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Registration number: 03986368

SBS Insurance Services Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 30 April 2023

 

SBS Insurance Services Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 5

Statement of Directors' Responsibilities

6

Independent Auditor's Report

7 to 10

Consolidated Profit and Loss Account

11

Consolidated Statement of Comprehensive Income

12

Consolidated Balance Sheet

13

Balance Sheet

14

Consolidated Statement of Changes in Equity

15

Statement of Changes in Equity

16

Consolidated Statement of Cash Flows

17

Notes to the Financial Statements

18 to 34

 

SBS Insurance Services Limited

Company Information

Directors

T Rees

P Fairbrass

S Crowley

R Rushall

Company secretary

Clever Management Solutions Limited

Registered office

Chase House
Park Plaza
Heath Hayes
Cannock
WS12 2DD

Solicitors

Knights LLP
Midland House
West Way
Botley
Oxford
OX2 0PH

Bankers

Barclays Bank Plc
1st Floor
Queen Square
Wolverhampton
WV1 1DS

Auditors

Johnson Smith & Co Ltd
Centurion House
London Road
Staines-Upon-Thames
Surrey
TW18 4AX

 

SBS Insurance Services Limited

Strategic Report for the Year Ended 30 April 2023

The directors present their strategic report for the year ended 30 April 2023.

Fair review of the business

SBS Insurance Services Limited (“SBS”) and its subsidiaries React Insurance Services Ltd (“React”) and Direct Lawn and Garden Ltd (“DLG”) - together, “the Group”, provide claims handling and other insurance related services, and predominantly operate in the household contents market.

During the year, the Group continued its emphasis on using ‘cutting edge’ technologies to maintain its competitive advantage, increasing its market share by gaining contracts from insurers against stiff competition. The Group continued to invest in significant developments involving Artificial Intelligence, Augmented Reality, Use of Bots, and overall digitisation in claims journeys. These increased productivity, reduced incidence of fraud, and simplified policyholders’ claims journeys by increasingly enabling claims to be completed on Smart Phones using AI augmented menu prompts.

SBS continues to receive awards for innovative solutions. Recent awards include Insurance Times - ‘Claims Product Solution of the Year’, Insurance Times - ‘Fraud Solution of the Year’, British Insurance Awards - the Technology Award, and the British Claims Awards - the Insurtech Award. Furthermore, SBS’ achievements in research and development have been marked by being placed in the ‘E2E 100’ top rankings in its Technology sector.

Results and performance

The Group’s financial results show considerable increases in turnover and gross profit, and net profit also increased despite the Group incurring £987,119 in exceptional expenditure, the one-off costs of restructuring following the acquisition of a business interest in April 2022.
 

y/e 30/4/21

y/e 30/4/22

y/e 30/4/23

Turnover

£23,089,932

£28,264,487

£48,688,844

Gross Profit

£4,347,279

£4,889,814

£7,945,281

EBITDA (see note)

£1,063,112

£912,157

£2,338,183

Net assets

£1,325,779

£1,437,247

£1,520,696

Note: Earnings exclude exceptional items (see note 11 to the financial statements)

Further increases in turnover and EBITDA are expected in y/e 30/4/24, arising from organic growth, the full assimilation of the acquired business interests, and by receiving full year’s benefit from claims handling contracts won during y/e 30/4/23. Administrative expenses relative to turnover are expected to decrease from the post-acquisition reorganisation and the elimination of exceptional expenditure. The Group continues to receive a strong pipeline of enquiries and growth which will further enhance performance in 2024.

Strategy

The directors are confident that the Group continues to deliver claims handling and related services at levels in keeping with the best industry standards. Strategies in y/e 30/4/24 continue to emphasise: investment in IT solutions and particularly AI solutions, developing opportunities in vertical markets, implementing measures towards achieving environmental goals, and expansion of operations into the EU where opportunities and potential are being assessed.

Business environment

The Group operates in a very competitive environment and the directors recognise the value of offering exceptional products of benefit to both insurers and insurance policyholders. Measures to achieve this include continuing development of innovative technologies that improve productivity in claims handling and further streamline policyholder claims processes.

