Company registration number 02806306 (England and Wales)
LINAKER LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LINAKER LTD
COMPANY INFORMATION
Directors
W Harrison
A Dhillon
C Curran
Secretary
A Dhillon
Company number
02806306
Registered office
Westfield House
Carlton Road
South Godstone
Surrey
RH9 8LG
Auditor
Moorgate Accountancy Ltd (Statutory Auditor)
Downsview House
141-143 Station Road East
Oxted
Surrey
UK
RH8 0QE
LINAKER LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
LINAKER LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023

 

Business Background

Linaker was established by Chairman Bill Harrison in 1993 to provide full building services with a specialist focus on hard services engineering and this continues to be its principal activity. Linaker prides itself on occupying a unique position in the marketplace, that being, a privately-owned business that has full national reach, providing pioneering partnerships to a diverse range of clients – from world-famous brands to boutique portfolios. With an established office network in Birmingham, Bristol, Haydock, Livingston and Surrey and our new central London offices this year, Linaker offers a truly national service embodying exceptional local knowledge and know-how.

Review of the business

The Company has continued to grow organically in line with its 5-year mission to Pioneer Positive Partnerships. To fulfil this mission in 2023 the business determined strategic initiatives in 4 key areas:

 

  1. To increase the satisfaction of our people with improvement to our benefits & training, systems and working practices

  2. To continually improve client focus by creating value in our delivery; improving productivity through the use of technology and critical mass service diversification

  3. To reduce our impact on the planet through engaging ESG strategies

  4. To remain, as always, financially and commercially robust and responsible to protect and invest in our people, clients and the planet

 

Linaker finished the year having completed over 100% of its key in-year initiatives, some of the fundamentals are detailed below:

 

One Linaker

The original One Linaker initiative was successfully executed in Q1 2023, identifying further discoverable opportunities which have been added to this strategy to ensure maximum productivity, effectiveness and efficiency, not only in reference to our engineering resource, but also utilisation of our supply chain partners and BOH functions. This included the implementation of full telematics, AI dashboards; utilising power BI technologies and a centralised sub-contractor work management and portal system and streamlining documentation depositaries and sharing capabilities.

 

The business achieved a “Highly Commended” accolade at industry awards for technology innovation.

 

Talent Acquisition and Retention

In line with 2022’s strategy, we have an established and growing internal talent acquisition team, which has created significant savings, which have been invested to improve staff retention and people temperature. A HRIS system and strategic people performance management tools are now embedded and bearing fruit when measuring people satisfaction at key employment gates and via our annual survey. In 2024 we will utilise this data alongside incentivisation to further motivate performance and increase retention.

 

The business reported a Net Promoter score of 8.9, which is industry leading, and statistics such as 71% of our team members being HAPPY to come to work. This feedback allowed further understanding of appropriate and meaningful benefits, reinforcing our strong talent culture of being the employer of choice. We were also achieved equal opportunities accreditation, alongside living wage recognition.

Automation & Digitalisation strategy

We continue to trail blaze in terms of an Automation & Digitalisation strategy, introducing over 12 key developments to industry around productivity monitoring of field-based engineers, budget management at site level and CO2 reducing pre-emptive reactive maintenance.

 

Linaker will continue to develop high-quality digital solutions for customers and employees, build scalable and secure cloud-based technology platforms, resulting in continuous improvement to effectiveness and productivity within our operations and services as part of its key market differentiators.

LINAKER LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
ESG
Linaker introduced a Technical Division in 2021 and this area of the business has continued to flourish. Providing wrap around support to the business as we move into the realms of ESG reporting and more complex technologies to support our staff. ESG is a fundamental strategic focus moving into 2024, having already demonstrated our passion in this area through contribution to many joint client initiatives in the CSR space alongside being ahead of our reporting requirements legislatively and the introduction of fully recycled uniforms.
Commercial momentum
Commercial momentum has strengthened throughout 2023, and our opportunity pipeline is stronger than ever. Our conversion rates sit at 1:2, our profitability remains stable, through challenging strategic growth, and our innovative contracting models allow us to self-invest in our own growth.

