REGISTERED NUMBER: |
Strategic Report, Directors' Report and |
Audited Financial Statements for the Year Ended 30 June 2023 |
for |
Wordsworth Excavations Limited |
REGISTERED NUMBER: |
Strategic Report, Directors' Report and |
Audited Financial Statements for the Year Ended 30 June 2023 |
for |
Wordsworth Excavations Limited |
Wordsworth Excavations Limited (Registered number: 04786614) |
Contents of the Financial Statements |
for the Year Ended 30 June 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Directors' Report | 6 |
Report of the Independent Auditors | 8 |
Income Statement | 11 |
Other Comprehensive Income | 12 |
Balance Sheet | 13 |
Statement of Changes in Equity | 14 |
Cash Flow Statement | 15 |
Notes to the Cash Flow Statement | 16 |
Notes to the Financial Statements | 18 |
Wordsworth Excavations Limited |
Company Information |
for the Year Ended 30 June 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
INDEPENDENT AUDITORS: |
Statutory Auditor |
68 Queen Street |
Sheffield |
South Yorkshire |
S1 1WR |
BANKERS: |
1A Peel Square |
Barnsley |
South Yorkshire |
S70 2PL |
Wordsworth Excavations Limited (Registered number: 04786614) |
Strategic Report |
for the Year Ended 30 June 2023 |
The directors present their strategic report for the year ended 30 June 2023. |
REVIEW OF BUSINESS |
During the year the company continued to operate within the construction industry, with the majority of sales relating to preparation and development of sites and excavation works in the UK. |
Turnover remained inline with the previous year, which is due to our customer base remaining very stable, and is testament to the company's strong performance and excellent relationships. The Gross Profit Margin increased from 28.4% to 35.0%, the main reason being improvements in efficiency which have been achieved by investing in a highly skilled workforce while also providing the best in class equipment available in the market. |
The company's key financial and other performance indicators during the year were as follows: |
Unit | 2023 | 2022 |
Turnover | £'000 | 38,267 | 38,769 |
Turnover growth | % | (1.30 | ) | 40.9 |
Gross profit margin | % | 35.0 | 28.4 |
Profit before tax | £'000 | 3,257 | 2,500 |
The increase in administrative expenses has been mainly driven by inflation which has resulted in higher employee costs and other expenses; however, the directors are satisfied with their current level. There have been no exceptional items within the year. |
Since the year end the company has seen turnover continue at consistent levels, we are still winning new projects with new and existing customers and expect turnover for the current year to be in line with the previous year. We also expect our margins to remain robust throughout the new year as we continue to focus on efficiencies and productivity. |
Finally, the directors recognise that with the continued rise of interest rates, that it is in the best interest of the company to concentrate on debt reduction within the medium term whilst maintaining and improving profitability. The company's KPI's remain the same for the coming period. |
1. Overall Profitability |
2. Project Profitability |
3. Debt Reduction |
4. Employee Turnover and Retention |
5. Health & Safety Performance |
6. Sustainability |
Wordsworth Excavations Limited (Registered number: 04786614) |
Strategic Report |
for the Year Ended 30 June 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The main factors outside our control include the actions of our competitors, government policy and the macroeconomic environment. Our directors and senior management regularly review the competitive threats we face in order to identify the appropriate actions to be taken. |
On writing this report we do appreciate that there is still a degree of economic uncertainty within the UK with the Bank of England increasing its base interest rate on numerous occasions over the past 14 months. There is also the continuing war in Ukraine which has the potential to send shock waves through the world's financial system. However, neither of these events is currently having a material impact on our current performance, and we fully expect to achieve the plans for the current financial year. Our directors continually keep abreast of economic developments both positive and negative which enables swift and decisive decision making for the betterment of the company. |
The main factors within our control are, our internal operations, and the recruitment, retention and training of the workforce with the appropriate skills necessary to provide the high-level services required to retain key customers. We also continue to invest in the best equipment that is available to our industry. |
SECTION 172(1) STATEMENT |
Set out below is the Company's section 172 report as required by the Regulations. The Regulations require Wordsworth Excavations Ltd to report how the Directors of the Company have considered their duties under section 172 (of the Companies Act 2006 (the "Act")) ("Section 172"), to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard to: |
a) the likely consequences of any decisions in the long term; refer to "Review Of The Business" "The Future" |
b) the interests of the company's employees; refer to "Employee Engagement & Wellbeing" and "Health & Safety" |
