Company registration number 03919782 (England and Wales)
FRONT RUNNER LOGISTICS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
FRONT RUNNER LOGISTICS LTD
COMPANY INFORMATION
Directors
Mr S McCormack
Mr J McCormack
Mr C R McCormack
Mr W J McCormack
Secretary
Mrs J Stevens
Company number
03919782
Registered office
2 Lake End Court
Taplow Road
Taplow
Maidenhead
Berkshire
SL6 0JQ
Auditor
Stiles Accountants Limited, Statutory Auditor
2 Lake End Court
Taplow Road
Taplow
Maidenhead
Berkshire
SL6 0JQ
Business address
Unit A
Apex 30
233-269 London Road
Staines
TW18 4JU
FRONT RUNNER LOGISTICS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
6 - 8
Statement of income and retained earnings
5
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 25
FRONT RUNNER LOGISTICS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -

The directors present the strategic report for the year ended 28 February 2023.

Review of the business

The Directors are satisfied with the continued performance and development of the company during the year. Revenues grew to £19.2m (2022: £15.8m), an increase of 21.5%. In addition to the new procedures introduced last year, the company has expanded it's service range this year to attract new customers and also to enhance the services provided to existing clients. As a result of this, gross profit has increased to £5.2m (2022: £4.2m) and gross profit margin increased to 27.0% (2022: 26.8%).

 

Continued investment in the infrastructure and IT systems of the company has enabled it to take a leading role within the logistics industry by making the information and resources available to its customers. The company has also further increased its fleet of vehicles by £1,254,094 (2022: £512,285), which has been instrumental in enhancing its service capacity during the year.

 

The costs in running the fleet of vehicles has increased this year by 34.8% on the costs for 2022, which is above the increases seen in revenues. This came as a result of global economic issues impacting the fuel costs in the UK, however, the company has successfully managed these increases by identifying efficiencies in other areas.

 

The company's net profit before tax increased to £2.8m (2022: £2.3m), an increase of 21.7% (2022: 74.6%).

Principal risks and uncertainties

The Directors recognise that the results of the company are at risk in respect of the cost of living crisis and global factors, competition and a shortage of qualified drivers. The directors take steps to mitigate these risks as outlined in more detail below:

 

Cost of Living Crisis and Global Factors

Recent global factors such as COVID-19 and the war in Ukraine has had a major impact on the economy. The UK economy has significantly weakened with our customers experiencing higher cost of living due to increased inflation. These events have also seen company costs increase.

 

In order to mitigate the risk of loss in business as a result of these factors, the company ensures that the business is run efficiently via the investment in its infrastructure, systems and fleet as outlined above. This ensures that the company is able to provide competitive pricing to its customers in providing their logistics services.

 

Competition

The company has invested in improving its systems and infrastructure which ensures repeat customers continue to work with the company. Providing customers with the required information technology, is a method used by the company to manage competitor risk and to attract new customers.

 

Shortage of Drivers

Recent shortages of drivers has impacted the supply chain throughout the UK and Europe. It is therefore possible that the company may be unable to provide services to its current customer base were drivers to move to competitors.

 

In order to mitigate this risk, the company ensures that its drivers are remunerated at a competitive market rate and are provided with a high standard of working conditions while working at the company's premises and on completion of deliveries made to the company's customers. The company also regularly renews its fleet meaning that the drivers are able to drive high quality, comfortable vehicles at all times.

FRONT RUNNER LOGISTICS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
Future developments

Looking forward to the coming years, the company will continue to invest into its infrastructure including IT systems and its fleet in order to expand its customer base. The company has also added new services to it's operation, which compliment the services already offered.

On behalf of the board

Mr J McCormack
Director
27 November 2023
FRONT RUNNER LOGISTICS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 28 February 2023.

Principal activities

The principal activity of the company continued to be that of national logistics.

Results and dividends

The results for the year are set out on page 5.

Ordinary dividends were paid amounting to £1,470,834. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr S McCormack
Mr J McCormack
Mr C R McCormack
Mr W J McCormack
Auditor

Stiles Accountants Limited, Statutory Auditor were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

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 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.

