Company registration number 01632717 (England and Wales)
GEO HOULTON & SONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 APRIL 2023
GEO HOULTON & SONS LIMITED
COMPANY INFORMATION
Directors
R G Houlton
K W Knights
P S Dickerson
J I Craft
A M Kingston
N B Travis
P R Gibson
M B Johnson
Secretary
N B Travis
Company number
01632717
Registered office
Hyperion Street
Hull
HU9 1BD
Auditor
Fawley Judge & Easton
Chartered Certified Accountants
1 Parliament Street
Hull
East Yorkshire
HU1 2AS
GEO HOULTON & SONS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
GEO HOULTON & SONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 29 APRIL 2023
- 1 -

The directors present the strategic report for the year ended 29 April 2023.

REVIEW OF THE BUSINESS

The business is principally engaged in the provision of high quality, award winning construction, building maintenance and property development services within the Yorkshire and Lincolnshire areas. The group continues to focus on partnering established clients through negotiated construction projects, as well as, opportunities afforded by large public sector frameworks to which it is appointed. The company also attracts a significant volume of tender enquiries attributable to recent performance and recommendation.

 

The broad mix of clients and projects reflects the company's ability to deliver ‘best in class’ results across a wide range of sectors. The company continues to substantially invest in training, systems and procedures, and clients recognise that our project teams provide an excellent level of service, contributing directly to the success of these investments.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the company's strategy are subject to a number of risks. The key business risk affecting the company is considered to relate to competition from regional and local builders. The restructuring of the business in May 2021 has effectively de-risked competition from national contractors. Other risks include local construction market conditions, including build cost inflation arising from the Russian invasion of Ukraine.

DEVELOPMENT AND PERFORMANCE DURING THE PERIOD

The company recorded a loss for the financial year of £140,119 (2022 profit: £109,774) based upon a reduced annual turnover of £24,132,691 (2022: £31,089,165).

 

As can be seen from the financial results above, 2022/23 represented a challenging 12 months for the business. Last year’s report referred to ‘almost unprecedented market conditions’ arising from the war in Ukraine, the impact of which, on price inflation and interest rates continued to be felt well into 2022/23. However, most acutely experienced was the impact on the timing of projects, particularly during the Autumn/Winter period, when clients, both current and prospective, postponed and, in some cases cancelled, capital projects reducing demand for our services. In consequence, annual turnover for 2022/23 concluded at £24.1m, 22% below the previous year, thereby reducing business profitability.

 

Notwithstanding ‘almost unprecedented market conditions’, the business, through good cost control and a reluctance to sacrifice margin for volume, managed to increase gross margins to 11.8% (2022: 11.0%) at a time of elevated input price inflation. Furthermore, the results incorporate final costs associated with the closing out of poor performing legacy contracts, following the restructuring process undertaken in May 2021. However, the improvement in margin only partially mitigated the impact of reduced turnover.

 

More positively, Spring 2023 saw a significant improvement in market sentiment and the volume of work available to price. As a result, the business secured more work in the first 6 months of 2023/24, than in 2022/23 as a whole and therefore, as at 29 April 2023, the company held a very healthy, ‘fully costed’, forward order book in both public and private sectors, together with a strong pipeline of future opportunities.

 

With the work secured, our highly capable workforce, loyal customer base and supply chain, the business can look forward with confidence and optimism into 2024 and beyond.

GEO HOULTON & SONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 2 -
GOING CONCERN

The company's business activities, together with the factors likely to affect its future development, its financial position, financial risk management objectives, and its exposure to liquidity, price and credit risk are described in the Strategic report and Directors' report.

 

Further to this improved trading into 2023/24, and a review of recent management accounts, together with corresponding cashflow and profit forecasts, we have concluded that the presumption of adopting the going concern basis in preparing the Annual Report and financial statements continues to be appropriate. In performing this assessment the Directors have reviewed the company's cash flow forecasts for the next 12 months from the date of the approval of the financial statements, and they have a reasonable expectation that the company has sufficient resources to continue in operational existence for the foreseeable future. The financial position will continue to be monitored very closely by Directors.

 

Currently the company is on track for a strong performance in 2023/24, despite the challenging market conditions alluded to above.

 

Regarding the company’s legacy defined benefit pension scheme, following the previous actuarial triannual valuation of the Pension Scheme of 30 April 2020, undertaken at the height of Coronavirus Pandemic, funding levels have improved very significantly. Having exhibiting a large deficit on 30 April 2020, the latest valuation dated 30 April 2023, concluded only recently, reported a very substantial surplus. In consequence, associated costs and their impact on the business are expected to be much lower in future than hitherto, was the case.