c) the need to foster the company's business relationships with suppliers, customers and others; refer to "The Future" and "Carbon Reduction" |
d) the impact of the company's operations on the community and the environment; refer to "Carbon Reduction" |
e) the reputation for a high standard of business conduct; this is covered in "Review of the Business" "The Future" and "Carbon Reduction" |
f) the need to act fairly between members of the company; this is summarised below: |
The company recognises the importance of maintaining strong relationships with its key stakeholders (employees, customers, suppliers, lenders) in order to create sustainable long-term growth, and the directors believe in open dialogue and transparency with all its stakeholder groups. This in turn builds trust which is one of the foundations of our business strategy. |
The Board of Directors is responsible for setting the company's strategy and the reporting and monitoring of its overall performance. The Board believes that by engaging with its stakeholders, ultimately ensures the proper discharge of their duties under section 172 (1). |
EMPLOYEE ENGAGEMENT AND DECISION MAKING |
Employee retention is a fundamental requirement of the business. We recognise that attracting, training, developing and ultimately retaining our workforce is a necessity for our business ethos. We give great value to the opinions of our employees, and we involve our workforce in many of our decision making activities as we see them as our greatest asset. The great service we provide to our customers can only be achieved by having a truly motivated and adaptable workforce working to the best of their abilities at all times. We invest heavily in the best training available to ensure that our employees are kept up to date will the latest knowledge and practices, ensuring excellence performance day in, day out. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Strategic Report |
for the Year Ended 30 June 2023 |
STREAMLINED ENERGY AND CARBON REPORTING |
In accordance with the requirements of The Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 the Members would like to disclose the following information for the calendar year 2022: |
Type of Emission | Activity | MWh | tCO2e |
Scope 1 | Transport | 32,021.7 | 7,783.8 |
Subtotal | 32,021.7 | 7,783.8 |
Scope 2 | Grid Supplied Electricity | 71.4 | 13.8 |
Subtotal | 71.4 | 13.8 |
Scope 3 | Grey Fleet | 250.7 | 60.1 |
Supplier Transport | 1,662.0 | 427.6 |
Subtotal | 1,912.7 | 487.7 |
Total | 34,005.8 | 8,285.3 |
As specified above, the information presented is for the calendar year 2022. The directors believe that whilst this is not in line with the company accounting period, it is still considered to be relevant. The directors will continue to prepare reports in line with the calendar year going forwards and as such this information will be comparable. |
Intensity Ratios |
Energy intensity: 888.7 MWh / £million Revenue |
Emissions intensity: 216.5 tCO2e / £million Revenue |
Methodology |
The methodology for the calculation of the CO2 equivalent emissions and energy consumption is based on the Greenhouse Gas Protocol Corporate Accounting Standard, the 2019 UK Government Environmental Reporting Guidelines, and the UK Government published greenhouse gas emission and energy factors for 2022. The operational control approach has been applied. |
Energy Efficient Actions |
There has been continued investment in new plant to maintain a modern fleet with high energy efficiency and that provides telemetric data. This promotes efficient plant deployment and operation and so helps to improve energy efficiency and reduce emissions intensity. |
THE FUTURE |
The director's ambitions are to expand the business in our current core market whilst seeking to diversify strategically into other growth areas where we can utilise our existing skill sets. Given that our workforce is based throughout the UK we see opportunities for us to further nurture relationships with existing and new clients alike in geographical locations that have been restricted to us thus far. Our proven track record will enable us to grow as a specialist contractor inline with our clients' requirements. Due to the fact we are a strategic supply chain partner for some of the largest main contractors in the UK construction sector, we see excellent potential over the coming years. We also see the construction sector as a whole, being one of the key contributors to the upturn in economic growth within the UK. Finally, we recognise that Customer and Supplier relationships are key to our economic growth and as such we will continue to invest time and energy to ensure that we are as important to them as they are to us. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Strategic Report |
for the Year Ended 30 June 2023 |
CARBON REDUCTION |