FRONT RUNNER LOGISTICS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 4 -
Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr J McCormack
Director
27 November 2023
FRONT RUNNER LOGISTICS LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 5 -
Period
Year
ended
ended
28 February
28 February
2023
2022
Notes
£
£
Turnover
3
19,155,278
15,824,754
Cost of sales
(13,983,779)
(11,586,735)
Gross profit
5,171,499
4,238,019
Administrative expenses
(2,354,505)
(2,149,458)
Other operating income
88,614
235,660
Operating profit
4
2,905,608
2,324,221
Interest receivable and similar income
7
396
678
Interest payable and similar expenses
8
(66,196)
(57,028)
Profit before taxation
2,839,808
2,267,871
Tax on profit
9
(610,847)
(261,498)
Profit for the financial year
2,228,961
2,006,373
Retained earnings brought forward
2,230,280
1,284,595
Dividends
10
(1,470,834)
(1,060,688)
Retained earnings carried forward
2,988,407
2,230,280

The profit and loss account has been prepared on the basis that all operations are continuing operations.

FRONT RUNNER LOGISTICS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FRONT RUNNER LOGISTICS LTD
- 6 -
Opinion

We have audited the financial statements of Front Runner Logistics Ltd (the 'company') for the year ended 28 February 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor'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.

Other information

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:

FRONT RUNNER LOGISTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FRONT RUNNER LOGISTICS LTD
- 7 -
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:

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:

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of management override of controls) and determined that the principal risks were related fraudulent transactions which may lead to an overstatement of profits, such as manipulation of accounting estimates including depreciation and residual value policies in respect of the company's fixed assets and fleet of vehicles in particular. There is also a fraud risk in respect of the company's use of an invoice factoring facility which could be manipulated by way of crediting and re-raising sales invoices.

Based on our understanding of the company and industry, we identified principal risks of non-compliance with laws and regulations and we considered those laws and regulations which have a direct impact on the preparation of the financial statements such as the Companies Act 2006, FRS 102, health and safety laws, employment laws, contractual laws, General Data Protection Regulations (GDPR) and UK tax legislation.

FRONT RUNNER LOGISTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FRONT RUNNER LOGISTICS LTD
- 8 -

In order to mitigate the risks detailed above in respect of fraud and non-compliance with laws and regulations, the following procedures were undertaken by the audit team:

 

- Enquiry of management and those charged with governance around actual and potential litigation and claims.

- Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

- Challenging and validating the reasonableness and judgement with particular focus on the depreciation and residual values of the fleet of vehicles included in fixed assets.

- Reviewing sales credit notes raised during and after the year end with the company's use of an invoice factoring facility in mind.

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.

Mr Daniel Robins
Senior Statutory Auditor
For and on behalf of Stiles Accountants Limited, Statutory Auditor
27 November 2023
Chartered Certified Accountants
Statutory Auditor
2 Lake End Court
Taplow Road
Taplow
Maidenhead
Berkshire
SL6 0JQ
FRONT RUNNER LOGISTICS LTD
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,120,641
2,081,180
Current assets
Debtors
12
3,396,190
2,950,965
Cash at bank and in hand
674,731
188,559
4,070,921
3,139,524
Creditors: amounts falling due within one year
13
(2,787,543)
(2,318,598)
Net current assets
1,283,378
820,926
Total assets less current liabilities
4,404,019
2,902,106
Creditors: amounts falling due after more than one year
14
(681,329)
(254,483)
Provisions for liabilities
Provisions
17
178,481
153,481
Deferred tax liability
16
554,802
262,862
(733,283)
(416,343)
Net assets
2,989,407
2,231,280
Capital and reserves
Called up share capital
19
1,000
1,000
Profit and loss reserves
20
2,988,407
2,230,280
Total equity
2,989,407
2,231,280

