Company Registration No. 03133574 (England and Wales)
SWIFT SCAFFOLDING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
SWIFT SCAFFOLDING LIMITED
COMPANY INFORMATION
Directors
N Moye
C Moye
Secretary
C Moye
Company number
03133574
Registered office
North Lane
Marks Tey
Essex
CO6 1EG
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
Business address
North Lane
Marks Tey
Essex
C06 1EG
SWIFT SCAFFOLDING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
SWIFT SCAFFOLDING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Fair review of the business
The Directors are pleased with the performance achieved in this financial year. Turnover increased in the year by 18.12% to £13.59m whilst also increasing the gross profit margin by 3.64% achieving a gross profit of £2,745,719 (2022 - £1,905,903). This year has been productive in what remains a very challenging and competitive market, we have been successful in securing a strong forward order book with our long-standing clients and are pleased to have secured a number of projects with new clients ensuring continuity of work as we continue with our sustainable growth plans. We continue to diversify our workload across multiple sectors within the industry to ensure stability during what is currently a volatile market.
Cash collection remains strong throughout the year with cash at the bank increasing from £1.14m in 2022 to £2.03m in 2023 despite considerable increases experienced with our insurances and motor running expenses. We have continued our investment in new stock and invested in renewing both our HGV and commercial vehicle fleet.
We have achieved FORS Gold status for the ninth consecutive year ensuring safe and sustainable delivery to our projects.
Principal risks and uncertainties
The business continues to have a diverse pipeline of works, tendering across several key markets to help spread risk and mitigate any downturn in the construction sector.
In addition, the business works with a wide spread of main contractors, house builders and developers. The business continues to support long term relationships with our clients which in turn has led to continued repeat business.
The company's workforce remains stable despite the economic uncertainty but this remains a key risk to the business.
Key performance indicators
The board monitors and controls the performance of the company using a number of financial key performance indicators which focus on turnover, profitability and cash generation on a project-by-project basis. The performance of each project is kept under constant review via a number of monthly meetings and action is taken where a project is not performing as expected.
2023 2022
Turnover £13.6m £11.5m
Gross Profit £2.7m £1.9m
Net cashflow from operating activities £2.4m £1.9m
Financial instruments
Treasury operations and financial instruments
The company operates a treasury function which is responsible for managing the liquidity and interest risks associated with the company’s activities.
The company manages interest rate risks arising from the company's activities, and bank overdrafts and loans, the main purpose of which is to raise finance for the company's operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
SWIFT SCAFFOLDING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to fair value interest rate risk on its borrowings and cash flow interest rate risk on bank overdrafts and loans. The company manages the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.
Credit risk
Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors and retentions are reviewed on a regular basis and provision is made for doubtful debts where necessary.
Future prospects
The directors expect the company to continue to be profitable in the coming year, resulting from further investment, engagement and retention of key personnel and commitment to delivering excellence without compromise.
C Moye
Director
22 November 2023
SWIFT SCAFFOLDING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
The directors present their report and financial statements for the year ended 31 May 2023.
Principal activities
The principal activity of the company continued to be that of the supply, erection, and dismantle of scaffolding and access in the construction industry.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
N Moye
C Moye
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £550,516. The directors do not recommend payment of a final dividend.
Auditor
In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing 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). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk disclosures, future developments and subsequent events.
SWIFT SCAFFOLDING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
C Moye
Director
22 November 2023
SWIFT SCAFFOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SWIFT SCAFFOLDING LIMITED
- 5 -
Opinion
We have audited the financial statements of Swift Scaffolding Limited (the 'company') for the year ended 31 May 2023 which comprise of the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 FRS 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 31 May 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SWIFT SCAFFOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SWIFT SCAFFOLDING LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Capability of the audit in detecting irregularity, including fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
SWIFT SCAFFOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SWIFT SCAFFOLDING LIMITED
- 7 -
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; data protection legislation; anti-bribery and anti-corruption legislation; construction industry and building site operation regulations.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates in particular: cut-off, valuation and recoverability of debtors, and depreciation;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting any revenue account; and scrutiny of large or unusual journal entries;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis; and
Discussions with management.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
SWIFT SCAFFOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SWIFT SCAFFOLDING LIMITED
- 8 -
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.