 

SBS Insurance Services Limited

Strategic Report for the Year Ended 30 April 2023

Principal risks and uncertainties

The Group faces competitive pressure and carefully manages risks by maintaining a highly competent workforce and maintaining a leading position in its industry sector through the use of state-of-the-art technologies that provide quality services and benefits to its clients.

The Group manages complex claim handling process with demanding requirements that require co-ordination of all functions available within the organisation, the external supply chain, and other partners. Identified threats and risks are reviewed regularly by the board of directors who ensure continuous improvement of all processes to ensure that both technical and business objectives are achieved with a particular focus on mitigating of threats and risks.

Approved and authorised by the Board on 22 September 2023 and signed on its behalf by:
 

.........................................
T Rees
Director

 

SBS Insurance Services Limited

Directors' Report for the Year Ended 30 April 2023

The directors present their report and the consolidated financial statements for the year ended 30 April 2023.

Principal activity

The principal activity of the group is providing a nationwide claims handling service to Insurance Companies on Household Insurance Contents claims. This principally involves claims on Flooring, Electrical, Jewellery and Leisure Goods in the home. Most of the business is UK based, but the company is now deriving some business out of the European Market. This is a growing area of opportunity for the business.

Dividends

The total distribution of dividends for the year ended 30 April 2023 were £760,000 (2022: £650,000).

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Directors of the group

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

T Rees

P Fairbrass

S Crowley

R Rushall (appointed 1 January 2023)

Financial instruments

The Group has no financial instruments apart from cash, investments, trade debtors and trade creditors, all arising in the normal course of business. The main financial risk the Group is exposed include liquidity risk, cash flow risk and credit risk. These risks are managed by ensuring sufficient liquidity is available to meet foreseeable needs.

Donations and expenditure

During the year the Group made a charitable donation of £940 (2022: £3,184).

Research and development

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

Going concern

The directors acknowledge the Financial Reporting Council's Going Concern Guidelines and believe that the Group is well placed to manage its business risks successfully. Having reviewed the initial financial scenario planning for the year 2023/24 and beyond that has been carried out, the directors are satisfied that, at the time of approving the financial statements, there is not a material uncertainty that may cast significant doubt upon the Group's ability to continue as a going concern, and so it is appropriate to adopt the going concern basis in preparing the financial statements.

 

SBS Insurance Services Limited

Directors' Report for the Year Ended 30 April 2023

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved and authorised by the Board on 22 September 2023 and signed on its behalf by:
 

.........................................
T Rees
Director

 

SBS Insurance Services Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

SBS Insurance Services Limited

Independent Auditor's Report to the Members of SBS Insurance Services Limited

Opinion

We have audited the financial statements of SBS Insurance Services Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 group's and the parent company's affairs as at 30 April 2023 and of the group's 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 auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

SBS Insurance Services Limited

Independent Auditor's Report to the Members of SBS Insurance Services Limited

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our 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 and the Directors' Report.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company 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 6], 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 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:

 

SBS Insurance Services Limited

Independent Auditor's Report to the Members of SBS Insurance Services Limited

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism through the audit and we also;

- Identify and assess the risks of material misstatements of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk pf not detecting a material misstatement resulting from fraud is higher than for one resulting from error. As fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of the internal control.

- Obtain an understanding of the internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company's internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

- Conclude on the appropriateness of director's use of going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern and report appropriate disclosures in the accounts or in our audit report.

- Evaluate the appropriate presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieve fair presentation.

- Evaluated the conduct of operations in relation to laws and other regulations including but not limited to, intellectual property, commercial trading, data protection, money laundering, and employment. Our evaluation took account of whether any non-compliance would have a material effect on the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

SBS Insurance Services Limited

Independent Auditor's Report to the Members of SBS Insurance Services 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 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.

