Company registration number 06328322 (England and Wales)
PREMIER FOREST GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
PREMIER FOREST GROUP LIMITED
COMPANY INFORMATION
Directors
T E A Edgell
D J Howells
N J Williams
N Davies
(Appointed 15 August 2022)
Company number
06328322
Registered office
Premier Forest Products West Way Road
Alexandra Dock
Newport
United Kingdom
NP20 2PQ
Auditor
Azets Audit Services
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
PREMIER FOREST GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 22
PREMIER FOREST GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 1 -

The directors present the strategic report for the year ended 30 April 2023.

Review of the business

The company is an intermediate holding company within the group headed by Premier Forest UK Group Holdings Limited. The company's purpose is to hold shares in Premier Forest Products Limited, a trading company whose activity is that of timber supply. The strategic aim of this business is the same as its subsidiary and its aims are noted as follows.

 

Premier Forest Products (Premier) is one of the UK’s leading importers and distributors of timber and timber-based products. The company was established in 1993 and operates out of its head office in Newport, South Wales.

 

The directors are pleased to report that Premier has continued to make excellent progress in the year. The previous trading year (to April 2022) reflected unprecedented financial results where strong demand and some supply shortages in the market contributed to significant product price inflation, particularly in the 1st half but falling back somewhat in the 2nd half as supply came more into line with demand. The trading year ended 30 April 2023 saw more normal market conditions return with supply chains becoming less strained and more general stability in market prices, although the latter are still at higher levels than those achieved before the Covid-19 pandemic.

 

Progressive thinking, quality, integrity and value combine to make Premier a highly competitive force in the market. Alongside the prerequisite requirements of a competitive price and a fast and efficient service, the directors firmly believe that Premier, in addition to having a leading brand, offers a level of expertise, trust and understanding that goes beyond that of its competitors.

PREMIER FOREST GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 2 -
Principal risks and uncertainties

General Market Conditions: Premier's main markets are dependent on general economic conditions (including interest rates, inflation and general cost of living pressures). The situation remains uncertain and it remains to be seen the impact of persistently higher inflation levels and the geopolitical backdrop on the economy. At this point, it is not possible to predict the full extent of any potential future market changes and impact if any on revenues. Premier continues to have a strong balance sheet position at year end. To best protect Premier, the directors continue to manage stringently all costs and all elements of working capital to enhance operating cash inflows during this period.

 

People: A strong and experienced management team, and committed, knowledgeable staff at every level of the business constitute the primary raw ingredient for Premier’s growth and success. Whilst the loss of no one individual would represent a significant long-term threat to the business in its own right, sustained erosion or, transversely, difficulties in continuing to attract new talent to help drive growth could present problems. Fortunately, Premier greatly values its staff as its primary asset. This approach engenders a high degree of loyalty and commitment from staff, meaning staff turnover is extremely low, and Premier is seen as an attractive employer within the industry.

 

Competition: In general, the timber products market remains a crowded and volatile one, and one that is often subject to extremely changeable market conditions. This does lead to both shortages and acute over-supply situations. As some of Premier’s competitors are more dependent on commodity materials for their income, they are more prone to problems resulting from these market swings. When it occurs, oversupply represents a bigger problem, as some of Premier’s competitors are quick to liquidate stock in large volumes, driving down prices and margins sharply. Premier has spent many years building its defences against this recurrent trend; significant diversification in product offering and customer sectors now provides robust insulation against the worst of these fluctuations. Significant capital investment was progressed during the year ended 30 April 2023, in particular focussing on further enhancing Premier's timber processing capabilities. Agile decision-making, fast responses to changing market conditions, and efficient purchasing also further mitigate the risk. Indeed, in a falling market, Premier often benefits.

 

Health & Safety: For a group which operates multiple sites with many risk factors (including heavy vehicles and lifting equipment, storage and stacking risks, complex and hazardous wood-processing machinery etc), the potential danger to staff, customers and the wider public is a perennial concern. Failure by the group to execute the lawful obligations to protect all parties from harm represents a threat which cannot be underestimated. Considerable resource and management time is allocated to ensuring risk mitigation is of paramount concern. External consultation is employed to provide impartial observation and critique and a robust process exists to provide a framework for Health & Safety management in the business. It is an ongoing process, which seeks continuous improvement. If at any point Health & Safety concerns regarding any operation, site or function are deemed too great to be overcome to the required standard, the group will not hesitate to call a halt to that activity in order to remove the risk entirely.

