works
5,635,060
3,447,935
43,404,550
34,698,559
The total turnover for the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
2023
2022
£
£
Other operating income
Grants received
-
36,946
Sundry income
3,000
4,330
Grants received in the prior year were relating to support obtained regarding the Jobs Retention Scheme which was announced in response to the Covid-19 global pandemic and restrictions that were placed on businesses as a consequence, including the Company.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Grants received
-
(36,946)
Depreciation of owned property, plant and equipment
220,273
199,036
Loss on disposal of property, plant and equipment
4,899
10,543
Operating lease charges
779,940
710,448
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,000
17,500
Fees paid to the Company's auditor for services other than the statutory audit of the Company are not disclosed since the consolidated accounts of the Company's parent, Robert Heath Group Limited, are required to disclose non-audit fees on a consolidated basis.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management and administration
115
105
Service and installation
140
132
Total
255
237
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
8,919,547
7,920,513
Social security costs
962,055
862,079
Pension costs
201,370
193,410
10,082,972
8,976,002
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
125,309
126,710
Company pension contributions to defined contribution schemes
2,685
2,685
127,994
129,395
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
8
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
143,940
4,207
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
143,940
4,207
9
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
17,762
15,546
Other finance costs:
Other interest
3,507
21,269
15,546
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,409,123
839,771
Deferred tax
Origination and reversal of timing differences
(11,000)
47,000
Total tax charge
1,398,123
886,771
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
6,802,730
4,556,549
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
1,394,280
865,744
Tax effect of expenses that are not deductible in determining taxable profit
12,985
4,818
Change in deferred tax assets/liabilities
(11,000)
47,000
Permanent capital allowances in excess of depreciation
1,858
(30,791)
Taxation for the year
1,398,123
886,771
11
Intangible fixed assets
Development Costs
£
Cost
At 1 July 2022
Additions
1
At 30 June 2023
1
Amortisation and impairment
At 1 July 2022 and 30 June 2023
Carrying amount
At 30 June 2023
1
At 30 June 2022
During the year, the company purchased from its fellow subsidiary, Robert Heath Technology Limited, the IP relating to a software development that was fully impaired by that company for a nominal value of £1, with Robert Heath Technology Limited having now ceased trading.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
12
Property, plant and equipment
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
£
Cost
At 1 July 2022
60,357
88,022
170,223
929,519
1,248,121
Additions
21,180
160,087
181,267
Disposals
(1,707)
(13,663)
(241,305)
(256,675)
At 30 June 2023
60,357
107,495
156,560
848,301
1,172,713
Depreciation and impairment
At 1 July 2022
12,177
47,376
160,989
451,949
672,491
Depreciation charged in the year
12,301
13,449
4,873
189,650
220,273
Eliminated in respect of disposals
(1,707)
(12,774)
(223,440)
(237,921)
At 30 June 2023
24,478
59,118
153,088
418,159
654,843
Carrying amount
At 30 June 2023
35,879
48,377
3,472
430,142
517,870
At 30 June 2022
48,180
40,646
9,234
477,570
575,630
13
Fixed asset investments
2023
2022
£
£
Unlisted investments
80,000
80,000
The above investments have been measured at cost less impairment. They represent investments which are not publically traded however during the year the company obtained a current valuation of the investment held and the brought forward valuation remains appropriate.
14
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
9,261,888
10,565,563
Equity instruments measured at cost less impairment
80,000
80,000
9,341,888
10,645,563
Carrying amount of financial liabilities
Measured at amortised cost
5,187,963
4,550,049
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
15
Inventories
2023
2022
£
£
Work in progress
395,301
146,908
Finished goods and goods for resale
468,378
222,348
863,679
369,256
16
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
7,104,383
8,835,567
Amount due from parent undertaking
2,154,285
1,717,996
Other receivables
3,220
12,000
Prepayments and accrued income
2,058,863
2,273,842
11,320,751
12,839,405
Trade receivables disclosed above are measured at amortised cost.
17
Current liabilities
2023
2022
£
£
Trade payables
4,165,520
3,451,648
Corporation tax
908,350
602,981
Other taxation and social security
821,856
1,146,155
Other payables
1,323
33,839
Accruals and deferred income
1,021,120
1,064,562
6,918,169
6,299,185
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
ACAs
128,000
139,000
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
18
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 July 2022
139,000
Credit to profit or loss
(11,000)
Liability at 30 June 2023
128,000
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
201,370
193,410
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.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
21
Retained earnings
2023
2022
£
£
At the beginning of the year
11,591,518
7,921,740
Profit for the year
5,404,607
3,669,778
At the end of the year
16,996,125
11,591,518
22
Financial commitments, guarantees and contingent liabilities
At the year end the company had an invoice discounting facility in place with Shawbrook Bank Limited. It was secured by a composite guarantee and debenture being a fixed charge over the fixed and current assets of the company, its parent, Robert Heath Group Limited and its fellow subsidiaries Robert Heath Technology Limited and Robert Heath Property Services Limited. This included a security over 264 Burlington Road, New Malden, Surrey (asset of which is held in the parent company).