......................................
Maurice Brooks (Senior Statutory Auditor)
For and on behalf of Johnson Smith & Co Ltd
Chartered Accountants and Statutory Auditors
Centurion House
London Road
Staines-Upon-Thames
Surrey
TW18 4AX

22 September 2023

 

SBS Insurance Services Limited

Consolidated Profit and Loss Account for the Year Ended 30 April 2023

Note

2023
£

2022
£

Turnover

3

48,688,844

28,264,487

Cost of sales

 

(40,743,563)

(23,374,673)

Gross profit

 

7,945,281

4,889,814

Administrative expenses

 

(6,926,670)

(4,099,524)

Other operating income

4

20,974

55,101

Operating profit

6

1,039,585

845,391

Other interest receivable and similar income

2,590

4,109

Profit before tax

 

1,042,175

849,500

Tax on profit

10

(198,726)

(88,032)

Profit for the financial year

 

843,449

761,468

Profit/(loss) attributable to:

 

Owners of the company

 

843,449

761,468

The group has no recognised gains or losses for the year other than the results above.

 

SBS Insurance Services Limited

Consolidated Statement of Comprehensive Income for the Year Ended 30 April 2023

2023
£

2022
£

Profit for the year

843,449

761,468

Total comprehensive income for the year

843,449

761,468

Total comprehensive income attributable to:

Owners of the company

843,449

761,468

 

SBS Insurance Services Limited

(Registration number: 03986368)
Consolidated Balance Sheet as at 30 April 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

12

1,397,245

1,184,596

Tangible assets

13

257,086

203,291

Investments

14

50

50

 

1,654,381

1,387,937

Current assets

 

Stocks

15

1,431,547

874,357

Debtors

16

3,280,725

3,108,103

Cash at bank and in hand

 

1,152,919

1,604,000

 

5,865,191

5,586,460

Creditors: Amounts falling due within one year

18

(5,800,113)

(5,090,853)

Net current assets

 

65,078

495,607

Total assets less current liabilities

 

1,719,459

1,883,544

Creditors: Amounts falling due after more than one year

18

(136,778)

(410,346)

Provisions for liabilities

19

(61,985)

(35,951)

Net assets

 

1,520,696

1,437,247

Capital and reserves

 

Called up share capital

21

25,000

25,000

Capital redemption reserve

625

625

Retained earnings

1,495,071

1,411,622

Equity attributable to owners of the company

 

1,520,696

1,437,247

Shareholders' funds

 

1,520,696

1,437,247

Approved and authorised by the Board on 22 September 2023 and signed on its behalf by:
 

.........................................
T Rees
Director

 

SBS Insurance Services Limited

(Registration number: 03986368)
Balance Sheet as at 30 April 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

12

1,401,296

1,188,647

Tangible assets

13

248,819

190,290

Investments

14

30,150

30,150

 

1,680,265

1,409,087

Current assets

 

Stocks

15

1,415,798

845,518

Debtors

16

3,781,974

3,506,720

Cash at bank and in hand

 

995,101

1,458,067

 

6,192,873

5,810,305

Creditors: Amounts falling due within one year

18

(5,746,317)

(4,964,700)

Net current assets

 

446,556

845,605

Total assets less current liabilities

 

2,126,821

2,254,692

Creditors: Amounts falling due after more than one year

18

(136,778)

(410,346)

Provisions for liabilities

19

(61,985)

(35,951)

Net assets

 

1,928,058

1,808,395

Capital and reserves

 

Called up share capital

21

25,000

25,000

Capital redemption reserve

625

625

Retained earnings

1,902,433

1,782,770

Shareholders' funds

 

1,928,058

1,808,395

The company made a profit after tax for the financial year of £879,663 (2022 - profit of £916,195).