Wordsworth Excavations recognise that our activities in the construction sector have consequences to the carbon footprint not only of our business but to the communities where the projects we deliver are based. We have been involved for some time now in ensuring that we reduce the carbon omitted in the delivering of the contracts that we are awarded. We intend in the coming months to be somewhat pioneering in our approach to delivering sustainable earthworks to logistics, distribution, infrastructure and highways projects throughout the UK. We aim to be market leading in the modern approaches to both implementing the reduction and then ultimately accurately recording the amount of CO2 created. From here we aim to take the ultimate step by ensuring that we become a Carbon Neutral business. We see this as a fundamental non negotiable path to creating the environment that we all wish to inhabit. By engaging with our customers, suppliers and workforce we as stakeholders to these projects share a desire and a vision to deliver this and do whatever is necessary to reach our desired goals. |
HEALTH & SAFETY |
The Company operates in an industry where health and safety risks are prominent day to day. The Company is also subject to stringent regulations from a health and safety perspective. A serious health and safety incident would not only have a significant effect on the people involved but also on the company's reputation and most probably its financial performance. The company invests heavily in its Health & Safety procedures and recently recruited a Health & Safety Manager who's sole responsibility is the safety of our employees and the employees of our customers. Employees complete formal training on regular intervals and are required to obtain certificates which prove their competence to carry our procedures in a safe manner. The strong Health & Safety culture is driven by the Managing Director right down through all the levels of the company. The overall result of our Health & Safety Strategy is seen within our current H&S record which is exemplary. |
We also believe that our ability to retain our employees is directly influenced by the above and as such means that our performance on site remains and the highest level which again enhances our Health & Safety Performance. |
ON BEHALF OF THE BOARD: |
Wordsworth Excavations Limited (Registered number: 04786614) |
Directors' Report |
for the Year Ended 30 June 2023 |
The directors present their report with the financial statements of the company for the year ended 30 June 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of ground engineering, specialising in demolition, site clearance and preparation for development and excavation. |
DIVIDENDS |
A dividend of £700,000 was paid in the year (2022 - £1,400,000). |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 July 2022 to the date of this report. |
FINANCIAL INSTRUMENTS |
The business' principal financial instrument comprise bank balances, trade debtors, trade creditors and hire purchase agreements. The main purpose of these instruments is to finance the business' operations. |
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest. |
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors. |
Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. |
The business is a lessee in respect of assets under hire purchase agreements. The liquidity risk in respect of these is managed by ensuring that are are sufficient funds to meet the payments due. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Directors' 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable 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. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Directors' Report |
for the Year Ended 30 June 2023 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Landin Wilcock & Co, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Wordsworth Excavations Limited |
Opinion |
We have audited the financial statements of Wordsworth Excavations Limited (the 'company') for the year ended 30 June 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 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. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Report of the Independent Auditors to the Members of |
Wordsworth Excavations Limited |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the 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 where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on pages six and seven, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Wordsworth Excavations Limited |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
- minimal reliance was placed upon the operating effectiveness of internal controls in the design and performance of our substantive procedures; |
- discussions were held with management considering known or suspected non-compliance with laws, regulations and fraud; |
- journal entries were reviewed for any entries made outside the ordinary reporting processes with particular emphasis on those with unusual account combinations, entries crediting revenue and those without specific descriptions; |
- management assumptions in their significant accounting estimates were challenged and scrutinised. |
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditor |
68 Queen Street |
Sheffield |
South Yorkshire |
S1 1WR |
Wordsworth Excavations Limited (Registered number: 04786614) |
Income Statement |
for the Year Ended 30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT | 5 |
Interest payable and similar expenses | 6 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 7 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
Wordsworth Excavations Limited (Registered number: 04786614) |
Other Comprehensive Income |
for the Year Ended 30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Wordsworth Excavations Limited (Registered number: 04786614) |