 

FINANCIAL RISK MANAGEMENT

The company's operations expose it to a variety of financial risks that include price risk, credit risk, liquidity risk and interest rate risk. The company has in place a risk awareness program that seeks to understand the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs.

 

Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department.

 

Price risk

The company is not exposed to any significant price risk because before projects are undertaken price tenders from suppliers and sub-contractors are obtained. Sub-contractors are responsible for the materials used in their contracts with the company.

 

Credit risk

The company has implemented policies that require appropriate credit checks on potential customers and sub-contractors before contracts are entered into. A significant portion of the company's activities are with Governmental organisations and as such credit risks are minimised.

 

Liquidity risk

Debt is project based and is supported by charged assets.

 

Interest rate cash flow risk

The company considers the cash flow risk on a monthly basis and the costs associated thereto are not significant to the business.

FINANCIAL KEY PERFORMANCE INDICATORS

The directors of the company and the group manage the group's operations on a divisional basis. For this reason, the company's directors believe that analysis using key performance indicators for the company is not necessary or appropriate for an understanding of the development, performance or position of the business of the company. The shareholders have a good understanding of the progress and movement of the business.

 

The company constantly measures its performance through detailed periodic reviews of each ongoing contract, and by monthly management accounts and meetings.

GEO HOULTON & SONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 3 -

On behalf of the board

P S Dickerson
Director
25 January 2024
GEO HOULTON & SONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 29 APRIL 2023
- 4 -

The directors present their annual report and financial statements for the year ended 29 April 2023.

Principal activities

The principal activity of the company continued to be that of a building contractor.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

R G Houlton
K W Knights
P S Dickerson
J I Craft
A M Kingston
N B Travis
P R Gibson
M B Johnson
Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
P S Dickerson
Director
25 January 2024
GEO HOULTON & SONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 29 APRIL 2023
- 5 -

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.

GEO HOULTON & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GEO HOULTON & SONS LIMITED
- 6 -
Opinion

We have audited the financial statements of Geo Houlton & Sons Limited (the 'company') for the year ended 29 April 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:

GEO HOULTON & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEO HOULTON & SONS LIMITED
- 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

GEO HOULTON & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEO HOULTON & SONS LIMITED
- 8 -

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, legislation, data protection, anti-bribery, employment, environmental and health and safety legislation. An understanding of these laws and regulations and the extent of compliance was obtained through discussion with management and inspecting legal and regulatory correspondence.

 

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

 

To address the risk of fraud through management bias and override of controls, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

[Which laws and regulations the auditor identified as being of significance in the context of the entity.]

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.

Jonathan Leathley (Senior Statutory Auditor)
For and on behalf of Fawley Judge & Easton
25 January 2024
Chartered Certified Accountants
Statutory Auditor
1 Parliament Street
Hull
East Yorkshire
HU1 2AS
GEO HOULTON & SONS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 29 APRIL 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
24,132,691
31,089,164
Cost of sales
(21,274,290)
(27,681,848)
Gross profit
2,858,401
3,407,316
Administrative expenses
(3,332,496)
(3,323,868)
Exceptional items
4
-
0
(157,168)
Operating loss
5
(474,095)
(73,720)
Interest payable and similar expenses
8
50,000
6,000
Loss before taxation
(424,095)
(67,720)
Tax on loss
9
281,816
237,490
(Loss)/profit for the financial year
(142,279)
169,770