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 27 November 2023 and are signed on its behalf by:
Mr J McCormack
Director
Company registration number 03919782 (England and Wales)
FRONT RUNNER LOGISTICS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
3,356,471
1,769,390
Interest paid
(66,196)
(57,028)
Income taxes (paid)/refunded
(414,277)
8,096
Net cash inflow from operating activities
2,875,998
1,720,458
Investing activities
Purchase of tangible fixed assets
(330,000)
(358,752)
Proceeds from disposal of tangible fixed assets
18,248
17,030
Interest received
396
678
Net cash used in investing activities
(311,356)
(341,044)
Financing activities
Payment of finance leases obligations
(607,636)
(533,904)
Dividends paid
(1,470,834)
(1,060,688)
Net cash used in financing activities
(2,078,470)
(1,594,592)
Net increase/(decrease) in cash and cash equivalents
486,172
(215,178)
Cash and cash equivalents at beginning of year
188,559
403,737
Cash and cash equivalents at end of year
674,731
188,559
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 11 -
1
Accounting policies
Company information

Front Runner Logistics Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 2 Lake End Court, Taplow Road, Taplow, Maidenhead, Berkshire, SL6 0JQ. The principal place of business is Unit A, Apex 30, 233-269 London Road, Staines, TW18 4JU.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
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 trade discounts, settlement discounts and volume rebates.

Revenue from logistics work is recognised once the significant risks and rewards of the delivery is passed to the customer.

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 land and buildings
Over 10 years
Plant and equipment
33% straight line and 25% reducing balance with a 10% residual value
Fixtures and fittings
20% straight line and over 10 years for property related assets
Motor vehicles
20% straight line, with a 10% residual value

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.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of fixed assets

At each reporting period 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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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 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.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 13 -
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.

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 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.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 14 -
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.

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.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.10
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.14
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessment consider issues such as the remaining life of the asset and the projected disposal value.

3
Turnover and other revenue
2023
2022
£
£
Other revenue
Interest income
396
678
Grants received
-
30,833
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(30,833)
Fees payable to the company's auditor for the audit of the company's financial statements
12,450
12,000
Depreciation of owned tangible fixed assets
408,763
356,876
Depreciation of tangible fixed assets held under finance leases
242,144
267,598
Loss/(profit) on disposal of tangible fixed assets
18,541
(8,420)
Operating lease charges
294,305
310,390
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 17 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Management
4
4
Office and admin
40
38
Drivers
106
94
Total
150
136

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,467,377
4,667,687
Social security costs
5,288
4,228
Pension costs
102,408
83,354
5,575,073
4,755,269
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
72,797
65,832
Company pension contributions to defined contribution schemes
1,435
1,226
74,232
67,058

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
396
356
Other interest income
-
0
322
Total income
396
678
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
7
Interest receivable and similar income
(Continued)
- 18 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
396
356
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
65,961
57,028
Other interest
235
-
0
66,196
57,028
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
318,907
414,277
Adjustments in respect of prior periods
-
0
(236,817)
Total current tax
318,907
177,460
Deferred tax
Origination and reversal of timing differences
291,940
84,038
Total tax charge
610,847
261,498
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
9
Taxation
(Continued)
- 19 -

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
2,839,808
2,267,871
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
539,564
430,895
Tax effect of expenses that are not deductible in determining taxable profit
34,877
17,658
Depreciation on assets not qualifying for tax allowances
123,672
118,650
Under/(over) provided in prior years
-
0
(236,817)
Capital allowances
(379,206)
(152,926)
Deferred tax
291,940
84,038
Taxation charge for the year
610,847
261,498

During the prior year, the company made a research and development claim relating to the years ending in 2020 and 2021. As a result of this claim, a tax deduction of £236,817 was achieved as detailed in the reconciliation above.

 

Factors impacting future tax charge

 

The effect of changes to the corporation tax rates substantively enacted as part of the Finance Bill include confirmation that from 1 April 2023 there will be an increase in the main corporation tax rate to 25% applying to companies with profits over £250,000.