Balance Sheet |
30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
CREDITORS |
Amounts falling due within one year | 12 | ( |
) | ( |
) |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 17 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Capital redemption reserve | 19 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Wordsworth Excavations Limited (Registered number: 04786614) |
Statement of Changes in Equity |
for the Year Ended 30 June 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 July 2021 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 30 June 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 30 June 2023 |
Wordsworth Excavations Limited (Registered number: 04786614) |
Cash Flow Statement |
for the Year Ended 30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase payments paid |
( |
) |
( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Net cash from investing activities |
Cash flows from financing activities |
Hire purchase repayments | ( |
) | ( |
) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
(337,149 |
) |
682,996 |
Cash and cash equivalents at end of year | 2 | ( |
) | ( |
) |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Cash Flow Statement |
for the Year Ended 30 June 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
30/6/23 | 30/6/22 |
£ | £ |
Profit before taxation |
Depreciation charges |
Loss/(profit) on disposal of fixed assets | ( |
) |
Finance costs | 568,713 | 299,714 |
7,321,493 | 5,351,458 |
Decrease/(increase) in stocks | ( |
) |
(Increase)/decrease in trade and other debtors | ( |
) |
Increase/(decrease) in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 30 June 2023 |
30/6/23 | 1/7/22 |
£ | £ |
Bank overdrafts | ( |
) | ( |
) |
Year ended 30 June 2022 |
30/6/22 | 1/7/21 |
£ | £ |
Cash and cash equivalents | - | 682,996 |
Bank overdrafts | ( |
) |
(337,149 | ) | 682,996 |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Cash Flow Statement |
for the Year Ended 30 June 2023 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
Other |
non-cash |
At 1/7/22 | Cash flow | changes | At 30/6/23 |
£ | £ | £ | £ |
Net cash |
Bank overdrafts | (337,149 | ) | (244,193 | ) | (581,342 | ) |
(337,149 | ) | ( |
) | (581,342 | ) |
Debt |
Finance leases | (11,418,831 | ) | 5,982,290 | (6,489,205 | ) | (11,925,746 | ) |
(11,418,831 | ) | 5,982,290 | (6,489,205 | ) | (11,925,746 | ) |
Total | (11,755,980 | ) | 5,738,097 | (6,489,205 | ) | (12,507,088 | ) |
4. | MAJOR NON-CASH TRANSACTIONS |
During the year £6,489,205 (2022 - £7,552,135) of tangible fixed assets were acquired under hire purchase or finance leasing arrangements. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements |
for the Year Ended 30 June 2023 |
1. | STATUTORY INFORMATION |
Wordsworth Excavations Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Significant judgements and estimates |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
Plant and machinery is a highly material balance within the financial statements. As a result of this the depreciation charge on the assets has a significant impact upon the reported profitability of the company. The charge is sensitive to changes in the estimated useful economic lives and residual values of the assets. These are reviewed annually to reflect current estimated economic utilisation, physical condition and planned de-commissions. The carrying amount of assets involving significant judgement is £19,453,337 (2022 - £18,417,724). |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
The company values works done for a period of time and then applies for payment based upon the assessed valuation. Revenue is recognised on the valuations in line with the period in which the works were undertaken. |
Tangible fixed assets |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Tangible fixed assets are initially measured at cost. Subsequently, they are measured at cost less accumulated depreciation and impairment losses. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
All of the company's financial instruments may be classified as basic and are accounted for in accordance with section 11 of FRS 102 - 'Basic Financial Instruments'. The accounting policies for the key financial instruments of the company are set out below. |
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 services performed in the ordinary course of business. |
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. |
Trade creditors |
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities. |
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
2. | ACCOUNTING POLICIES - continued |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
30/6/23 | 30/6/22 |
£ | £ |
An analysis of turnover by geographical market is given below: |
30/6/23 | 30/6/22 |
£ | £ |
United Kingdom |
4. | EMPLOYEES AND DIRECTORS |
30/6/23 | 30/6/22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
4. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
30/6/23 | 30/6/22 |
Operations | 98 | 94 |
Administration and support | 29 | 28 |
Directors | 4 | 4 |
30/6/23 | 30/6/22 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
Information regarding the highest paid director is as follows: |
30/6/23 | 30/6/22 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