 

UKTR: UK Timber Regulation rules exist to heavily penalise any UK importer found to have imported timber deemed to be from an illegal source/supply chain. The law is robust enough to result in criminal prosecutions and substantial fines. The damage to the business and its reputation, should it be found to be in breach, could be significant. Risk mitigation and extremely detailed and forensic supply chain examination is therefore carried out independently by an expert supply chain auditing company, Track Record. This provides Premier with highly accurate and transparent scoring of every single supplier and contract enabling forward-facing assessment of risk and removal of supplier which could constitute a threat.

PREMIER FOREST GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 3 -
SECTION 172 (1) STATEMENT

Stakeholder engagement

The directors of Premier Forest Group Limited and of its subsidiary Premier Forest Products Limited have executed their duties in full accordance with section 172 (1) Companies Act 2006, ensuring all relevant decisions during the course of the year were taken explicitly in order to safeguard and further the success of the business, in good faith and meeting all legal obligations.

Structural changes made to the business during the last year were made following considerable scrutiny and careful consideration by the board of directors, as part of a medium and long-term strategy to strengthen Premier’s position within the UK as a diverse, service-orientated, and market-leading supplier of timber products.

Key stakeholder groups essential to the success of the business are an integral consideration in the decision making processes, and the impact of any such decisions upon those groups is carefully assessed to ensure that the nett effects are positive. Those key stakeholder groups include:

Employees                                                      

Premier has always recognised that the key to the successful implementation of our plans and strategies are down to the willing and efficient participation of our staff.

Professional, loyal and committed staff and management are at the heart of everything we do, so it is essential for the business to recruit, train and retain the very best. Premier’s proportion of long-service staff and our low turnover bear testament to the value we place upon our people and the investments we make in them.

Our management culture places the physical and mental well-being of our staff at the core of its values. A rigorous and well-managed Health & Safety regime is enforced across all sites, with structured, regular and active participation by the relevant management teams and representatives. Mental Health is a subject dear to our hearts; we take the mental well-being of our staff very seriously and we invest heavily in both time and effort to compassionately support any staff members experiencing difficulties in their lives.

We are proud to be able to demonstrate an excellent record of professional development within our management team and beyond. We make full use of the opportunities created by the dynamic and ambitious growth of our company to further the development and careers of those staff with the desire and aptitude for progression. Overall, the business culture within Premier makes it an easy, enjoyable and, above all, fair environment for all our staff to thrive in, where success and commitment is rewarded.

The group conducts regular board and senior management meetings in a correct, structured and recorded fashion. Strategies and directives resulting from these meetings are immediately communicated to relevant management parties and staff via clear internal communications. Staff meetings are organised and held wherever and whenever significant changes within the operations of the business (or external circumstances) are likely to directly impact staff, and reciprocal engagement is both encouraged and listened to.

Customers                                                      

Of equal value to our staff are our customers. Retention, growth and diversification of our customer-base in key target areas are at the very centre of our strategic objectives. Attentive, knowledgeable and professional representation and customer service is a key strength of Premier. Our performance in these areas is constantly measured through data and anecdotal evidence, and every effort is made to continually surpass our customers’ expectations. Training and investment to ensure we maintain a keenly competitive edge in these areas is prioritised. Premier operates in a largely commodity-driven marketplace, which is highly susceptible to market fluctuations caused by global trends. In order to ride out the resultant peaks and troughs, Premier enhances its value to its customers beyond competitive pricing wherever possible, and it is that extra dimension which enables our business to form long-lasting and mutually beneficial partnerships with our clients.

Funders and financial institutions

Premier enjoys strong and enduring support from its chosen financial partners. That support is constantly fortified by strong and transparent relationships which benefit from accurate, reliable and prompt financial management reporting. This enables our financial partners to monitor our financial headroom and performance with significant assuredness. The relationship with our banker HSBC stretches back to the inception of Premier and has been mutually beneficial to both parties over this time.

PREMIER FOREST GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 4 -

Suppliers                                                        

Maintaining a competitive edge in a constantly changing market is essential to our continuing success. That is dependent on the strength of relationships we develop with strategic long-term supply partners. Premier’s senior purchasing and commercial management team facilitate excellent relationships with our key supply infrastructure. These relationships ensure maximum exposure to market opportunities, the best financial and product delivery agreements, and collaborative agendas for mutually beneficial growth.