Coupled with the businesses operational resilience consistently strengthening, our ability to grow will see a continuing improvement to our commercial positioning again throughout 2024.
2024
With significant contracts already awarded for commencement in Q1,2 &3 of 2023 and our business strategies now operating under a living continuous improvement belief - 2024 will see the business continuing on its growth strategy.

The Companies continued dynamic development can demonstrated by the following KPI's relative to 2022:

· Organic Growth of 46%
· Operating Profit increased by 72%
· Working Capital Increased by 40%
· Debtor Days improved by 27%
Principal risks and uncertainties

Market risk

Linaker operates nationwide in the FM sector, direct to end user or via managing agent. The market as a whole is buoyant and our client base is wide and varied.

 

We actively seek diversification in our client base, we do not take the position of subcontract to other contractors thus protecting our cash position and adding maximum value to our clients.

 

Credit risk

Following the significant bad debt suffered in 2021, our credit risk assessments continue to develop in rigor for all new clients. Where credit ratings are deemed inadequate, negotiations take place with clients and payment plans are agreed and monitored regularly.

 

Liquidity risks

We continue to investment in our credit control section. We continue to ensure contract cash flows are planned in a positive manner to ensure growth can continue to be funded organically. We will in 2024 be exploring more automation to improve processing speeds. Both the working capital and debtor days positions above demonstrate the progress made in this area.

On behalf of the board

A Dhillon
Director
9 April 2024
LINAKER LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of a national provider of buildings services.

 

Directors

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

W Harrison
A Dhillon
C Curran
Mr R Knight
(Resigned 1 January 2023)
Results and dividends

The results for the year are set out on page 8.

The dividend paid during the year was £136,459

 

Statement of directors' responsibilities

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

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

LINAKER LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
A Dhillon
Director
9 April 2024
LINAKER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LINAKER LTD
- 5 -
Opinion

We have audited the financial statements of Linaker Ltd (the 'company') for the year ended 31 December 2023 which comprise 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:

LINAKER LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LINAKER LTD
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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.

 

It is the primary responsibility of management, with oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for prevention and detection of fraud.

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

-Obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in.

-Enquired of entity staff in accounting & tax compliance functions to identify any instances of non-compliance

with laws and regulations.

- Reviewed journal entries and other adjustments for appropriateness,

- Enquiry of management, those charged with governance and the company’s legal advisors around actual and potential litigation and claims.

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

LINAKER LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LINAKER LTD
- 7 -
Peter Seed FCA
Senior Statutory Auditor
For and on behalf of Moorgate Accountancy Ltd (Statutory Auditor)
9 April 2024
Chartered Accountants
Statutory Auditor
Downsview House
141-143 Station Road East
Oxted
Surrey
UK
RH8 0QE
LINAKER LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
27,894,158
19,134,008
Cost of sales
(20,407,211)
(13,960,874)
Gross profit
7,486,947
5,173,134
Administrative expenses
(6,533,329)
(4,618,214)
Operating profit
5
953,618
554,920
Interest receivable and similar income
9
11,460
1,230
Interest payable and similar expenses
10
(16,419)
(18,821)
Profit before taxation
948,659
537,329
Tax on profit
11
(238,975)
(97,598)
Profit for the financial year
709,684
439,731

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

LINAKER LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
465,420
330,379
Investments
13
1
1
465,421
330,380
Current assets
Stocks
14
432,193
808,249
Debtors
15
6,626,027
5,471,986
Cash at bank and in hand
1,072,111
86,504
8,130,331
6,366,739
Creditors: amounts falling due within one year
16
(6,914,475)
(5,493,230)
Net current assets
1,215,856
873,509
Total assets less current liabilities
1,681,277
1,203,889
Creditors: amounts falling due after more than one year
17
(102,821)
(251,072)
Provisions for liabilities
Deferred tax liability
19
95,310
42,896
(95,310)
(42,896)
Net assets
1,483,146
909,921
Capital and reserves
Called up share capital
23
1,210
1,210
Profit and loss reserves
1,481,936
908,711
Total equity
1,483,146
909,921