Approved and authorised by the Board on 22 September 2023 and signed on its behalf by:
 

.........................................
T Rees
Director

 

SBS Insurance Services Limited

Consolidated Statement of Changes in Equity for the Year Ended 30 April 2023
Equity attributable to the parent company

Share capital
£

Capital redemption reserve
£

Retained earnings
£

Total
£

At 1 May 2022

25,000

625

1,411,622

1,437,247

Profit for the year

-

-

843,449

843,449

Dividends

-

-

(760,000)

(760,000)

At 30 April 2023

25,000

625

1,495,071

1,520,696

Total equity
£

At 1 May 2022

1,437,247

Profit for the year

843,449

Dividends

(760,000)

At 30 April 2023

1,520,696

Share capital
£

Capital redemption reserve
£

Retained earnings
£

Total
£

At 1 May 2021

25,000

625

1,300,154

1,325,779

Profit for the year

-

-

761,468

761,468

Dividends

-

-

(650,000)

(650,000)

At 30 April 2022

25,000

625

1,411,622

1,437,247

Total equity
£

At 1 May 2021

1,325,779

Profit for the year

761,468

Dividends

(650,000)

At 30 April 2022

1,437,247

 

SBS Insurance Services Limited

Statement of Changes in Equity for the Year Ended 30 April 2023

Share capital
£

Capital redemption reserve
£

Retained earnings
£

Total
£

At 1 May 2022

25,000

625

1,782,770

1,808,395

Profit for the year

-

-

879,663

879,663

Dividends

-

-

(760,000)

(760,000)

At 30 April 2023

25,000

625

1,902,433

1,928,058

Share capital
£

Capital redemption reserve
£

Retained earnings
£

Total
£

At 1 May 2021

25,000

625

1,516,575

1,542,200

Profit for the year

-

-

916,195

916,195

Dividends

-

-

(650,000)

(650,000)

At 30 April 2022

25,000

625

1,782,770

1,808,395

 

SBS Insurance Services Limited

Consolidated Statement of Cash Flows for the Year Ended 30 April 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

843,449

761,468

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

311,480

66,766

Loss on disposal of tangible assets

5

-

1,706

Income tax expense

10

198,726

88,032

 

1,353,655

917,972

Working capital adjustments

 

Increase in stocks

15

(557,190)

(419,345)

Increase in trade debtors

16

(172,622)

(1,216,736)

(Decrease)/increase in trade creditors

18

(107,169)

1,699,498

Cash generated from operations

 

516,674

981,389

Income taxes paid

10

(60,300)

(107,419)

Net cash flow from operating activities

 

456,374

873,970

Cash flows from investing activities

 

Acquisitions of tangible assets

(132,935)

(203,354)

Acquisition of intangible assets

12

(14,520)

(1,193,787)

Net cash flows from investing activities

 

(147,455)

(1,397,141)

Cash flows from financing activities

 

Dividends paid

(760,000)

(650,000)

Net decrease in cash and cash equivalents

 

(451,081)

(1,173,171)

Cash and cash equivalents at 1 May

 

1,604,000

2,777,171

Cash and cash equivalents at 30 April

 

1,152,919

1,604,000

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

1

General information

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

The address of its registered office is:
Chase House
Park Plaza
Heath Hayes
Cannock
WS12 2DD

These financial statements were authorised for issue by the Board on 22 September 2023.

Principal activity
The principal activity of the company in the year under review was that of providing a nationwide claims handling service to Insurance Companies on Household Insurance Contents claims. This principally involves claims on Flooring, Electrical, Jewellery and Leisure Goods in the home.

Statement of compliance
The Company and Group's financial statements have been prepared in compliance with FRS 102 as it applies to the financial statements of the Company and the Group for the year ended 30 April 2023.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

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

The financial statements are presented in Sterling (£) which is the functional currency of the company. The amounts in financial statements are rounded up to the nearest pound.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 April 2023.

No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a profit after tax for the financial year of £879,663 (2022 - profit of £916,195).