Shareholders

Premier’s board of directors includes the shareholders of the ultimate holding company Premier Forest UK Group Holdings Ltd. Non-shareholding directors on the board diligently fulfil their obligations to the shareholders and the business to ensure success beneficial to both entities.

Local community                                                         

As a diverse, multi-site operation, we recognise and fulfil our obligations to be considerate of the impact we have upon our neighbours, our local communities, and the wider environment. Premier’s plans for development, as well as our day-to-day operations, take full consideration of our social and legal responsibilities and actively aim to minimise our environmental impact.

Our management teams are well advised and trained, and are supported by additional external consultation where required, to ensure we operate to the highest professional standards of conduct and governance in respect of environmental legislation. Our investments in on-site renewable energy generation further offset our carbon footprint.

We strive to be sensitive to any concerns from local communities that may arise regarding our operations at any point, and always seek to resolve any concerns through active engagement and dialogue. Premier continues to support many local community projects and youth groups when approached, through donation and sponsorship, and we hope that such involvement and consideration helps maintain Premier’s standing within our local communities, so many members of whom we employ.

 

FUTURE DEVELOPMENTS

The directors believe that future-year results will continue to show a solid financial performance following actions undertaken in the current year.

On behalf of the board

T E A Edgell
Director
20 December 2023
PREMIER FOREST GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 5 -

The directors present their annual report and financial statements for the year ended 30 April 2023.

Principal activities

The principal activity of the company continued to be that of an intermediary holding company within the Premier Forest Product Group of Companies.

Results and dividends

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £2,055,000 (2022: £6,200,000). The directors do not recommend payment of a final dividend.

Directors

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

T E A Edgell
D J Howells
P W J Morgan
(Resigned 31 December 2022)
N J Williams
N Davies
(Appointed 15 August 2022)
Future developments

Strategy, likely future developments and post balance sheet events in the business of the company are discussed in the strategic report.

 

Going concern

 

The company is part of a group headed by Premier Forest UK Group Holdings Limited. In preparing the financial statements, the directors have considered the current financial position of the company and group and the likely future cash flows. At the date of signing the financial statements, the directors have concluded that it is appropriate to prepare them on a going concern basis. In forming this conclusion, the directors have considered the group's strong financial performance in the current financial year and prospects for the subsequent financial periods. The directors have reviewed projected cash flows and have considered different market scenarios within this based on sensitivities if market demand changes. The group's costs and working capital requirements are managed rigorously. The group’s trading activities are forecast to generate positive future cash flows for at least 12 months from the date the financial statements are signed, thus enabling the group to meet its obligations as they fall due.

 

The group has an import line facility and an invoice finance facility to assist with the financing of the business together with a fixed term loan. The group has met all capital and interest payments as they have fallen due in respect of financing arrangements, up to the date of approving the financial statements, and the forecasts indicate that the group can continue to meet such payments as they fall due. There have been no covenant breaches and the forecasts indicate that this will continue into the foreseeable future.

 

The group's banking facilities were formally reviewed and renewed in April 2023 and the directors are confident that these will be renewed by HSBC when they fall for renewal in April 2024.

 

The directors of the company have also received confirmation that the group will not recall payment of inter-company debt balances if it causes financial difficulty to any of the companies in the group.

 

Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

 

PREMIER FOREST GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 6 -
Energy and carbon report

The company has taken exemption of the energy and carbon report as this is included with the group consolidation financial statements.

 

Financial risk management policies and objectives

 

The company’s and group's principal financial instruments comprise bank overdrafts, bank loans, trade creditors, trade debtors, forward contracts and invoice discounting facilities. The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations.

Due to the nature of the financial instruments used by the group, there is limited exposure to price risk. The group’s approach to managing other risks applicable to the financial instruments concerned is shown below. The group enters into forward contracts to hedge against foreign currency fluctuations (though the company does not itself utilise such instruments).

In respect of bank overdrafts, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts and factoring facilities.

In respect of loans, these comprise loans from financial institutions. The interest rate on the loans is variable but the monthly repayments are fixed. The group manages the liquidity risk by ensuring there are sufficient funds to meet the payments.