Joanna Southon
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
22 November 2023
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
SWIFT SCAFFOLDING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
13,594,932
11,509,223
Cost of sales
(10,849,213)
(9,603,320)
Gross profit
2,745,719
1,905,903
Administrative expenses
(1,318,932)
(1,145,762)
Other operating income
5,960
5,520
Operating profit
4
1,432,747
765,661
Interest receivable and similar income
451
Interest payable and similar expenses
7
(54,787)
(5,300)
Profit before taxation
1,377,960
760,812
Tax on profit
8
(356,356)
(55,288)
Profit for the financial year
1,021,604
705,524
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SWIFT SCAFFOLDING LIMITED
BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
6,131,155
6,370,293
Current assets
Debtors
11
2,238,587
2,262,840
Cash at bank and in hand
2,034,454
1,140,274
4,273,041
3,403,114
Creditors: amounts falling due within one year
13
(1,685,036)
(1,569,536)
Net current assets
2,588,005
1,833,578
Total assets less current liabilities
8,719,160
8,203,871
Creditors: amounts falling due after more than one year
14
(110,946)
(317,145)
Provisions for liabilities
Deferred tax liability
15
970,400
720,000
(970,400)
(720,000)
Net assets
7,637,814
7,166,726
Capital and reserves
Called up share capital
17
2
2
Share premium account
112,498
112,498
Profit and loss reserves
18
7,525,314
7,054,226
Total equity
7,637,814
7,166,726
The financial statements were approved by the board of directors and authorised for issue on 22 November 2023 and are signed on its behalf by:
C Moye
Director
Company Registration No. 03133574
SWIFT SCAFFOLDING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 June 2021
2
112,498
6,387,055
6,499,555
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
-
705,524
705,524
Dividends
9
-
-
(38,353)
(38,353)
Balance at 31 May 2022
2
112,498
7,054,226
7,166,726
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
1,021,604
1,021,604
Dividends
9
-
-
(550,516)
(550,516)
Balance at 31 May 2023
2
112,498
7,525,314
7,637,814
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
1
Accounting policies
Company information
Swift Scaffolding Limited is a private company limited by shares incorporated in England and Wales. The registered office is .
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of Swift Scaffolding Holdings Limited. These consolidated financial statements are available from its registered office, North Lane, Marks Tey, Colchester, Essex, England, CO6 1EG.
1.2
Going concern
The accounts have been prepared under the going concern basis.true
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for at least the next twelve months. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account discounts.
Profit is recognised on long-term contracts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses. Turnover is shown as the total amount of work certified as having been done in that period. Where a loss is expected on a long term contract, the loss is provided for in full.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
10% straight line
Scaffolding equipment
10% straight line
Fixtures, fittings & equipment
33% straight line
Motor vehicles
25% straight line
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 13 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Research and development tax credits are recognised as a credit to the tax charge during the year in which the claim was made.
Deferred tax
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
Deferred tax assets are recognised to the extent that future taxable profits will be available from which the reversal of the underlying timing differences can be utilised. Deferred tax assets are not discounted.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Valuation of contracts
Turnover is recognised on contracts as they progress. There is a certain level of estimation and judgement involved in arriving at these valuations and therefore the amounts to be recognised as turnover, and to gross profit margin.
Useful economic life of scaffolding equipment
Scaffolding equipment is depreciated over its expected useful economic life. There is a certain level of judgement and estimation over this life and therefore the carrying value of the assets and the depreciation charge recognised within cost of sales.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Scaffolding contracts
13,594,932
11,509,223
2023
2022
£
£
Turnover analysed by geographical market
UK
13,594,932
11,509,223
2023
2022
£
£
Other significant revenue
Interest income
-
451
Other income
5,960
5,520
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
23,042
24,285
Depreciation of owned tangible fixed assets
1,062,497
962,814
Depreciation of tangible fixed assets held under finance leases
172,191
78,446
Profit on disposal of tangible fixed assets
(20,731)
(33,592)
Operating lease charges
112,314
75,000
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
27,407
68,151
Company pension contributions to defined contribution schemes
-
1,101
27,407
69,252
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 1).
