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COMPANY REGISTRATION NUMBER: 03529819
Artic Building Services Limited
Financial Statements
For the year ended
30 June 2023
R E Jones & Co.
Artic Building Services Limited
Financial Statements
Year ended 30 June 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
7
Independent auditor's report to the members
9
Statement of income and retained earnings
13
Statement of financial position
14
Statement of cash flows
15
Notes to the financial statements
16
R E Jones & Co.
Artic Building Services Limited
Officers and Professional Advisers
The board of directors
Mr C Trowell
Mr P Lucas
Mr J Coiley
Ms P Miller
Registered office
16-17 Schooner Court
Crossways Business Park
Dartford
Kent
England
DA2 6NW
Auditor
R. E. Jones & Co.
Chartered accountants & statutory auditor
132 Burnt Ash Road
Lee
London
SE12 8PU
Bankers
National Westminster Bank plc
143 High Street
Bromley
Kent
BR1 1JH
R E Jones & Co.
Artic Building Services Limited
Strategic Report
Year ended 30 June 2023
Fair review of the business, and of its development and performance The Company is a trading private limited company, which has been established 25 years, the principal activity of the Company continues to be the provision of general building services and hard facilities management services. The directors are pleased to report another year of continued development and growth for the company. The business remained focused to pursuing hard facilities management service opportunities for static and mobile sites in London and the Home Counties, this is in line with its long-term business plan, concentrating on securing new large clients within more defined sectors of NHS, education and corporate business. The level of contract retention remains excellent currently 96% and these retention levels ensure stability of the business for the future. The results are found on pages 15 to 29. The directors are pleased to report that the turnover for the year ended 30th June 2023 increased by 32.0% on the previous year. The business continued to secure more profitable business within the Healthcare, Education, Leisure and Private sectors which provided stability and growth throughout the year. The service and maintenance division grew by 31.3%, the maintenance portfolio grew by 15.7% as well compared to last year due to ongoing relationships with existing clients and good reputation within the marketplace. The turnover from additional works grew by 47.6% in parity with the maintenance portfolio. The projects division grew by 44.7% as the business has started to successfully engage services with main contractors to drive growth. The gross margin has increased to 17.6% compared to 16.7% with last year, this is despite more competitive price sensitive market and further investment in key staff and external labour factors impacting costs. The procurement efficiencies introduced has served the business well enabling us to retain our profit margins. The company has once again maintained adequate cost control in times of high inflation as the overheads are running at 8.1% of turnover. There was investment in advertising and marketing, IT infrastructure and staffing in the year to support the businesses growth plan. The directors are pleased to announce that despite costs rising due to inflation and contractual margin pressures the Company has achieved a profit before taxation of £3,689,028, which equates to an operating margin of 9.3% compared to 9.7% the previous financial year. The market continues to be very competitive and with inflationary pressures this will result in challenging times for the business in 23/24. The Company is still adopting a prudent approach when tendering new contracts which are not deemed profitable and is concentrating on sectors which will allow growth within the Company and applying robust strategies to keep core spend in line with the 23/24 budget. Principal risks and uncertainties facing the company The Directors and board have performed a robust and systematic review of those risks that they believe could seriously affect the Company's performance, future prospects, reputation or its ability to deliver against its priorities. Recruitment for technical positions is ever more difficult due to impact of Brexit and which has resulted in a shortage of skilled engineering candidates. As a result, the Directors have invested in employee engagement programmes and further staff package enhancements to to attract new talent and retain existing staff. The company continues to overinvest in training, development, apprenticeships, and internal promotions to attract the best in class and keep the culture of belonging to its workforce. The directors continue to build upon and champion the board wellbeing programme for the Company's employees. The Company also increased our recruitment agency portfolio and avenues to employing new talent including STEM initiatives to attract the engineers of the future. Through the year the business returned to the pre-pandemic style of head office working but retained some element of flexibility and we have invested in IT and other key operational infrastructure the enable flexible working if and where needed. All departments continue to perform regular commercial, client and HR risk reviews that is reported at board level monthly, to consider