GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30 SEPTEMBER 2023 |
FOR |
MORRISH GROUP LIMITED |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30 SEPTEMBER 2023 |
FOR |
MORRISH GROUP LIMITED |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
For The Year Ended 30 September 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Consolidated Statement of Comprehensive Income | 7 |
Consolidated Balance Sheet | 8 |
Company Balance Sheet | 9 |
Consolidated Statement of Changes in Equity | 10 |
Company Statement of Changes in Equity | 11 |
Consolidated Cash Flow Statement | 12 |
Notes to the Consolidated Cash Flow Statement | 13 |
Notes to the Consolidated Financial Statements | 14 |
MORRISH GROUP LIMITED |
COMPANY INFORMATION |
For The Year Ended 30 September 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Registered Auditors |
5th Floor |
Waverley House |
115 - 119 Holdenhurst Road |
Bournemouth |
Dorset |
BH8 8DY |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
GROUP STRATEGIC REPORT |
For The Year Ended 30 September 2023 |
The directors present their strategic report of the company and the group for the year ended 30 September 2023. |
REVIEW OF BUSINESS |
The results for the year are set out on page 7. |
The key financial highlights of the business are as follows: |
2023 | 2022 | 2021 | 2020 |
£ | £ | £ | £ |
Turnover | 26,632,726 | 31,449,080 | 36,980,684 | 32,079,690 |
Profit on ordinary activities before taxation | 1,794,526 | 2,706,387 | 4,237,042 | 1,524559 |
% | % | % | % |
Turnover growth | (15.31) | (14.96) | 15.28 | 5.41 |
Gross profit margin | 20.88 | 20.98 | 14.46 | 14.89 |
The group experienced a slight reduction in turnover during the year which was predominantly driven by market conditions that were affected by both the rising cost of living and increases in mortgage rates. The gross profit margin was maintained due to the sales mix achieved on multiple sites during the year. We continue to pursue development opportunities throughout our region to secure long-term future supply. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The group is a homebuilder and developer and as such is reliant on the availability of mortgage products to fund its purchasers, funding lines to support its activities, and a ready supply of land supported by a fluent planning process. |
The group requires a pipeline of land and future projects to enable its business and consequently funding lines are required to support this. The relationship with, and the support of the group's funders is strong and sufficient facilities are in place to support its current and future development programme. |
The group seeks to maintain a spread of development sites, to enable it to offer a range of products to the market. The planning process remains cumbersome which, coupled with the nutrient issues imposed on the industry in our operating region, impacts the group's ability to bring current and future developments to the market in an orderly fashion. |
The group's investment in its wholly owned subsidiary, Projecte Taronja S.L. is carried in Euros so is subject to currency fluctuations. The group is not able to hedge against this risk, thus there remains an exposure to future adverse currency fluctuations mitigated by the continued strategic exit and liquidation of Spanish assets. |
ON BEHALF OF THE BOARD: |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
REPORT OF THE DIRECTORS |
For The Year Ended 30 September 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 30 September 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of a property developer and homebuilder. The company is a property investment and holding company. |
DIVIDENDS |
Dividends totalling £362,664 were declared and paid during the year ended 30 September 2023. |
FUTURE DEVELOPMENTS |
The group continues to develop its land bank but inevitably planning delays have restricted the delivery of homes to the market. The group in addition to its consortia commitments continues to actively pursue the extension of its existing land stocks through acquisition and the securing of longer term options. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 October 2022 to the date of this report. |
Other changes in directors holding office are as follows: |
FINANCIAL INSTRUMENTS |
The group's principal financial instruments comprise bank loans and overdrafts, trade creditors, other loans and finance lease agreements. The main purpose of these instruments is to provide funds for the group's working capital requirements and to finance group operations. |
Funding for current and future development sites are financed via a long-term bank facility, which ensures continuity of funding. The day to day fluctuations in working capital requirements are funded via an overdraft. |