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

The financial statements were approved by the board of directors and authorised for issue on 9 April 2024 and are signed on its behalf by:
A Dhillon
Director
Company registration number 02806306 (England and Wales)
LINAKER LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
1,210
598,980
600,190
Year ended 31 December 2022:
Profit and total comprehensive income
-
439,731
439,731
Dividends
-
(130,000)
(130,000)
Balance at 31 December 2022
1,210
908,711
909,921
Year ended 31 December 2023:
Profit and total comprehensive income
-
709,684
709,684
Dividends
-
(136,459)
(136,459)
Balance at 31 December 2023
1,210
1,481,936
1,483,146

The notes on pages 12 to 24 form part of these financial statements.

LINAKER LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
1,506,484
91,581
Interest paid
(16,419)
(18,821)
Net cash inflow from operating activities
1,490,065
72,760
Investing activities
Purchase of tangible fixed assets
(320,517)
(173,724)
Repayment of loans
(681)
-
Interest received
11,460
1,230
Net cash used in investing activities
(309,738)
(172,494)
Financing activities
Repayment of bank loans
(34,238)
(38,615)
Payment of finance leases obligations
(24,023)
(19,300)
Dividends paid
(136,459)
(130,000)
Net cash used in financing activities
(194,720)
(187,915)
Net increase/(decrease) in cash and cash equivalents
985,607
(287,649)
Cash and cash equivalents at beginning of year
86,504
374,153
Cash and cash equivalents at end of year
1,072,111
86,504
LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Linaker Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Westfield House, Carlton Road, South Godstone, Surrey, RH9 8LG.

1.1
Accounting convention

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

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

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

1.2
Going concern

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

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for 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
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
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.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

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% to 33%, Straight line over the useful life of the asset
Fixtures and fittings
10% Straight line over the useful life of the asset
Computers
20% to 33%, Straight line over the useful life of the asset
Motor vehicles
25% stright line over the useful life of the asset

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.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
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.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
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.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
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.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, 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.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities

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

1.11
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.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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

 

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

1.13
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.

1.14
Retirement benefits

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

1.15
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.16
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.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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 and other revenue
2023
2022
£
£
Other revenue
Interest income
11,460
1,230

 

4
Other income

Turnover

All turnover arose within the United Kingdom.

5
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Research and development costs
6,474
7,337
Depreciation of owned tangible fixed assets
185,095
137,917
Loss on disposal of intangible assets
46
-
LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,250
12,000
7
Employees

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

2023
2022
Number
Number
156
123

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
7,686,557
5,734,932
Social security costs
757,700
633,956
Pension costs
274,387
219,092
8,718,644
6,587,980
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
431,070
492,626
Company pension contributions to defined contribution schemes
87,324
99,089
518,394
591,715
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
242,160
145,510
LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
10,780
1,230
Other interest income
680
-
0
Total income
11,460
1,230
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
8,889
7,810
Interest on finance leases and hire purchase contracts
7,530
11,011
16,419
18,821
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
186,561
82,441
Deferred tax
Origination and reversal of timing differences
52,414
15,157
Total tax charge
238,975
97,598