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

GEO HOULTON & SONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 APRIL 2023
- 10 -
2023
2022
£
£
(Loss)/profit for the year
(142,279)
169,770
Other comprehensive income
Actuarial gain on defined benefit pension schemes
867,000
1,285,000
Tax relating to other comprehensive income
(164,730)
(244,150)
Other comprehensive income for the year
702,270
1,040,850
Total comprehensive income for the year
559,991
1,210,620
GEO HOULTON & SONS LIMITED
BALANCE SHEET
AS AT
29 APRIL 2023
29 April 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
285,383
212,758
Current assets
Stocks
12
24,566
19,812
Debtors
13
5,849,249
7,798,840
Cash at bank and in hand
395,007
1,491,049
6,268,822
9,309,701
Creditors: amounts falling due within one year
14
(4,931,335)
(7,744,719)
Net current assets
1,337,487
1,564,982
Total assets less current liabilities
1,622,870
1,777,740
Creditors: amounts falling due after more than one year
15
(107,786)
(63,696)
Provisions for liabilities
Deferred tax liability
17
511,844
317,795
(511,844)
(317,795)
Net assets excluding pension surplus
1,003,240
1,396,249
Defined benefit pension surplus
18
2,550,000
1,597,000
Net assets
3,553,240
2,993,249
Capital and reserves
Called up share capital
19
500,000
500,000
Profit and loss reserves
3,053,240
2,493,249
Total equity
3,553,240
2,993,249
The financial statements were approved by the board of directors and authorised for issue on 25 January 2024 and are signed on its behalf by:
P S Dickerson
A M Kingston
Director
Director
Company Registration No. 01632717
GEO HOULTON & SONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 APRIL 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 30 April 2021
500,000
1,282,629
1,782,629
Year ended 29 April 2022:
Profit for the year
-
169,770
169,770
Other comprehensive income:
Actuarial gains on defined benefit plans
-
1,285,000
1,285,000
Tax relating to other comprehensive income
-
(244,150)
(244,150)
Total comprehensive income for the year
-
0
1,210,620
1,210,620
Balance at 29 April 2022
500,000
2,493,249
2,993,249
Year ended 29 April 2023:
Loss for the year
-
(142,279)
(142,279)
Other comprehensive income:
Actuarial gains on defined benefit plans
-
867,000
867,000
Tax relating to other comprehensive income
-
(164,730)
(164,730)
Total comprehensive income for the year
-
559,991
559,991
Balance at 29 April 2023
500,000
3,053,240
3,553,240
GEO HOULTON & SONS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 APRIL 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
20
(1,309,239)
(815,660)
Income taxes refunded
311,135
1,060,428
Net cash (outflow)/inflow from operating activities
(998,104)
244,768
Investing activities
Purchase of tangible fixed assets
(192,475)
(134,080)
Proceeds from disposal of tangible fixed assets
25,453
15,319
Net cash used in investing activities
(167,022)
(118,761)
Financing activities
Payment of finance leases obligations
69,084
77,074
Net cash generated from financing activities
69,084
77,074
Net (decrease)/increase in cash and cash equivalents
(1,096,042)
203,081
Cash and cash equivalents at beginning of year
1,491,049
1,287,968
Cash and cash equivalents at end of year
395,007
1,491,049
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 APRIL 2023
- 14 -
1
Accounting policies
Company information

Geo Houlton & Sons Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hyperion Street, Hull, HU9 1BD.

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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. 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 goods and 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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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:

Plant and equipment
10-33% on cost
Fixtures and fittings
10-33% on cost
Motor vehicles
20-33% on cost
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 15 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting 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
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
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.

GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 16 -
1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
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.

1.10
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.

GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 18 -
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.

1.11
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.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 19 -
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.

1.14

Research and development

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

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.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
24,132,691
31,089,164
2023
2022
£
£
Turnover analysed by geographical market
UK
24,132,691
31,089,164
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional cost - Company restructure
-
157,168
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 20 -
5
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,000
14,300
Depreciation of owned tangible fixed assets
107,267
105,997
Profit on disposal of tangible fixed assets
(15,196)
(14,947)
6
Employees

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

2023
2022
Number
Number
Production
78
77
Admin
41
44
Total
119
121

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,193,226
4,327,079
Social security costs
443,601
435,345
Pension costs
201,303
190,017
4,838,130
4,952,441
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
587,945
605,705
Company pension contributions to defined contribution schemes
78,692
69,146
666,637
674,851
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
111,943
128,151
Company pension contributions to defined contribution schemes
14,850
14,850
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 21 -
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Unwinding of discount on pension obligation
(50,000)
(6,000)
9
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(311,135)
(257,350)
Deferred tax
Origination and reversal of timing differences
29,319
19,860
Total tax credit
(281,816)
(237,490)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(424,095)
(67,720)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(80,578)
(12,867)
Unutilised tax losses carried forward
80,578
32,727
Permanent capital allowances in excess of depreciation
29,319
-
0
Under/(over) provided in prior years
(311,135)
(257,350)
Taxation credit for the year
(281,816)
(237,490)

In addition to the amount credited to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
164,730
244,150
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 22 -
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 30 April 2022
866,857
901,506
570,712
2,339,075
Additions
89,360
10,401
92,714
192,475
Disposals
(69,941)
(312,765)
-
0
(382,706)
At 29 April 2023
886,276
599,142
663,426
2,148,844
Depreciation and impairment
At 30 April 2022
824,829
876,321
425,167
2,126,317
Depreciation charged in the year
28,420
14,609
66,564
109,593
Eliminated in respect of disposals
(60,168)
(312,281)
-
0
(372,449)
At 29 April 2023
793,081
578,649
491,731
1,863,461
Carrying amount
At 29 April 2023
93,195
20,493
171,695
285,383
At 29 April 2022
42,028
25,185
145,545
212,758
11
Financial instruments
12
Stocks
2023
2022
£
£
Raw materials and consumables
24,566
19,812
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,776,905
3,611,809
Gross amounts owed by contract customers
1,162,485
2,101,817
Amounts owed by group undertakings
1,824,528
2,030,126
Other debtors
-
0
32,399
Prepayments and accrued income
85,331
22,689
5,849,249
7,798,840
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 23 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
38,372
13,378
Trade creditors
4,044,921
6,073,675
Taxation and social security
558,174
1,398,707
Accruals and deferred income
289,868
258,959
4,931,335
7,744,719
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
107,786
63,696
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
38,372
13,378
In two to five years
107,786
63,696
146,158
77,074