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Admin
8
8
Scaffolding
41
41
Total
49
49
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,933,147
1,961,185
Social security costs
196,058
227,926
Pension costs
31,042
37,967
2,160,247
2,227,078
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 18 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
1,250
104
Other finance costs:
Interest on finance leases and hire purchase contracts
50,184
5,196
Other interest
3,353
54,787
5,300
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
46,244
(59,712)
Adjustments in respect of prior periods
59,712
Total current tax
105,956
(59,712)
Deferred tax
Origination and reversal of timing differences
250,400
115,000
Total tax charge
356,356
55,288
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,377,960
760,812
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
275,592
144,554
Tax effect of expenses that are not deductible in determining taxable profit
4,157
24,990
Change in unrecognised deferred tax assets
2,031
11,227
Adjustments in respect of prior years
7,089
Effect of change in corporation tax rate
49,655
24,906
Group relief
(2,960)
Permanent capital allowances in excess of depreciation
(38,920)
(90,677)
Research and development tax credit
59,712
(59,712)
Taxation charge for the year
356,356
55,288
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
9
Dividends
2023
2022
£
£
Interim paid
550,516
38,353
10
Tangible fixed assets
Leasehold improvements
Scaffolding equipment
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2022
79,770
11,234,246
39,355
822,683
12,176,054
Additions
8,575
733,096
1,426
386,761
1,129,858
Disposals
(1,920)
(898)
(256,979)
(259,797)
At 31 May 2023
88,345
11,965,422
39,883
952,465
13,046,115
Depreciation and impairment
At 1 June 2022
11,774
5,291,507
26,812
475,668
5,805,761
Depreciation charged in the year
8,153
1,086,586
6,357
133,592
1,234,688
Eliminated in respect of disposals
(1,920)
(897)
(122,672)
(125,489)
At 31 May 2023
19,927
6,376,173
32,272
486,588
6,914,960
Carrying amount
At 31 May 2023
68,418
5,589,249
7,611
465,877
6,131,155
At 31 May 2022
67,996
5,942,739
12,543
347,015
6,370,293
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Scaffolding equipment
876,502
652,686
Motor vehicles
137,640
151,667
1,014,142
804,353
Depreciation charge for the year in respect of leased assets
172,191
78,446
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,060,129
2,047,075
Corporation tax recoverable
133,599
Other debtors
103,429
21,812
Prepayments and accrued income
75,029
60,354
2,238,587
2,262,840
12
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
420,423
300,755
In two to five years
116,670
333,612
537,093
634,367
Less: future finance charges
(25,057)
(30,489)
512,036
603,878
Finance lease payments represent rentals payable by the company for scaffold equipment and vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The lease terms are between 2 and 5 years. Leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
12
401,090
286,733
Trade creditors
385,913
661,240
Amounts owed to group undertakings
98,891
Corporation tax
102,221
Other taxation and social security
412,723
126,574
Other creditors
208,193
445,431
Accruals and deferred income
76,005
49,558
1,685,036
1,569,536
Finance leases are secured over the assets to which they relate.
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
12
110,946
317,145
15
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
970,400
933,000
Tax losses
-
(213,000)
970,400
720,000
2023
Movements in the year:
£
Liability at 1 June 2022
720,000
Charge to profit or loss
250,400
Liability at 31 May 2023
970,400
The deferred tax liability set out above is not expected to reverse within 12 months.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
31,042
37,967
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The amounts payable as at the balance sheet date in respect of pensions contributions was £3,582 (2022: £7,223).
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
SWIFT SCAFFOLDING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
17
Share capital
(Continued)
- 22 -
Each share has full rights in the company with respect to voting, being one vote per share, dividends and distributions.
18
Profit and loss reserves
The profit and loss reserves are wholly distributable.
19
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for the use of land and buildings. Lease rentals are fixed for an average of 5 years.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
100,000
100,000
Between two and five years
150,000
250,000
250,000
350,000
20
Related party transactions
The company has taken advantage of the exemption available in FRS 102 to not disclose transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
At the balance sheet date, the company owed a connected company £60,786 (2022: £nil).
At the balance sheet date, the company owed the parent company £98,891 (2022: £nil).
As at 31 May 2023, the company was owed £9,355 (2022: £nil) by a connected company and £94,074 (2022: £nil) from another connected company, This relates to payments made on behalf of these related parties.
During the year the company paid rent of £112,314 (2022: £75,000) to a company under common control.
As at the balance sheet date the Directors were owed £44,536 by the company (2022: £21,812 owed to).
21
Ultimate controlling party
In this and the preceding financial year, the immediate and ultimate parent company as at the balance sheet date was Swift Scaffolding Holdings Limited, a company incorporated in England & Wales, whose registered office is North Lane, Marks Tey, Colchester, Essex, England, CO6 1EG. Swift Scaffolding Holdings Limited prepare consolidated financial statements and these are available from the company's registered office.
The controlling party is Neil Moye by virtue of his shareholding in the parent company, in both the current and preceding year.
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