The directors continue to closely monitor the group's required financing via its banking facilities. The group is a lessee in respect of finance lease assets. The liquidity risk in respect of these is managed in the same way as bank overdrafts and the loans above. Trade creditors liquidity risk is managed by ensuring there are sufficient funds available to the group to meet these amounts as they fall due. |
HEALTH AND SAFETY |
The group continues to pursue a vigorous monitoring of its health and safety obligations. |
ENVIRONMENTAL ISSUES |
The group's policy on environmental issues is to access their impact and whenever practical and cost effective to incorporate those within new sustainable developments. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
REPORT OF THE DIRECTORS |
For The Year Ended 30 September 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Schofields, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MORRISH GROUP LIMITED |
Opinion |
We have audited the financial statements of Morrish Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 30 September 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MORRISH GROUP LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
An understanding of the legal and regulatory framework the group operates in was obtained through discussions with directors and other management in addition to our general industry and sector experience. The most significant laws and regulations identified, being those that have a direct effect on material amounts and disclosures in the financial statements, are FRS 102, Companies Act 2006 and HM Revenue & Customs (HMRC) Tax Legislation. |
We also considered other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group's ability to operate, or to avoid material penalty. These included the requirements of the various Health and Safety Regulations and The Landlord and Tenant Act 1985. |
Audit procedures were performed to obtain sufficient evidence regarding compliance. These procedures include making enquiries to directors and other management in addition to the inspection of applicable regulatory and legal correspondence. Financial statement disclosures were reviewed and tested to supporting documentation. |
Enquiries were also made to the directors and other management to assess the group's internal control environment and their policies and procedures on fraud risk. The group's systems and controls were documented, and audit procedures were designed to test these controls. Further, the risk of management override of controls was addressed through testing journal entries and other adjustments for appropriateness. The judgements made in making accounting estimates were assessed for any indication of potential bias, and the business rationale of significant transactions outside the normal course of the business was evaluated. |
We have properly planned and performed the audit in accordance with auditing standards and all members of the engagement team have the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. However, the inherent nature of the audit, and the limited procedures performed, means there is an unavoidable risk that some irregularities may have gone undetected. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Registered Auditors |
5th Floor |
Waverley House |
115 - 119 Holdenhurst Road |
Bournemouth |
Dorset |
BH8 8DY |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
For The Year Ended 30 September 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 3 | 26,632,726 | 31,449,080 |
Cost of sales | (21,072,986 | ) | (24,851,235 | ) |
GROSS PROFIT | 5,559,740 | 6,597,845 |
Administrative expenses | (3,081,325 | ) | (3,449,376 | ) |
OPERATING PROFIT | 5 | 2,478,415 | 3,148,469 |
Loss/(gain) on foreign exchange | 6 | (7,087 | ) | 14,097 |
Gain on sale of investment property | 6 | 388,769 | 8,000 |
2,860,097 | 3,170,566 |
Interest receivable and similar income | 3 | 6 |
2,860,100 | 3,170,572 |
Interest payable and similar expenses | 7 | (1,065,574 | ) | (464,185 | ) |
PROFIT BEFORE TAXATION | 1,794,526 | 2,706,387 |
Tax on profit | 8 | (279,252 | ) | (666,010 | ) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
1,515,274 |
2,040,377 |
Profit attributable to: |
Owners of the parent | 1,515,274 | 2,040,377 |
Total comprehensive income attributable to: |
Owners of the parent | 1,515,274 | 2,040,377 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
CONSOLIDATED BALANCE SHEET |
30 September 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 11 | 164,497 | 199,556 |
Investments | 12 | - | - |
Investment property | 13 | 10,327,024 | 11,450,853 |
10,491,521 | 11,650,409 |
CURRENT ASSETS |
Stocks | 14 | 47,227,727 | 34,878,145 |
Debtors | 15 | 3,090,981 | 954,170 |
Cash at bank and in hand | 952,025 | 317,778 |
51,270,733 | 36,150,093 |
CREDITORS |
Amounts falling due within one year | 16 | 24,992,025 | 11,637,313 |
NET CURRENT ASSETS | 26,278,708 | 24,512,780 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
36,770,229 |
36,163,189 |
CREDITORS |
Amounts falling due after more than one year | 17 | (1,957,425 | ) | (2,385,000 | ) |