The Group financial statements include the financial statements of the Company and its subsidiary undertakings made up to 30 April. Subsidiary undertakings which are held exclusively with a view to subsequent resale are excluded. A subsidiary is an entity controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of the entity so as to derive benefits from its activities. Any subsidiary undertakings, joint ventures or associates sold or acquired during the year are included up to, or from, the dates of change of control. All intra-group transactions, balances, income and expenses are eliminated on consolidation

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

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

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Subsidiary exempt from audit
Direct Lawn and Garden Limited and React Insurance Services Limited, 100% subsidiaries of SBS Insurance Services Limited are claiming the exemption from audit by the virtue of section 479A of the Companies Act 2006 relating to subsidiary companies for the year ended 30 April 2023. SBS Insurance Services Limited has given guarantees under section 479C of the Companies Act 2006 in respect of the year ended 30 April 2023 for its subsidiary companies, Direct Lawn and Garden Limited and React Insurance Services Limited.

Revenue recognition

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

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

Tax

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

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

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

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

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

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

Tangible assets

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

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

Depreciation

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset:

Asset class

Depreciation method and rate

Plant & Machinery

25% of cost on a straight-line basis

Fixtures & Fittings

25% of cost on a straight-line basis

Computer equipment

25% of cost on a straight-line basis

Improvements to property

25% of cost on a straight-line basis

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Amortisation of goodwill is calculated so as to write off the cost, less its estimated residual value, over the useful economic life as follows:

Goodwill - Straight-line basis over 7 years

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.


Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Fixed asset investments

Investments in unquoted securities are carried at fair value unless such value cannot be reliably measured, in which case the investments are carried at cost.

Cash and cash equivalents

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

Trade debtors

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

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

Stocks

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

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

Work in progress

Work in progress is valued on the basis of direct cost plus attributable overheads based on normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

Trade creditors

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

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

Leases

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

Share capital

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

Dividends

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

Defined contribution pension obligation

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

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

Research and development

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

Revenue recognition

Income is recognised when the significant risks and rewards of ownership of the goods and services are transferred to the customer and receipt of payment can be assured.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual agreement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
 

Loan notes

Loan notes which are basic financial instruments are initially recorded at the present value of future payments discounted at a market rate of interest for a similar loan. Subsequently, they are measured at amortised cost using the effective interest method. Loan notes that are receivable within one year are not discounted.

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

Provisions

A provision is recognised where the company has a legal or constructive obligation as a result of past event and it is possible that an outflow of economic benefit would be required to settle the obligation.

Grants

Grants are accounted for under the accrual model and classified either as a grant relating to revenue (revenue-based grant) or a grant relating to assets (capital-based grants). Grants which relate to revenue are recognised in income in the period the related costs are incurred by the entity for which the grant is intended to compensate. For grants which are received by the entity for compensation for expenses or losses which have already been incurred, the grant is recognised in income when it is received or receivable provided that the terms of the grant do not impose future performance-related conditions. Any grants that are received before the revenue recognition criteria are met are recognised in the entity's financial statements as a liability. Government grants in relation to tangible fixed asset are credited to profit and loss account over the useful lives of the related assets, whereas those in relation to expenditure are credited when the expenditure is charged to profit and loss.

3

Turnover

The analysis of the group's turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods and services

48,688,844

28,264,487

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2023
£

2022
£

Other operating income

20,974

55,101

5

Other gains and losses

The analysis of the group's other gains and losses for the year is as follows:

2023
£

2022
£

Loss on disposal of tangible assets

-

(1,706)

6

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

79,140

57,575

Amortisation expense

232,340

9,191

Research and development cost

320,093

204,667

Loss on disposal of property, plant and equipment

-

1,706

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

4,068,170

2,664,764

Social security costs

433,797

256,750

Pension costs, defined contribution scheme

56,365

36,362

4,558,332

2,957,876

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Directors

3

3

Administration, HR, finance, and information technology

9

9

Claim handlers

105

74

117

86

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

302,400

244,785

In respect of the highest paid director:

2023
£

2022
£

Remuneration

91,652

88,699

9

Auditors' remuneration

2023
£

2022
£

Other fees to auditors

Audit-related assurance services

7,900

7,900

All other non-audit services

9,030

10,567

16,930

18,467


 