10
Dividends
2023
2022
£
£
Final paid
560,340
671,050
Interim paid
910,494
389,638
1,470,834
1,060,688
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 20 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 March 2022
230,731
70,613
374,783
3,865,449
4,541,576
Additions
185,859
200,693
86,511
1,254,094
1,727,157
Disposals
-
0
-
0
(7,281)
(356,803)
(364,084)
At 28 February 2023
416,590
271,306
454,013
4,762,740
5,904,649
Depreciation and impairment
At 1 March 2022
20,791
51,568
100,006
2,288,031
2,460,396
Depreciation charged in the year
29,830
24,191
40,160
556,726
650,907
Eliminated in respect of disposals
-
0
-
0
(7,281)
(320,014)
(327,295)
At 28 February 2023
50,621
75,759
132,885
2,524,743
2,784,008
Carrying amount
At 28 February 2023
365,969
195,547
321,128
2,237,997
3,120,641
At 28 February 2022
209,940
19,045
274,777
1,577,418
2,081,180

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
£
£
Motor vehicles
1,850,470
1,053,675
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,680,357
2,514,944
Other debtors
537,678
360,962
Prepayments and accrued income
178,155
75,059
3,396,190
2,950,965

The company has an invoice factoring facility with its bank. This facility, from Barclays Bank Plc is secured by a fixed and floating charge over the company's assets in the event of an amount owing. At the year end, this facility reflected an amount of £287,977 (2022: £116,701) due back to the company, which is reflected in other debtors.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 21 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
746,394
408,719
Trade creditors
781,183
500,358
Corporation tax
318,907
414,277
Other taxation and social security
597,388
668,842
Other creditors
34,052
32,520
Accruals and deferred income
309,619
293,882
2,787,543
2,318,598

The comparatives in respect of accruals and deferred income have been updated to reflect the most appropriate classification.

14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
681,329
254,483

Hire purchase obligations are secured against the assets to which each agreement relates.

15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
746,394
408,719
In two to five years
681,329
254,483
1,427,723
663,202

Finance lease payments represent hire purchase payments payable by the company for motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 22 -
16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
554,802
262,862
2023
Movements in the year:
£
Liability at 1 March 2022
262,862
Charge to profit or loss
291,940
Liability at 28 February 2023
554,802

The deferred tax liability set out above is expected to reverse in line with the depreciation policies detailed in note 1.4 and relates to accelerated capital allowances that are expected to mature within the same period.

FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 23 -
17
Provisions for liabilities
2023
2022
£
£
178,481
153,481
Movements on provisions:
£
At 1 March 2022
153,481
Additional provisions in the year
25,000
At 28 February 2023
178,481

The company has made leasehold improvements to it head offices. In line with the terms of the lease, the company has a responsibility to return the property back to the landlord in the same condition as when the lease was originally signed. A provision has been made for the restoration costs, which have been calculated by the contractors who completed the original work.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
102,408
83,354

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.

At the year end, the company is due to to pay contributions to the scheme of £20,902 (2022: £16,625).

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary of £1 each
600
600
600
600
B Ordinary of £1 each
100
100
100
100
C Ordinary of £1 each
150
150
150
150
D Ordinary of £1 each
100
100
100
100
E Ordinary of £1 each
50
50
50
50
1,000
1,000
1,000
1,000
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
19
Share capital
(Continued)
- 24 -

The A, B, C, D and E Ordinary shares are irredeemable and have full rights in the company with regards to voting, dividends and capital contribution.

 

A dividend may be declared on either class of share to the exclusion of the other classes of share.

 

In all other respects, all classes of shares rank pari passu.

20
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
2,230,280
1,284,595
Profit for the year
2,228,961
2,006,373
Dividends declared and paid in the year
(1,470,834)
(1,060,688)
At the end of the year
2,988,407
2,230,280

The profit and loss reserve represent cumulative profits or losses net of dividends paid and other adjustments.

21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
287,380
304,070
Between two and five years
1,142,008
1,132,896
In over five years
777,006
1,053,652
2,206,394
2,490,618
22
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
33,198
23
Related party transactions
FRONT RUNNER LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
23
Related party transactions
(Continued)
- 25 -

During the year the company incurred costs in relation to services provided by KL Couriers Limited of £32,000 (2022: £25,000). This company is related on the basis it is controlled by close family. The directors consider these transactions to be concluded under normal market conditions.

24
Directors' transactions

Dividends totalling £1,470,834 (2022: £1,060,688) were paid in the year in respect of shares held by the company's directors.