This facility has been ceased since the year-end on 14th July 2023, with the relevant charges now removed.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
23
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
660,022
319,444
Between two and five years
838,608
134,616
1,498,630
454,060
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
127,994
129,395
Transactions with related parties
During the year, the company purchased IT equipment and services totalling £1,430,164 (2022: £1,433,943) from Ionize Limited, a company which is controlled by a director and former director. During the year, the company sold fixed assets of £9,089 (2022: £nil) to Ionize Limited. At the year-end a balance of £83,191 (2022: £116,626) was owed to Ionize Limited by the company.
The company has taken advantage of the exemption conferred by FRS102 section 33 from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared.
25
Ultimate controlling party
The ultimate parent company is Robert Heath Group Limited, a company registered in England and Wales. The consolidated financial statements of Robert Heath Group Limited can be obtained from Heath House, 264 Burlington Road, New Malden, Surrey, KT3 4NN.
The ultimate controlling party is R B Heath, a director of the company.
ROBERT HEATH HEATING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 25 -
26
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
5,404,607
3,669,778
Adjustments for:
Taxation charged
1,398,123
886,771
Finance costs
21,269
15,546
Investment income
(143,940)
(4,207)
Loss on disposal of property, plant and equipment
4,899
10,543
Depreciation and impairment of property, plant and equipment
220,273
199,036
Movements in working capital:
(Increase) in inventories
(494,423)
(83,781)
Decrease/(increase) in trade and other receivables
1,518,654
(4,276,584)
Increase/(decrease) in trade and other payables
313,615
(759,782)
Cash generated from/(absorbed by) operations
8,243,077
(342,680)
27
Analysis of changes in net funds
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
4,166,412
7,094,581
11,260,993
ROBERT HEATH HEATING LIMITED
MANAGEMENT INFORMATION
FOR THE YEAR ENDED 30 JUNE 2023
2023-06-302022-07-01falseCCH SoftwareCCH Accounts Production 2023.300No description of principal activityR B HeathM L HeathW McIntoshfalse017736992022-07-012023-06-3001773699bus:Director12022-07-012023-06-3001773699bus:Director22022-07-012023-06-3001773699bus:Director32022-07-012023-06-3001773699bus:RegisteredOffice2022-07-012023-06-30017736992023-06-30017736992021-07-012022-06-3001773699core:RetainedEarningsAccumulatedLosses2021-07-012022-06-3001773699core:RetainedEarningsAccumulatedLosses2022-07-012023-06-3001773699core:OtherResidualIntangibleAssets2023-06-3001773699core:OtherResidualIntangibleAssets2022-06-3001773699core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-06-3001773699core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-06-30017736992022-06-3001773699core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-06-3001773699core:PlantMachinery2023-06-3001773699core:FurnitureFittings2023-06-3001773699core:ComputerEquipment2023-06-3001773699core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-06-3001773699core:PlantMachinery2022-06-3001773699core:FurnitureFittings2022-06-3001773699core:ComputerEquipment2022-06-3001773699core:CurrentFinancialInstrumentscore:WithinOneYear2023-06-3001773699core:CurrentFinancialInstrumentscore:WithinOneYear2022-06-3001773699core:CurrentFinancialInstruments2023-06-3001773699core:CurrentFinancialInstruments2022-06-3001773699core:ShareCapital2023-06-3001773699core:ShareCapital2022-06-3001773699core:RetainedEarningsAccumulatedLosses2023-06-3001773699core:RetainedEarningsAccumulatedLosses2022-06-3001773699core:ShareCapital2021-06-3001773699core:RetainedEarningsAccumulatedLosses2021-06-30017736992021-06-3001773699core:RetainedEarningsAccumulatedLosses2022-06-30017736992022-06-3001773699core:IntangibleAssetsOtherThanGoodwill2022-07-012023-06-3001773699core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-07-012023-06-3001773699core:PlantMachinery2022-07-012023-06-3001773699core:FurnitureFittings2022-07-012023-06-3001773699core:ComputerEquipment2022-07-012023-06-300177369912022-07-012023-06-300177369912021-07-012022-06-3001773699core:UKTax2022-07-012023-06-3001773699core:UKTax2021-07-012022-06-3001773699core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-06-3001773699core:DevelopmentCostsCapitalisedDevelopmentExpenditurecore:ExternallyAcquiredIntangibleAssets2022-07-012023-06-3001773699core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-06-3001773699core:PlantMachinery2022-06-3001773699core:FurnitureFittings2022-06-3001773699core:ComputerEquipment2022-06-3001773699core:Non-currentFinancialInstrumentscore:UnlistedNon-exchangeTraded2023-06-3001773699core:Non-currentFinancialInstrumentscore:UnlistedNon-exchangeTraded2022-06-3001773699core:FinancialAssetsCostLessImpairment2023-06-3001773699core:FinancialAssetsCostLessImpairment2022-06-3001773699core:WithinOneYear2023-06-3001773699core:WithinOneYear2022-06-3001773699core:BetweenTwoFiveYears2023-06-3001773699core:BetweenTwoFiveYears2022-06-3001773699bus:PrivateLimitedCompanyLtd2022-07-012023-06-3001773699bus:FRS1022022-07-012023-06-3001773699bus:Audited2022-07-012023-06-3001773699bus:FullAccounts2022-07-012023-06-30xbrli:purexbrli:sharesiso4217:GBP