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. 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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

17
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
43,684
14,365
Retirement benefit obligations
468,160
303,430
511,844
317,795
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
17
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 30 April 2022
317,795
Charge to profit or loss
194,049
Liability at 29 April 2023
511,844

The expected net reversal of deferred tax assets and liabilities in the year to 29th April 2023 is £25,840. This is due to the reversal of accelerated capital allowances and other short term timing differences.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
201,303
190,017

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.

Defined benefit schemes

The company closed the staff defined benefit pension scheme, Geo Houlton & Sons (Holdings) Limited Pension and Assurance Scheme, which provided benefits based on final pensionable earnings on 31st March 2015

 

The assets of the scheme are held separately from those of the company, in an independently administered fund. The contributions are determined by the directors with due consideration being given to the advice of a qualified actuary. The contributions determined by the actuary are on the basis of triennial valuations using the projected unit method. The most recent formal valuation in respect of the staff scheme was at 30th April 2022.

2023
2022
Key assumptions
%
%
Discount rate
4.8
3.1
Rate of inflation and pension increases
3.25
3.45
Statutory revaluation of leaver pensions
2.85
2.75
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
85.3
86.1
Retiring in 20 years
- Males
86.2
86.4
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
18
Retirement benefit schemes
(Continued)
- 25 -
2023
2022

Amounts recognised in the profit and loss account

£
£
Net interest on net defined benefit liability/(asset)
1,370,000
134,000
2023
2022

Amounts taken to other comprehensive income

£
£
Actual return on scheme assets
1,128,000
(54,000)
Less: calculated interest element
(1,128,000)
54,000
Return on scheme assets excluding interest income
-
-
Actuarial changes related to obligations
(1,995,000)
(1,231,000)
Other gains and losses
(292,000)
(194,000)
Total costs/(income)
(2,287,000)
(1,425,000)

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

2023
2022
£
£
Present value of defined benefit obligations
5,809,000
8,035,000
Fair value of plan assets
(8,359,000)
(9,632,000)
Surplus in scheme
(2,550,000)
(1,597,000)
2023

Movements in the present value of defined benefit obligations

£
Liabilities at 30 April 2022
8,035,000
Benefits paid
(473,000)
Actuarial gains and losses
(1,995,000)
Interest cost
242,000
At 29 April 2023
5,809,000
2023

The defined benefit obligations arise from plans funded as follows:

£
Wholly unfunded obligations
5,809,000
Wholly or partly funded obligations
-
5,809,000
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
18
Retirement benefit schemes
(Continued)
- 26 -
2023

Movements in the fair value of plan assets

£
Fair value of assets at 30 April 2022
9,632,000
Interest income
(1,128,000)
Benefits paid
(473,000)
Contributions by scheme members
36,000
Other
292,000
At 29 April 2023
8,359,000

The actual return on plan assets was £1,128,000 (2022 - £54,000).

2023
2022

Fair value of plan assets at the reporting period end

£
£
Equity instruments
3,560,934
5,690,000
Property
200,616
369,000
Bonds
3,268,369
2,243,000
Cash (Cash & Deposits)
1,304,004
1,294,000
Insured Pension Contracts
25,077
36,000
8,359,000
9,632,000
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
500,000
500,000
500,000
500,000
GEO HOULTON & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 27 -
20
Cash absorbed by operations
2023
2022
£
£
(Loss)/profit for the year after tax
(142,279)
169,770
Adjustments for:
Taxation credited
(281,816)
(237,490)
Finance costs
(50,000)
(6,000)
Gain on disposal of tangible fixed assets
(15,196)
(14,947)
Depreciation and impairment of tangible fixed assets
109,593
107,267
Pension scheme non-cash movement
(86,000)
(44,000)
Increase in provisions
50,000
6,000
Movements in working capital:
(Increase)/decrease in stocks
(4,754)
3,072
Decrease in debtors
1,949,591
583,709
Decrease in creditors
(2,838,378)
(1,383,041)
Cash absorbed by operations
(1,309,239)
(815,660)
21
Analysis of changes in net funds
30 April 2022
Cash flows
29 April 2023
£
£
£
Cash at bank and in hand
1,491,049
(1,096,042)
395,007
Obligations under finance leases
(77,074)
(69,084)
(146,158)
1,413,975
(1,165,126)
248,849
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