and assess the Company's principal risks and specific local risks pertinent to the market in which it operates. This process ensures a consistent approach to risk assessment across all departments. The content of the Risk Register is considered and discussed through regular meetings with senior management and reviewed by the Directors. This development of our risk process has resulted in the inclusion of liquidity risk as a principal risk in this section. The Directors have carefully considered the impact of Brexit upon the business but given that the Company directly imports very little supplies, and its customer base is wholly UK based, they feel that there is a low identifiable risk. Financial risk management The Company's operations expose it to a variety of financial risks that include the effects of changes in credit risk, price risk and liquidity risk. The principal risks and uncertainties affecting the company relate to general demand, UK Economy fluctuations, competition with other competitors. Credit risk Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The company is mainly exposed to credit risk from credit sales. At 30 June 2023 the company has trade receivables of £5.6M (2022:£4.4M). The Company is therefore exposed to credit risk on these balances, such that if customers encounter financial difficulties this could materially affect the Company's financial position. To minimise risk the company seeks to deal with companies which demonstrate creditworthy credentials and maintains a monitoring process throughout the year. For the details above, the directors consider the probability of impairment loss on receivables is low and hence no requirement to make a provision. Credit risk on cash and cash equivalents is considered to be small as the counterparties are all substantial banks with investment grade credit ratings. Price risk Price risk is the risk that the swing in the price of key expenses will affect the profitability of the business. The Company manages this risk by a mixture of long term price agreements with suppliers and monitoring of market movements. Liquidity risk Liquidity risk relates to the management of working capital and the potential difficulty in meeting financial obligations as they fall due. The company actively manages cash generation and maintains sufficient cash reserves to cover commitments. Political and Economic risk The company continues to monitor the impact and risks of the UK's exit from the European Union's Single Market and Customs Union in January 2021. The director regularly assesses the potential difficulties and the impact on the movement of the products under the potential Brexit risks. Covid-19 The company is mindful of the effects that Covid-19 is having on the workforce, suppliers, distribution and customers. The company is also mindful of the wider economic effects this could have on the global market in 2022 and beyond. The company maintains a regular risk review of the impact on the trade and the potential future demand from customers. The company considers itself to be well positioned to manage the situation in the forthcoming months. Going concern The company has considered the going concern in the light of Covid-19 and concluded that the company has sufficient financial resources in place at the Balance Sheet date to consider it reasonable to adopt the going concern basis in preparing the financial statements for the year. Analysis of key performance indicators The directors monitor the Company's performance by reviewing the following key performance indicators (KPI's):
2023 2022
PERFORMANCE
Gross profit margin (%) 18 17
Operating margin (%) 9 10
Net profit margin (%) 7 8
EBITDA 3,827,445 2,920,812
Return on capital employed 2 5
Net asset turnover 7 9
2023 2022
LIQUIDITY
Current ratio 2 1
Quick ratio 2 1
2023 2022
SOLVENCY
Net gearing (%) 63 81
Gross gearing (%) 27 15
Asset cover ratio 5 8
Year end position The directors are satisfied with the Company's Statement of Financial Position at the year end. The directors continue to maintain robust controls over debtors and creditors which has resulted in a healthy cash position of £5.2M. The outlook for the business continues to remain positive with key personnel now in place and business is securing more contracts with a longer relationship, excellent financial control and a sufficient level of available working capital to allow the business to expand organically.
This report was approved by the board of directors on 22 November 2023 and signed on behalf of the board by:
Mr C Trowell
Mr P Lucas
Director
Director
R E Jones & Co.
Artic Building Services Limited
Directors' Report
Year ended 30 June 2023
The directors present their report and the financial statements of the company for the year ended 30 June 2023 .
Directors
The directors who served the company during the year was as follows:
Mr V McAnallen
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Future developments
Future Developments are disclosed in the Strategic Report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 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 judgments and accounting estimates that are reasonable and prudent; - 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 22 November 2023 and signed on behalf of the board by:
Mr C Trowell
Mr P Lucas
Director
Director
R E Jones & Co.