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

2023
2022
£
£
Profit before taxation
948,659
537,329
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
237,165
102,093
Tax effect of expenses that are not deductible in determining taxable profit
1,712
3,324
Effect of change in corporation tax rate
(11,736)
-
0
Permanent capital allowances in excess of depreciation
(86,866)
(46,440)
Depreciation on assets not qualifying for tax allowances
46,274
23,464
Deferred tax adjustments in respect of prior years
52,414
15,157
Loss on sale of fixed assets
12
-
0
Taxation charge for the year
238,975
97,598
LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
202,205
65,342
296,072
161,925
725,544
Additions
92,673
22,445
174,549
30,850
320,517
Disposals
(16,084)
-
0
(100,818)
-
0
(116,902)
At 31 December 2023
278,794
87,787
369,803
192,775
929,159
Depreciation and impairment
At 1 January 2023
114,165
20,398
221,374
39,228
395,165
Depreciation charged in the year
75,421
8,779
69,439
31,456
185,095
Eliminated in respect of disposals
(15,673)
-
0
(100,848)
-
0
(116,521)
At 31 December 2023
173,913
29,177
189,965
70,684
463,739
Carrying amount
At 31 December 2023
104,881
58,610
179,838
122,091
465,420
At 31 December 2022
88,040
44,944
74,698
122,697
330,379
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
1
1
14
Stocks
2023
2022
£
£
Work in progress
432,193
808,249
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,370,053
5,054,652
Corporation tax recoverable
1,439
118,949
Amounts owed by group undertakings (see note 27)
116,802
116,802
Other debtors
99,803
46,049
Prepayments and accrued income
1,037,930
135,534
6,626,027
5,471,986
LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
43,014
40,509
Obligations under finance leases
18
99,913
24,024
Trade creditors
3,681,082
3,897,205
Corporation tax
186,561
82,441
Other taxation and social security
854,559
636,669
Deferred income
20
802,636
423,965
Other creditors
33,501
-
0
Accruals
1,213,209
388,417
6,914,475
5,493,230
17
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
102,821
151,159
Obligations under finance leases
18
-
0
99,913
102,821
251,072

Bank loans include a loan of £145,835 (2022- £191,668) obtained under the Coronavirus Business Interruption Loan Scheme. The loan is repayable over 5 years. The interest rate is 2.34% p.a. over Base Rate.

 

18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
99,913
24,024
In two to five years
-
0
99,913
99,913
123,937

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 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
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
95,310
42,896
2023
Movements in the year:
£
Liability at 1 January 2023
42,896
Charge to profit or loss
52,414
Liability at 31 December 2023
95,310
20
Deferred income
2023
2022
£
£
Other deferred income
802,636
423,965
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
274,387
219,092

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. Outstanding contribution at the year end is £nil (2022 £nil).

22
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023 and 31 December 2023
150,000
150,000
0.08
0.08
LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Share-based payment transactions
(Continued)
- 23 -

On 29th September 2021, 150,000 share options were granted under the company's EMI scheme. The options are equity settled and must be vested within 10 years of the grant date. The exercise price of each option is £0.08 and no options had been exercised at the balance sheet date.

 

 

23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of 0.1p each
1,000,000
1,000,000
1,000
1,000
A Ordinary Shares of 0.1p each
210,000
210,000
210
210
1,210,000
1,210,000
1,210
1,210
24
Operating lease commitments

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

2023
2022
£
£
Within one year
646,983
225,319
Between two and five years
956,012
268,285
1,602,995
493,604
25
Related party transactions

At the balance sheet date Linaker Limited was owed £116,802 (2022: £116,802) from a company under common control.

26
Directors' transactions

During the year an advanced of £30,243 (2022 £nil) was made to W A Harrison (director) which, with accrued interest of £680, was outstanding at the year end. .

27
Ultimate controlling party

The ultimate controlling party is W A Harrison.

LINAKER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
28
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
709,684
439,731
Adjustments for:
Taxation charged
238,975
97,598
Finance costs
16,419
18,821
Investment income
(11,460)
(1,230)
Depreciation and impairment of tangible fixed assets
185,095
137,917
Movements in working capital:
Decrease/(increase) in stocks
376,056
(630,471)
Increase in debtors
(1,236,081)
(1,958,392)
Increase in creditors
849,125
1,998,599
Increase/(decrease) in deferred income
378,671
(10,992)
Cash generated from operations
1,506,484
91,581
29
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
86,504
985,607
1,072,111
Borrowings excluding overdrafts
(191,668)
45,833
(145,835)
Obligations under finance leases
(123,937)
24,024
(99,913)
(229,101)
1,055,464
826,363
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