PROVISIONS FOR LIABILITIES | 21 | (528,539 | ) | (646,534 | ) |
NET ASSETS | 34,284,265 | 33,131,655 |
CAPITAL AND RESERVES |
Called up share capital | 22 | 2,014,800 | 2,014,800 |
Non-distributable revaluation reserve | 23 | 4,022,821 | 4,462,221 |
Retained earnings | 23 | 28,246,644 | 26,654,634 |
SHAREHOLDERS' FUNDS | 34,284,265 | 33,131,655 |
The financial statements were approved by the Board of Directors and authorised for issue on 23 February 2024 and were signed on its behalf by: |
D Morrish - Director |
E J C Rapson - Director |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
COMPANY BALANCE SHEET |
30 September 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 11 |
Investments | 12 |
Investment property | 13 |
CURRENT ASSETS |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 17 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 21 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 22 |
Non-distributable revaluation reserve | 23 |
Retained earnings | 23 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 2,931,181 | 1,953,304 |
The financial statements were approved by the Board of Directors and authorised for issue on |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
For The Year Ended 30 September 2023 |
Called up | Non-distributable |
share | Retained | revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 October 2021 | 2,014,800 | 24,759,347 | 4,619,351 | 31,393,498 |
Changes in equity |
Dividends | - | (302,220 | ) | - | (302,220 | ) |
Total comprehensive income | - | 2,197,507 | (157,130 | ) | 2,040,377 |
Balance at 30 September 2022 | 2,014,800 | 26,654,634 | 4,462,221 | 33,131,655 |
Changes in equity |
Dividends | - | (362,664 | ) | - | (362,664 | ) |
Total comprehensive income | - | 1,954,674 | (439,400 | ) | 1,515,274 |
Balance at 30 September 2023 | 2,014,800 | 28,246,644 | 4,022,821 | 34,284,265 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
For The Year Ended 30 September 2023 |
Called up | Non-distributable |
share | Retained | revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 October 2021 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) |
Balance at 30 September 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) |
Balance at 30 September 2023 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
CONSOLIDATED CASH FLOW STATEMENT |
For The Year Ended 30 September 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | (13,458,135 | ) | (5,787,341 | ) |
Interest paid | (1,065,574 | ) | (464,185 | ) |
Tax paid | (522,197 | ) | (314,580 | ) |
Net cash from operating activities | (15,045,906 | ) | (6,566,106 | ) |
Cash flows from investing activities |
Purchase of tangible fixed assets | (56,042 | ) | (54,241 | ) |
Sale of tangible fixed assets | - | 21,000 |
Sale of investment property | 1,514,345 | 206,000 |
Interest received | 3 | 6 |
Net cash from investing activities | 1,458,306 | 172,765 |
Cash flows from financing activities |
New loans in year | 12,000,000 | 1,000,000 |
Loan repayments in year | (426,000 | ) | (260,000 | ) |
Equity dividends paid | (362,664 | ) | (302,220 | ) |
Net cash from financing activities | 11,211,336 | 437,780 |
Decrease in cash and cash equivalents | (2,376,264 | ) | (5,955,561 | ) |
Cash and cash equivalents at beginning of year | 2 | 246,088 | 6,201,649 |
Cash and cash equivalents at end of year | 2 | (2,130,176 | ) | 246,088 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
For The Year Ended 30 September 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation | 1,794,526 | 2,706,387 |
Depreciation charges | 91,039 | 158,016 |
Profit on disposal of fixed assets | (399,116 | ) | (15,837 | ) |
Net (gain)/loss on foreign exchange | 7,087 | (10,268 | ) |
Trading stock capitalised | - | (753,125 | ) |
Finance costs | 1,065,574 | 464,185 |
Finance income | (3 | ) | (6 | ) |
2,559,107 | 2,549,352 |
Increase in stocks | (12,349,582 | ) | (9,237,748 | ) |
(Increase)/decrease in trade and other debtors | (2,136,811 | ) | 66,867 |
(Decrease)/increase in trade and other creditors | (1,530,849 | ) | 834,188 |
Cash generated from operations | (13,458,135 | ) | (5,787,341 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 30 September 2023 |
30/9/23 | 1/10/22 |
£ | £ |
Cash and cash equivalents | 952,025 | 317,778 |
Bank overdrafts | (3,082,201 | ) | (71,690 | ) |
(2,130,176 | ) | 246,088 |
Year ended 30 September 2022 |
30/9/22 | 1/10/21 |
£ | £ |
Cash and cash equivalents | 317,778 | 6,201,649 |
Bank overdrafts | (71,690 | ) | - |
246,088 | 6,201,649 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1/10/22 | Cash flow | At 30/9/23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 317,778 | 634,247 | 952,025 |
Bank overdrafts | (71,690 | ) | (3,010,511 | ) | (3,082,201 | ) |
246,088 | (2,376,264 | ) | (2,130,176 | ) |
Debt |
Debts falling due within 1 year | (1,260,000 | ) | (12,000,000 | ) | (13,260,000 | ) |