25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,228,961
2,006,373
Adjustments for:
Taxation charged
610,847
261,498
Finance costs
66,196
57,028
Investment income
(396)
(678)
Loss/(gain) on disposal of tangible fixed assets
18,541
(8,420)
Depreciation and impairment of tangible fixed assets
650,907
624,474
Movements in working capital:
Increase in debtors
(445,225)
(838,147)
Increase/(decrease) in creditors
226,640
(332,738)
Cash generated from operations
3,356,471
1,769,390
26
Analysis of changes in net debt
1 March 2022
Cash flows
New finance leases
28 February 2023
£
£
£
£
Cash at bank and in hand
188,559
486,172
-
674,731
Obligations under finance leases
(663,202)
607,636
(1,372,157)
(1,427,723)
(474,643)
1,093,808
(1,372,157)
(752,992)
2023-02-282022-03-01falseCCH SoftwareCCH Accounts Production 2023.300Mr S McCormackMr J McCormackMr C R McCormackMr W J McCormackMrs J Stevensfalse039197822022-03-012023-02-2803919782bus:Director12022-03-012023-02-2803919782bus:Director22022-03-012023-02-2803919782bus:Director32022-03-012023-02-2803919782bus:Director42022-03-012023-02-2803919782bus:CompanySecretary12022-03-012023-02-2803919782bus:RegisteredOffice2022-03-012023-02-28039197822023-02-28039197822021-03-012022-02-2803919782core:RetainedEarningsAccumulatedLosses2022-02-2803919782core:RetainedEarningsAccumulatedLosses2021-02-2803919782core:ShareCapital2023-02-2803919782core:ShareCapital2022-02-2803919782core:RetainedEarningsAccumulatedLosses2023-02-2803919782core:RetainedEarningsAccumulatedLosses2022-02-28039197822022-02-2803919782core:ShareCapitalOrdinaryShares2023-02-2803919782core:ShareCapitalOrdinaryShares2022-02-2803919782core:RetainedEarningsAccumulatedLosses2021-03-012022-02-2803919782core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-02-2803919782core:PlantMachinery2023-02-2803919782core:FurnitureFittings2023-02-2803919782core:MotorVehicles2023-02-2803919782core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-02-2803919782core:PlantMachinery2022-02-2803919782core:FurnitureFittings2022-02-2803919782core:MotorVehicles2022-02-2803919782core:CurrentFinancialInstrumentscore:WithinOneYear2023-02-2803919782core:CurrentFinancialInstrumentscore:WithinOneYear2022-02-2803919782core:Non-currentFinancialInstrumentscore:AfterOneYear2023-02-2803919782core:Non-currentFinancialInstrumentscore:AfterOneYear2022-02-2803919782core:CurrentFinancialInstruments2023-02-2803919782core:CurrentFinancialInstruments2022-02-28039197822022-02-28039197822021-02-2803919782core:LandBuildingscore:LongLeaseholdAssets2022-03-012023-02-2803919782core:PlantMachinery2022-03-012023-02-2803919782core:FurnitureFittings2022-03-012023-02-2803919782core:MotorVehicles2022-03-012023-02-280391978212022-03-012023-02-280391978212021-03-012022-02-2803919782core:UKTax2022-03-012023-02-2803919782core:UKTax2021-03-012022-02-280391978222022-03-012023-02-280391978222021-03-012022-02-280391978232022-03-012023-02-280391978232021-03-012022-02-280391978242022-03-012023-02-280391978242021-03-012022-02-2803919782core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-02-2803919782core:PlantMachinery2022-02-2803919782core:FurnitureFittings2022-02-2803919782core:MotorVehicles2022-02-2803919782core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-012023-02-2803919782core:Non-currentFinancialInstruments2023-02-2803919782core:Non-currentFinancialInstruments2022-02-2803919782core:WithinOneYear2023-02-2803919782core:WithinOneYear2022-02-2803919782core:BetweenTwoFiveYears2023-02-2803919782core:BetweenTwoFiveYears2022-02-2803919782core:MoreThanFiveYears2023-02-2803919782core:MoreThanFiveYears2022-02-2803919782bus:PrivateLimitedCompanyLtd2022-03-012023-02-2803919782bus:FRS1022022-03-012023-02-2803919782bus:Audited2022-03-012023-02-2803919782bus:FullAccounts2022-03-012023-02-28xbrli:purexbrli:sharesiso4217:GBP