Artic Building Services Limited
Independent Auditor's Report to the Members of Artic Building Services Limited
Year ended 30 June 2023
Opinion
We have audited the financial statements of Artic Building Services Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, 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 30 June 2023 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor'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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters 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 directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 irregularities, including fraud The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Based on our understanding of the company and industry, and through discussion with the directors and other managed (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alter to any indications of non-compliance throughout the audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or or reduce expenditure and management bias in accounting estimates. Audit procedures performed by the engagement team included : " Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud; and " Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud; and " Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions that may indicate risks of material misstatements due to fraud; and " Identifying and testing journal entries, in particular any manual entries made ate year-end for financial statement preparation. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
S E Jones.
(Senior Statutory Auditor)
For and on behalf of
R. E. Jones & Co.
Chartered accountants & statutory auditor
132 Burnt Ash Road
Lee
London
SE12 8PU
22 November 2023
R E Jones & Co.
Artic Building Services Limited
Statement of Income and Retained Earnings
Year ended 30 June 2023
2023
2022
Note
£
£
Turnover
4
39,860,303
29,450,508
Cost of sales
32,868,209
24,537,556
--------------
--------------
Gross profit
6,992,094
4,912,952
Administrative expenses
3,239,456
2,067,805
-------------
-------------
Operating profit
5
3,752,638
2,845,147
Other interest receivable and similar income
9
12,461
307
Interest payable and similar expenses
10
76,071
254
-------------
-------------
Profit before taxation
3,689,028
2,845,200
Tax on profit
11
848,396
553,859
-------------
-------------
Profit for the financial year and total comprehensive income
2,840,632
2,291,341
-------------
-------------
Dividends paid and payable
12
( 354,314)
( 2,116,358)
Retained earnings at the start of the year
3,220,199
3,045,216
-------------
-------------
Retained earnings at the end of the year
5,706,517
3,220,199
-------------
-------------
All the activities of the company are from continuing operations.
R E Jones & Co.
Artic Building Services Limited
Statement of Financial Position
30 June 2023
2023
2022
Note
£
£
£
Fixed assets
Tangible assets
13
2,813,972
2,810,036
Current assets
Debtors
14
8,597,150
5,068,576
Cash at bank and in hand
5,192,947
3,102,090
--------------
-------------
13,790,097
8,170,666
Creditors: amounts falling due within one year
15
9,040,556
7,483,119
--------------
-------------
Net current assets
4,749,541
687,547
-------------
-------------
Total assets less current liabilities
7,563,513
3,497,583
Creditors: amounts falling due after more than one year
16
1,509,406
15,844
Provisions
Taxation including deferred tax
18
347,588
261,538
-------------
-------------
Net assets
5,706,519
3,220,201
-------------
-------------
Capital and reserves
Called up share capital
21
2
2
Profit and loss account
22
5,706,517
3,220,199
-------------
-------------
Shareholders funds
5,706,519
3,220,201
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 22 November 2023 , and are signed on behalf of the board by:
Mr C Trowell
Mr P Lucas
Director
Director
Company registration number: 03529819
R E Jones & Co.
Artic Building Services Limited
Statement of Cash Flows
Year ended 30 June 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
2,840,632
2,291,341
Adjustments for:
Depreciation of tangible assets
74,808
75,665
Other interest receivable and similar income
( 12,461)
( 307)
Interest payable and similar expenses
76,071
254
Gains on disposal of tangible assets
( 20,967)
( 2,663)
Tax on profit
848,396
553,859
Accrued expenses
862,694
725,495
Changes in:
Trade and other debtors
( 3,528,574)
( 1,915,623)
Trade and other creditors
1,160,236
892,472
-------------
-------------
Cash generated from operations
2,300,835
2,620,493
Interest paid
( 76,071)
( 254)
Interest received
12,461
307
Tax paid
( 809,701)
( 267,924)
-------------
-------------
Net cash from operating activities
1,427,524
2,352,622
-------------
-------------
Cash flows from investing activities
Purchase of tangible assets
( 135,915)
( 61,312)
Proceeds from sale of tangible assets
78,138
3,999
-------------
-------------
Net cash used in investing activities
( 57,777)
( 57,313)
-------------
-------------
Cash flows from financing activities
Proceeds from borrowings
1,558,381
Proceeds from loans from group undertakings
( 448,123)
( 18,446)
Payments of finance lease liabilities
( 34,834)
( 19,000)
Dividends paid
( 354,314)
( 2,116,358)
-------------
-------------
Net cash from/(used in) financing activities
721,110
( 2,153,804)
-------------
-------------
Net increase in cash and cash equivalents
2,090,857
141,505
Cash and cash equivalents at beginning of year
3,102,090
2,960,585
-------------
-------------
Cash and cash equivalents at end of year
5,192,947
3,102,090
-------------
-------------
R E Jones & Co.