10

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

172,692

60,301

Deferred taxation

Arising from origination and reversal of timing differences

26,034

27,731

Tax expense in the income statement

198,726

88,032

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 19% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

1,042,175

849,500

Corporation tax at standard rate

198,013

161,405

Effect of expense not deductible in determining taxable profit (tax loss)

8,394

2,567

Tax increase/(decrease) from effect of capital allowances and depreciation

46,695

(9,520)

Tax increase from other short-term timing differences

26,034

27,731

Tax decrease from effect of adjustment in research and development tax credit

(80,410)

(94,151)

Total tax charge

198,726

88,032

11

Exceptional Items

On 19th April 2022, the company purchased a business interest, the net assets and employees of which were transferred during the current financial year. Further to the acquisition, the board of directors completed a restructure during the financial year that resulted in reorganisation costs of £987,119. These costs are included in administrative expenses and therefore reduce Operating Profit but are considered to be one-off, non-recurring costs that have arisen from the purchase of the business interest.

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

12

Intangible assets

Group

Goodwill
 £

Computer software
£

Total
£

Cost or valuation

At 1 May 2022

1,234,342

4,720

1,239,062

Revaluations

430,469

-

430,469

Additions

-

14,520

14,520

At 30 April 2023

1,664,811

19,240

1,684,051

Amortisation

At 1 May 2022

49,746

4,720

54,466

Amortisation charge

232,037

303

232,340

At 30 April 2023

281,783

5,023

286,806

Carrying amount

At 30 April 2023

1,383,028

14,217

1,397,245

At 30 April 2022

1,184,596

-

1,184,596

The above adjustments of £430,469 are due to revision of the net asset position and the change in earn-out obligations based on the performance of the business acquired during the year ended 30.04.2022.

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

Company

Goodwill
 £

Computer software
£

Total
£

Cost or valuation

At 1 May 2022

1,193,787

-

1,193,787

Revaluations

430,469

-

430,469

Additions

-

14,520

14,520

At 30 April 2023

1,624,256

14,520

1,638,776

Amortisation

At 1 May 2022

5,140

-

5,140

Amortisation charge

232,037

303

232,340

At 30 April 2023

237,177

303

237,480

Carrying amount

At 30 April 2023

1,387,079

14,217

1,401,296

At 30 April 2022

1,188,647

-

1,188,647

The above adjustments of £430,469 are due to revision of the net asset position and the change in earn-out obligations based on the performance of the business acquired during the year ended 30.04.2022.

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

13

Tangible assets

Group

Improvements to property
£

Fixtures and fittings
£

Plant and machinery
£

Computer equipment
£

Cost or valuation

At 1 May 2022

90,772

97,687

13,646

112,741

Additions

67,220

8,104

-

57,611

Disposals

-

(4,920)

-

(3,319)

At 30 April 2023

157,992

100,871

13,646

167,033

Depreciation

At 1 May 2022

18,348

34,953

6,290

51,964

Charge for the year

25,924

22,763

2,480

27,973

Eliminated on disposal

-

(4,920)

-

(3,319)

At 30 April 2023

44,272

52,796

8,770

76,618

Carrying amount

At 30 April 2023

113,720

48,075

4,876

90,415

At 30 April 2022

72,424

62,734

7,357

60,776

Total
£

Cost or valuation

At 1 May 2022

314,846

Additions

132,935

Disposals

(8,239)

At 30 April 2023

439,542

Depreciation

At 1 May 2022

111,555

Charge for the year

79,140

Eliminated on disposal

(8,239)

At 30 April 2023

182,456

Carrying amount

At 30 April 2023

257,086

At 30 April 2022

203,291

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

Company

Improvements to property
£

Fixtures and fittings
£

Computer equipment
£

Total
£

Cost or valuation

At 1 May 2022

90,772

88,553

112,741

292,066

Additions

67,220

8,104

57,611

132,935

Disposals

-

(4,920)

(3,319)

(8,239)