Debts falling due after 1 year | (2,385,000 | ) | 427,575 | (1,957,425 | ) |
(3,645,000 | ) | (11,572,425 | ) | (15,217,425 | ) |
Total | (3,398,912 | ) | (13,948,689 | ) | (17,347,601 | ) |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
For The Year Ended 30 September 2023 |
1. | STATUTORY INFORMATION |
Morrish Group Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
- the requirements of Section 7 Statement of Cash Flows. |
Basis of consolidation |
The consolidated financial statements present financial information about the group as a single economic entity through combining the financial statements of the company and all of its subsidiaries as identified in note 12. Intragroup balances and transactions are eliminated in full. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
Significant judgements and estimates |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenue and expenses during the year. However the nature of estimation means the actual outcomes could differ from those involving estimates. The group constantly re-evaluates these significant factors and makes adjustments where facts and circumstances dictate. |
The directors have made the following judgements and estimates deemed applicable to the financial statements: |
Construction contracts |
When the outcome of a construction contract can be estimated reliably, contract revenue and costs associated with the construction contract are recognised by reference to the stage of completion of the contract activity at the reporting date. |
Outcomes of construction contracts are estimated using internally generated detailed costings. The stage of completion is measured using surveys of the work performed, undertaken by third party quantity surveyors. |
Investment property valuation |
Investment properties are valued annually based on their fair value, being the directors' estimate of the amounts for which the properties could be exchanged between knowledgeable, willing parties in an arm's length transaction. |
Site infrastructure costs |
Costs incurred relating to the construction of development infrastructure such as road, drainage and services are held in work-in-progress and expensed on an average basis across the residential plots on each development. |
Future site-infrastructure costs in respect to sold plots are estimated using internally generated detailed costings, and presented within creditors. |
Turnover |
Turnover is recognised when economic benefits flow to the group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding value added tax and other sales taxes. Turnover from property sales is recognised on completion. |
Tangible fixed assets |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
2. | ACCOUNTING POLICIES - continued |
Investment property |
Investment properties are revalued annually based on their fair value. Changes to fair value go through the income statement. Gains are not realised and as such are not subject to current tax and are regarded as non-distributable. Depreciation is not provided. |
Stocks and construction contracts |
Stocks and work in progress are valued at the lower of cost and net realisable value. Costs comprise direct materials and, where applicable, direct labour and those overheads that have been incurred in bringing the inventories to their present location and condition. |
When the outcome of a construction contract can be estimated reliably, contract revenue and costs associated with the construction contract are recognised by reference to the stage of completion of the contract activity at the reporting date. When it is probable that total contract costs will exceed total contract revenue on a construction contract, the expected loss is recognised as an expense immediately. |
Recorded turnover in excess of payments on account are classified as amounts recoverable on contracts and are separately disclosed within debtors. The balance of payments on account are classified as payments on account and separately disclosed within creditors. |
The stage of completion of a construction contract is measured using surveys of the work performed. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Financial instruments |
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account. |
Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured as amortised cost using the effective interest rate method, less impairment. |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
Sale of properties (external) | 21,984,609 | 24,980,292 |
Sale of properties (internal) | - | 753,125 |
Construction contracts | 3,850,553 | 4,895,188 |
Net rental income | 774,713 | 794,620 |
Sundry income | 22,851 | 25,855 |
26,632,726 | 31,449,080 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 3,358,441 | 2,945,041 |
Social security costs | 448,366 | 376,804 |
Pension costs | 108,334 | 91,059 |
3,915,141 | 3,412,904 |
The average monthly number of employees during the year was as follows: |