Artic Building Services Limited
Notes to the Financial Statements
Year ended 30 June 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 16-17 Schooner Court, Crossways Business Park, Dartford, Kent, DA2 6NW, England.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant & Machinery
-
25% reducing balance
Fixtures & Fittings
-
25% reducing balance
Motor Vehicess
-
25% reducing balance
Office Equipment
-
25% reducing balance
Integral Features
-
5% straight line
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Rendering of services
39,860,303
29,450,508
--------------
--------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
74,808
75,665
Gains on disposal of tangible assets
( 20,967)
( 2,663)
---------
---------
6. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
20,250
19,950
---------
---------
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Administrative staff
26
22
Management staff
18
16
Number of engineer staff
140
125
Number of direct administration staff
23
19
----
----
207
182
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
10,072,356
8,106,864
Social security costs
1,135,517
902,578
Other pension costs
235,492
201,822
--------------
-------------
11,443,365
9,211,264
--------------
-------------
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
9,000
9,022
-------
-------
9. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
12,461
307
---------
----
10. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
72,068
254
Other interest payable and similar charges
4,003
---------
----
76,071
254
---------
----
11. Tax on profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
762,346
557,116
Deferred tax:
Origination and reversal of timing differences
86,050
( 3,257)
----------
----------
Tax on profit
848,396
553,859
----------
----------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 20.50 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
3,689,028
2,845,200
-------------
-------------
Profit on ordinary activities by rate of tax
756,099
540,588
Effect of expenses not deductible for tax purposes
16,236
12,259
Effect of capital allowances and depreciation
( 9,989)
4,269
Movement in deferred tax provision
86,050
( 3,257)
-------------
-------------
Tax on profit
848,396
553,859
-------------
-------------
12. Dividends
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):
2023
2022
£
£
Dividends on equity shares
354,314
2,116,358
----------
-------------
The dividends were paid to the Company's shareholder, AMB Newco 03 Limited, the subsidiary of Artic Holdings Limited (See note 26). Artic Holdings Limited paid it's directors (Mr and Mrs V McAnallen) dividends totalling £354,314.
13. Tangible assets
At 1 July 2022
Additions
Disposals
At 30 June 2023
£
£
£
£
Cost
Land and buildings
2,500,000
2,500,000
Plant and machinery
104,745
( 87,295)
17,450
Fixtures and fittings
327,693
12,873
340,566
Motor vehicles
13,860
13,860
Equipment
341,322
123,042
464,364
Integral features
118,633
118,633
-------------
----------
---------
-------------
3,406,253
135,915
( 87,295)
3,454,873
-------------
----------
---------
-------------
At 1 July 2022
Charge for the year
Disposals
At 30 June 2023
£
£
£
£
Depreciation
Land and buildings
Plant and machinery
27,756
13,530
( 30,124)
11,162
Fixtures and fittings
263,376
17,421
280,797
Motor vehicles
13,511
87
13,598
Equipment
238,190
37,838
276,028
Integral features
53,384
5,932
59,316
-------------
----------
---------
----------
596,217
74,808
( 30,124)
640,901
-------------
----------
---------
----------
At 30 June 2023
At 30 June 2022
£
£
Carrying amount
Land and buildings
2,500,000
2,500,000
Plant and machinery
6,288
76,989
Fixtures and fittings
59,769
64,317
Motor vehicles
262
349
Equipment
188,336
103,132
Integral features
59,317
65,249
-------------
-------------
2,813,972
2,810,036
-------------
-------------
Tangible assets held at valuation
In respect of tangible assets held at valuation, the aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:
Land and buildings
£
At 30 June 2023
Aggregate cost
1,423,623
Aggregate depreciation
-------------
Carrying value
1,423,623
-------------
At 30 June 2022