At 30 April 2023

157,992

91,737

167,033

416,762

Depreciation

At 1 May 2022

18,348

31,463

51,964

101,775

Charge for the year

25,924

20,510

27,973

74,407

Eliminated on disposal

-

(4,920)

(3,319)

(8,239)

At 30 April 2023

44,272

47,053

76,618

167,943

Carrying amount

At 30 April 2023

113,720

44,684

90,415

248,819

At 30 April 2022

72,424

57,090

60,776

190,290

14

Investments

Group

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the group holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Direct Lawn and Garden Limited

Ree Place Dew Pond Lane, Tongue Lane Industrial Estate, Buxton, Derbyshire. SK17 7LF

Ordinary shares

100%

100%

 

United Kingdom

     

React Insurance Services Ltd

Unit 7, F Zone, 4 Burntwood Business Park, Burntwood. WS7 3XD

Ordinary shares

100%

100%

 

United Kingdom

     

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

Subsidiary undertakings

Direct Lawn and Garden Limited

React Insurance Services Ltd

Company

2023
£

2022
£

Investments in subsidiaries

30,100

30,100

Investments in joint ventures

50

50

30,150

30,150

Subsidiaries

£

Cost or valuation

At 1 May 2022

30,100

Provision

Carrying amount

At 30 April 2023

30,100

At 30 April 2022

30,100

Joint ventures

£

Cost

At 1 May 2022

50

Provision

Carrying amount

At 30 April 2023

50

At 30 April 2022

50

15

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Work in progress

1,407,093

823,457

1,407,093

823,457

Finished goods and goods for resale

24,454

50,900

8,705

22,061

1,431,547

874,357

1,415,798

845,518

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

16

Debtors

   

Group

Company

Current

Note

2023
£

2022
£

2023
£

2022
£

Trade debtors

 

2,852,027

2,879,083

2,827,580

2,863,930

Amounts owed by group undertakings

25

-

-

543,457

429,491

Other debtors

 

99,748

99,885

95,089

99,099

Prepayments

 

328,950

129,135

315,848

114,200

   

3,280,725

3,108,103

3,781,974

3,506,720

17

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash on hand

16

722

9

607

Cash at bank

1,152,903

1,603,278

995,092

1,457,460

1,152,919

1,604,000

995,101

1,458,067

18

Creditors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Due within one year

 

Trade creditors

 

2,136,664

1,598,089

2,110,684

1,493,440

Social security and other taxes

 

248,915

276,999

241,542

272,019

Other payables

 

880,217

455,178

873,281

453,486

Accruals

 

2,361,079

2,699,741

2,354,048

2,687,696

Corporation tax liability

10

173,238

60,846

166,762

58,059

 

5,800,113

5,090,853

5,746,317

4,964,700

Due after one year

 

Other non-current financial liabilities

 

136,778

410,346

136,778

410,346

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

19

Provisions for liabilities

Group

Deferred tax
£

Total
£

At 1 May 2022

35,951

35,951

Additional provisions

26,034

26,034

At 30 April 2023

61,985

61,985

20

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £56,365 (2022 - £36,362).

21

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

25,000

25,000

25,000

25,000

         

22

Obligations under leases and hire purchase contracts

Group

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

51,250

61,750

Later than one year and not later than five years

15,333

66,583

66,583

128,333

 

SBS Insurance Services Limited

Notes to the Financial Statements for the Year Ended 30 April 2023

23

Dividends

   

2023

 

2022

   

£

 

£

Interim dividend of £30.40 (2022 - £26.00) per ordinary share

 

760,000

 

650,000

         

24

Commitments

Group

Capital commitments

The total amount contracted for but not provided in the financial statements was £Nil (2022 - £Nil).

25

Related party transactions

Group

The group 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.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

During the year, the group received management fees of £19,974 (2022: £44,163) from a connected company under the common directorship of S Crowley. The group was owed £21,113 (2022: £3,780) by the connected company at the year-end. All transactions were at arm's length basis on normal trading terms.

26

Post balance sheet events


Group

There are no post balance sheet events which require disclosure in the financial statements for the year under review.