Trade debtors are managed in respect of credit and cash flow risk by managing advances from the factor. Customer balances are regularly monitored by reference to amounts outstanding for time and credit limits.

Trade creditor liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

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.

 

Auditor

 

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.

On behalf of the board
T E A Edgell
Director
20 December 2023
PREMIER FOREST GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2023
- 7 -

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.

PREMIER FOREST GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PREMIER FOREST GROUP LIMITED
- 8 -
Opinion

We have audited the financial statements of Premier Forest Group Limited (the 'company') for the year ended 30 April 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:

PREMIER FOREST GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PREMIER FOREST GROUP LIMITED
- 9 -
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.

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.

PREMIER FOREST GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PREMIER FOREST GROUP LIMITED
- 10 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

 

 

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.

Paul Bowden
Senior Statutory Auditor
For and on behalf of Azets Audit Services
22 December 2023
Chartered Accountants
Statutory Auditor
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
PREMIER FOREST GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023
- 11 -
2023
2022
Notes
£
£
Administrative expenses
-
0
(443,600)
Exceptional item
3
155,567
-
0
Operating profit/(loss)
155,567
(443,600)
Interest receivable and similar income
6
2,055,000
6,400,000
Amounts written off investments
7
(155,567)
-
Profit before taxation
2,055,000
5,956,400
Tax on profit
8
(30,933)
-
0
Profit for the financial year
2,024,067
5,956,400

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

PREMIER FOREST GROUP LIMITED
BALANCE SHEET
AS AT
30 APRIL 2023
30 April 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
10
349,998
505,565
Current assets
Debtors
12
716,474
747,407
Creditors: amounts falling due within one year
13
(644,080)
(799,647)
Net current assets/(liabilities)
72,394
(52,240)
Net assets
422,392
453,325
Capital and reserves
Called up share capital
16
349,998
349,998
Profit and loss reserves
72,394
103,327
Total equity
422,392
453,325
The financial statements were approved by the board of directors and authorised for issue on 20 December 2023 and are signed on its behalf by:
T E A Edgell
Director
Company Registration No. 06328322
PREMIER FOREST GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2021
349,998
346,927
696,925
Year ended 30 April 2022:
Profit and total comprehensive income for the year
-
5,956,400
5,956,400
Dividends
9
-
(6,200,000)
(6,200,000)
Balance at 30 April 2022
349,998
103,327
453,325
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
2,024,067
2,024,067
Dividends
9
-
(2,055,000)
(2,055,000)
Balance at 30 April 2023
349,998
72,394
422,392
PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
- 14 -
1
Accounting policies
Company information

Premier Forest Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Premier Forest Products West Way Road, Alexandra Dock, Newport, United Kingdom, NP20 2PQ.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

Premier Forest Group Limited is a wholly owned subsidiary of Premier Forest UK Group Holdings Limited and the results of Premier Forest Group Limited are included in the consolidated financial statements of Premier Forest UK Group Holdings Limited which are available from West Way Road, Alexandra Dock, Newport, United Kingdom, NP20 2PQ.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 15 -
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.

 

The company is part of a group headed by Premier Forest UK Group Holdings Limited. In preparing the financial statements, the directors have considered the current financial position of the company and group and the likely future cash flows. At the date of signing the financial statements, the directors have concluded that it is appropriate to prepare them on a going concern basis. In forming this conclusion, the directors have considered the group's strong financial performance in the current financial year and prospects for the subsequent financial periods. The directors have reviewed projected cash flows and have considered different market scenarios within this based on sensitivities if market demand changes. The group's costs and working capital requirements are managed rigorously. The group’s trading activities are forecast to generate positive future cash flows for at least 12 months from the date the financial statements are signed, thus enabling the group to meet its obligations as they fall due.

 

The group has an import line facility and an invoice finance facility to assist with the financing of the business together with a fixed term loan. The group has met all capital and interest payments as they have fallen due in respect of financing arrangements, up to the date of approving the financial statements, and the forecasts indicate that the group can continue to meet such payments as they fall due. There have been no covenant breaches and the forecasts indicate that this will continue into the foreseeable future.

 

The group's banking facilities were formally reviewed and renewed in April 2023 and the directors are confident that these will be renewed by HSBC when they fall for renewal in April 2024.