Aggregate cost
1,423,623
Aggregate depreciation
-------------
Carrying value
1,423,623
-------------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Plant and machinery
£
At 30 June 2023
----
At 30 June 2022
43,484
---------
14. Debtors
2023
2022
£
£
Trade debtors
5,622,921
4,446,131
Amounts owed by group undertakings
1,143,205
Prepayments and accrued income
827,350
599,473
Directors loan account
975,340
Other debtors
28,334
22,972
-------------
-------------
8,597,150
5,068,576
-------------
-------------
15. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
48,975
Trade creditors
3,539,898
2,860,497
Amounts owed to group undertakings
448,123
Accruals and deferred income
3,388,483
2,525,789
Corporation tax
559,481
606,836
Social security and other taxes
1,382,184
968,106
Obligations under finance leases and hire purchase contracts
18,990
Other creditors
121,535
54,778
-------------
-------------
9,040,556
7,483,119
-------------
-------------
16. Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
1,509,406
Obligations under finance leases and hire purchase contracts
15,844
-------------
---------
1,509,406
15,844
-------------
---------
17. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Not later than 1 year
18,990
Later than 1 year and not later than 5 years
15,844
----
---------
34,834
----
---------
18. Provisions
Deferred tax (note 19)
£
At 1 July 2022
261,538
Charge against provision
86,050
----------
At 30 June 2023
347,588
----------
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 18)
347,588
261,538
----------
----------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
78,493
57,027
Revaluation of tangible assets
269,095
204,511
----------
----------
347,588
261,538
----------
----------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 235,492 (2022: £ 201,822 ).
21. Called up share capital
Authorised share capital
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
1,000
1,000
1,000
1,000
-------
-------
-------
-------
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
2
2
2
2
----
----
----
----
22. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
23. Analysis of changes in net debt
At 1 Jul 2022
Cash flows
At 30 Jun 2023
£
£
£
Cash at bank and in hand
3,102,090
2,090,857
5,192,947
Debt due within one year
(467,113)
418,138
(48,975)
Debt due after one year
(15,844)
(1,493,562)
(1,509,406)
-------------
-------------
-------------
2,619,133
1,015,433
3,634,566
-------------
-------------
-------------
24. Charges on assets
The National Westminster Bank plc, held two charges dated 15 August 2022 and 19 August 2022. The first charge contains fixed and floating charges, the floating charge is over all property or undertaking of the Company, it also includes a negative pledge. The second charge is over units 16 and 17 Schooner Park, Schooner Court, Crossways Business Park, Dartford, this also contains a negative pledge. Both these charges were satisfied on 6 July 2023.
Clydesdale Bank PLC (Trading as Virgin Money) hold a fixed and floating charge over all property or undertaking of the company dated 12 July 2023, this charge contains a negative pledge.
Rockpool (Security Trustee) Limited hold a fixed and floating charge over all property or undertaking of the company dated 12 July 2023, this charge contains a negative pledge.
25. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2023
Balance brought forward
Advances/ (credits) to the directors
Balance outstanding
£
£
£
Mr V McAnallen
975,340
975,340
----
----------
----------
2022
Balance brought forward
Advances/ (credits) to the directors
Balance outstanding
£
£
£
Mr V McAnallen
----
----
----
26. Controlling party
The Company's parent company is AMB Newco 03 Limited, which was registered in England and Wales, registration number 08782684, the registered office is 16-17 Schooner Court, Crossways Business Park, Dartford, Kent, England DA2 6NW. The Company's ultimate parent company was Artic Holdings Limited, which is registered in England and Wales, registration number 11472746, the registered office is 16-17 Schooner Court, Crossways Business Park, Dartford, Kent, England DA2 6NW.