30/6/23 | 30/6/22 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Loss/(profit) on disposal of fixed assets | ( |
) |
Auditors' remuneration |
Other non- audit services |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
30/6/23 | 30/6/22 |
£ | £ |
Bank interest |
Interest payable | ( |
) |
Hire purchase |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
30/6/23 | 30/6/22 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Deferred tax |
Tax on profit |
UK corporation tax has been charged at 19% . |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
30/6/23 | 30/6/22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods |
Changes in tax rates | 129,333 | 30,195 |
Research and development credits | (533,075 | ) | - |
Total tax charge | 339,232 | 125,811 |
Deferred taxation in the financial statements has been provided at 25%, being the main rate of tax that has been substantively enacted at the balance sheet date which will be applicable for the reversal of timing differences. |
8. | DIVIDENDS |
30/6/23 | 30/6/22 |
£ | £ |
A Ordinary shares of £1 each |
Interim |
B Ordinary shares of £1 each |
Interim |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor |
machinery | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 July 2022 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) |
At 30 June 2023 |
DEPRECIATION |
At 1 July 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) |
At 30 June 2023 |
NET BOOK VALUE |
At 30 June 2023 |
At 30 June 2022 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and | Motor |
machinery | vehicles | Totals |
£ | £ | £ |
COST |
At 1 July 2022 |
Additions |
Transfer to ownership | (1,692,625 | ) | (28,141 | ) | (1,720,766 | ) |
At 30 June 2023 |
DEPRECIATION |
At 1 July 2022 |
Charge for year |
Transfer to ownership | (598,548 | ) | 9,674 | (588,874 | ) |
At 30 June 2023 |
NET BOOK VALUE |
At 30 June 2023 |
At 30 June 2022 |
Assets under hire purchase agreements are pledged as security for the agreement to which they relate. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
10. | STOCKS |
30/6/23 | 30/6/22 |
£ | £ |
Stocks |
11. | DEBTORS |
30/6/23 | 30/6/22 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Other debtors |
Tax |
VAT |
Prepayments |
Amounts falling due after more than one year: |
Trade debtors |
Aggregate amounts |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30/6/23 | 30/6/22 |
£ | £ |
Bank loans and overdrafts (see note 14) |
Hire purchase contracts (see note 15) |
Trade creditors |
Social security and other taxes |
Other creditors |
Accrued expenses |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
30/6/23 | 30/6/22 |
£ | £ |
Hire purchase contracts (see note 15) |
14. | LOANS |
An analysis of the maturity of loans is given below: |
30/6/23 | 30/6/22 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank overdrafts |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
15. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
30/6/23 | 30/6/22 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable | operating leases |
30/6/23 | 30/6/22 |
£ | £ |
Within one year |
Between one and five years |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
30/6/23 | 30/6/22 |
£ | £ |
Bank overdrafts |
Hire purchase contracts | 11,925,746 | 11,418,831 |
The bank overdraft is secured through a debenture over the fixed and floating assets of the company. |
The hire purchase and finance lease liabilities are secured by the assets to which the agreements relate. |
17. | PROVISIONS FOR LIABILITIES |
30/6/23 | 30/6/22 |
£ | £ |
Deferred tax | 2,936,886 | 2,064,579 |
Deferred |
tax |
£ |
Balance at 1 July 2022 |
Charge to Income Statement during year |
Balance at 30 June 2023 |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 30/6/23 | 30/6/22 |
value: | £ | £ |
A Ordinary | £1 | 82 | 82 |
B Ordinary | £1 | 18 | 18 |
100 | 100 |
Each class of share has full and equal voting rights, with the right to receive dividends. |
19. | RESERVES |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£ | £ | £ |
At 1 July 2022 | 9,133,718 |
Profit for the year |
Dividends | ( |
) | ( |
) |
At 30 June 2023 | 11,351,618 |
Retained earnings are the accumulated earnings and losses of the company, net of dividends and transfers. |
Capital redemption reserve is the nominal value of the historic purchase of own shares by the company. |
20. | RELATED PARTY DISCLOSURES |
Wordsworth Crushing Limited |
The company is a related party as director of Wordsworth Excavations Limited, Mr T Wordsworth, has joint control of the company alongside close family members. |
Related party transactions with the company primarily are the hire of plant and machinery. During the period, £326,705 of sales were made to the company. |
At the balance sheet date £131,801 was owed by Wordsworth Crushing Limited. |
Wordsworth Excavations Holdings Limited |
The company is a related party as it is under the control of Mr T Wordsworth. |
At the balance sheet date £1,850,000 was owed by Wordsworth Excavations Holdings Limited in relation to a loan advanced by Wordsworth Excavations Limited. |
Wordsworth Excavations Limited (Registered number: 04786614) |
Notes to the Financial Statements - continued |
for the Year Ended 30 June 2023 |
21. | CONTROL |
The controlling party is Mr Thomas Stephen Wordsworth. |
The ultimate controlling party is |