2023 | 2021 |
Administration | 52 | 45 |
Production | 20 | 23 |
72 | 68 |
2023 | 2022 |
£ | £ |
Directors' remuneration | 519,674 | 584,873 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 3 | 4 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc | 153,750 | 155,000 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets | 91,039 | 158,016 |
Loss/(profit) on disposal of fixed assets | 62 | (7,837 | ) |
Auditors' remuneration | 22,500 | 21,500 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
6. | EXCEPTIONAL ITEMS |
2023 | 2022 |
£ | £ |
Loss/(gain) on foreign exchange | (7,087 | ) | 14,097 |
Gain on sale of investment property | 388,769 | 8,000 |
381,682 | 22,097 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank interest | 1,065,574 | 464,185 |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | 402,659 | 530,994 |
UK corporation tax group tax losses utilised | (5,412 | ) | (2,875 | ) |
Total current tax | 397,247 | 528,119 |
Deferred tax | (117,995 | ) | 137,891 |
Tax on profit | 279,252 | 666,010 |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax | 1,794,526 | 2,706,387 |
Profit multiplied by the standard rate of corporation tax in the UK of 22.008 % (2022 - 19 %) |
394,939 |
514,214 |
Effects of: |
Expenses not deductible for tax purposes | 653 | 980 |
Capital allowances in excess of depreciation | (1,452 | ) | (2,833 | ) |
Utilisation of tax losses | (4,242 | ) | - |
Investment property revaluations and disposals | (109,827 | ) | (1,520 | ) |
Deferred tax rate differential | (819 | ) | 155,169 |
Total tax charge | 279,252 | 666,010 |
UK corporation tax has been charged at 22% (2022 - 19%). Deferred tax has been charged at 25% (2022 - 25%). |
9. | INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
10. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Ordinary shares of £1 each |
Interim | 362,664 | 302,220 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
11. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Plant and | and | Motor | Computer |
machinery | fittings | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 October 2022 | 281,796 | 167,334 | 287,474 | 115,145 | 851,749 |
Additions | 29,780 | 10,450 | - | 15,812 | 56,042 |
Disposals | (457 | ) | (15,896 | ) | - | (5,872 | ) | (22,225 | ) |
Exchange differences | (116 | ) | - | - | - | (116 | ) |
At 30 September 2023 | 311,003 | 161,888 | 287,474 | 125,085 | 885,450 |
DEPRECIATION |
At 1 October 2022 | 230,213 | 155,706 | 191,005 | 75,269 | 652,193 |
Charge for year | 24,655 | 5,825 | 37,162 | 23,397 | 91,039 |
Eliminated on disposal | (445 | ) | (15,882 | ) | - | (5,836 | ) | (22,163 | ) |
Exchange differences | (116 | ) | - | - | - | (116 | ) |
At 30 September 2023 | 254,307 | 145,649 | 228,167 | 92,830 | 720,953 |
NET BOOK VALUE |
At 30 September 2023 | 56,696 | 16,239 | 59,307 | 32,255 | 164,497 |
At 30 September 2022 | 51,583 | 11,628 | 96,469 | 39,876 | 199,556 |
12. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 October 2022 |
and 30 September 2023 |
NET BOOK VALUE |
At 30 September 2023 |
At 30 September 2022 |
The following were the subsidiary undertakings of the company at the year end: |
Country of | Class of |
Subsidiary undertaking | Incorporation | Shares | % Holding | Nature of business |
Morrish Builders (Poole) Limited | England and Wales | Ordinary | 100 | Holding company |
Morrish Homes * | England and Wales | Ordinary | 100 | Property developers |
Projecte Taronja S.L. | Spain | Ordinary | 100 | Property developers |
* held indirectly |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
13. | INVESTMENT PROPERTY |
Group |
Total |
£ |
FAIR VALUE |
At 1 October 2022 | 11,450,853 |
Disposals | (1,123,829 | ) |
At 30 September 2023 | 10,327,024 |
NET BOOK VALUE |
At 30 September 2023 | 10,327,024 |
At 30 September 2022 | 11,450,853 |
Fair value at 30 September 2023 is represented by: |
£ |
Valuation in 2023 | 10,327,024 |
If investment property had not been revalued it would have been included at the following historical cost: |
2023 | 2022 |
£ | £ |
Cost | 5,797,967 | 6,392,067 |
Company |
Total |
£ |
FAIR VALUE |
At 1 October 2022 |
Additions |
Disposals | ( |
) |
At 30 September 2023 |
NET BOOK VALUE |
At 30 September 2023 |
At 30 September 2022 |
Investment properties were valued at 30 September 2023 by the directors, who have concluded that there has been no change to the value of the property portfolio since the previous balance sheet date. The valuations were undertaken with reference being made to valuations previously provided by professionally qualified external valuers. |
The fair value of the investment properties has primarily been determined using a market approach, which has provided an indication of value by comparing the subject asset with similar assets for which price information is available. Other factors were also considered when deriving fair value, these include, but are not limited to, rental yields and lease terms. |
14. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Stock of land | 13,408,823 | 15,196,371 |
Work-in-progress | 33,818,904 | 19,681,774 |
47,227,727 | 34,878,145 |
Stock of land and work-in-progress recognised in cost of sales during the year as an expense amounted to £20,984,642 (2022 - £24,657,395). |
Stock totalling £47,141,755 (2022 - £34,777,243) has been pledged as security by way of fixed and floating charges. |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
15. | DEBTORS |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 574,211 | 535,506 |
Amounts owed by group undertakings | - | - |
Amounts recoverable on contracts | 2,167,915 | - |
Other debtors | 2,797 | 1,026 |
Called up share capital | 2 | 2 | - | - |
Value added tax | 168,257 | 256,369 | - | - |
Prepayments and accrued income | 177,799 | 123,267 |
3,090,981 | 916,170 |
Amounts falling due after more than one year: |
Trade debtors | - | 38,000 |
Aggregate amounts | 3,090,981 | 954,170 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 18) | 16,342,201 | 1,331,690 |
Trade creditors | 7,118,186 | 8,457,607 |
Corporation tax | 190,392 | 315,342 |
Social security and other taxes | 160,818 | 140,877 |
Value added tax | - | - | 166,924 | 31,175 |
Accruals and deferred income | 1,180,428 | 1,391,797 |
24,992,025 | 11,637,313 |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans (see note 18) | 1,957,425 | 2,385,000 |
18. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank overdrafts | 3,082,201 | 71,690 |
Bank loans | 13,260,000 | 1,260,000 |
16,342,201 | 1,331,690 |
Amounts falling due between one and two years: |
Bank loans - 1-2 years | 260,000 | 260,000 |
Amounts falling due between two and five years: |
Bank loans - 2-5 years | 1,697,425 | 2,125,000 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
18. | LOANS - continued |
The bank loan creditor represents a five year fixed term bank loan and revolving credit facility, both with a market rate of interest linked to the Bank of England base rate. |
19. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year | 200,218 | 85,381 |
Between one and five years | 335,983 | 238,207 |
536,201 | 323,588 |
20. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
£ | £ |
Bank overdrafts | 3,082,201 | 71,690 |
Bank loans | 15,217,425 | 3,645,000 |
18,299,626 | 3,716,690 |
Loans are secured by way of various fixed and floating charges over the group's assets including land stock and investment property. |
21. | PROVISIONS FOR LIABILITIES |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Deferred tax | 528,539 | 646,534 | 503,596 | 614,732 |
Group |
Deferred |
tax |
£ |
Balance at 1 October 2022 | 646,534 |
Provided during year | (117,995 | ) |
Balance at 30 September 2023 | 528,539 |
Company |
Deferred |
tax |
£ |
Balance at 1 October 2022 |
Provided during year | ( |
) |
Balance at 30 September 2023 |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
21. | PROVISIONS FOR LIABILITIES - continued |
The company deferred tax provision is in respect to investment property revaluation. |
The group deferred tax provision is analysed as follows: |
2023 | 2022 |
Accelerated capital allowances | 22,302 | 29,161 |
Investment property revaluation | 506,237 | 617,373 |
528,539 | 646,534 |
22. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 2,014,800 | 2,014,800 |
23. | RESERVES |
Group |
Non-distributable |
Retained | revaluation |
earnings | reserve | Totals |
£ | £ | £ |
At 1 October 2022 | 26,654,634 | 4,462,221 | 31,116,855 |
Profit for the year | 1,515,274 | 1,515,274 |
Dividends | (362,664 | ) | (362,664 | ) |
Transfer from retained |
earnings to non-distributable |
revaluation reserve | 439,400 | (439,400 | ) | - |
At 30 September 2023 | 28,246,644 | 4,022,821 | 32,269,465 |
Company |
Non-distributable |
Retained | revaluation |
earnings | reserve | Totals |
£ | £ | £ |
At 1 October 2022 | 28,887,776 |
Profit for the year |
Dividends | ( |
) | ( |
) |
Transfer from retained |
earnings to non-distributable |
revaluation reserve | 468,229 | (468,229 | ) | - |
At 30 September 2023 | 31,456,293 |
Retained earnings represents cumulative profits and losses net of dividends and other adjustments. |
The non-distributable revaluation reserve represents the cumulate effect of revaluations of investment property, to assist with the identification of profits available for distribution. |
24. | RELATED PARTY DISCLOSURES |
Key management personnel of the entity or its parent (in the aggregate) |
2023 | 2022 |
£ | £ |
Sales | 310,000 | - |
MORRISH GROUP LIMITED (REGISTERED NUMBER: 11492659) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
For The Year Ended 30 September 2023 |
24. | RELATED PARTY DISCLOSURES - continued |
Other related parties |
2023 | 2022 |
£ | £ |
Management fees received | 13,554 | 13,339 |
Rent paid | 52,381 | 69,310 |
During the year, a total of key management personnel compensation of £ 560,452 (2022 - £ 623,681 ) was paid. |