 

The directors of the company have also received confirmation that the group will not recall payment of inter-company debt balances if it causes financial difficulty to any of the companies in the group.

 

Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

1.3
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.

1.4
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.

PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 16 -
1.5
Financial instruments

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

 

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

 

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

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities

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

 

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

 

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

Other financial liabilities

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

 

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

Derecognition of financial liabilities

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

1.6
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.

1.7
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.

PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 18 -
Deferred tax

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

 

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

1.8
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.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

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

Impairment of investments

The company considers whether investments are impaired. This requires consideration of the financial position and financial performance of the subsidiary companies and the estimation of future revenues and future cash flows from the companies as well as the selection of appropriate discount rates in order to calculate the net present value of the cash flows.

3
Exceptional item
2023
2022
£
£
Expenditure
Intercompany loan written off
(155,567)
-
PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
3
Exceptional item
(Continued)
- 19 -

During the year ended 30 April 2023, Premier Forest Estates Limited, a subsidiary company, was dissolved and as such the liability owed to the subsidiary by the company was discharged and written off.

4
Auditor's remuneration

The company's audit fee of £3,500 (2022: £3,500) was borne by Premier Forest Products Limited and not recharged.

5
Employees

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

2023
2022
Number
Number
Directors
4
4

No remuneration was paid to the directors for their services to the company.

6
Interest receivable and similar income
2023
2022
£
£
Income from fixed asset investments
Income from shares in group undertakings
2,055,000
6,400,000
7
Amounts written off investments
2023
2022
£
£
Amounts written off financial assets held at cost
(155,567)
-
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
30,933
-
0
PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
8
Taxation
(Continued)
- 20 -

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

2023
2022
£
£
Profit before taxation
2,055,000
5,956,400
Expected tax charge based on the standard rate of corporation tax in the UK of 19.49% (2022: 19.00%)
400,584
1,131,716
Tax effect of expenses that are not deductible in determining taxable profit
-
0
84,284
Tax effect of income not taxable in determining taxable profit
(400,584)
(1,216,000)
Adjustments in respect of prior years
22,117
-
0
Effect of change in corporation tax rate
(230)
-
0
Losses
9,046
-
0
Taxation charge for the year
30,933
-
9
Dividends
2023
2022
£
£
Interim paid
2,055,000
6,200,000
10
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
11
349,998
505,565
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 May 2022
505,565
Amounts written off investments
(155,567)
At 30 April 2023
349,998
Carrying amount
At 30 April 2023
349,998
At 30 April 2022
505,565
PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 21 -
11
Subsidiaries

Details of the company's subsidiaries at 30 April 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Premier Forest Products Limited
United Kingdom
Timber merchant
Ordinary Shares
100.00
-
Monmouthshire Timber Supplies Limited
United Kingdom
Dormant
Ordinary
-
100.00
Decor Panel Limited
United Kingdom
Specialist distributors and converters of wood based products
Ordinary
-
100.00

The registered office of all subsidiaries is West Way Road, Alexandra Dock, Newport, NP20 2PQ.

 

On 27 December 2022 Premier Forest Estates Limited, a dormant subsidiary, was dissolved. The related investment values were written off upon dissolution.

 

The directors believe that the carrying values of the remaining investments as at 30 April 2023 are supported by their underlying net assets at the end of the period.

12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
707,918
707,918
Prepayments and accrued income
8,556
8,556
716,474
716,474
Deferred tax asset (note 15)
-
0
30,933
716,474
747,407

Amounts due from group undertakings are unsecured, interest-free, have no fixed date of repayment and are repayable on demand.

 

13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
444,080
444,080
Amounts owed to group undertakings
200,000
355,567
644,080
799,647

Amounts due to group undertakings are unsecured, interest-free, have no fixed date of repayment and are repayable on demand

PREMIER FOREST GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 22 -
14
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
444,080
444,080
Payable within one year
444,080
444,080

The overdraft is secured by fixed and floating charges over the assets of the company.

15
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
£
£
Tax losses
-
30,933
2023
Movements in the year:
£
Asset at 1 May 2022
(30,933)
Charge to profit or loss
30,933
Liability at 30 April 2023
-

 

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Voting ordinary shares of £1 each
349,998
349,998
349,998
349,998

No shares have been issued which are not fully paid.

17
Ultimate controlling party

Premier Forest UK Group Holdings Limited is the immediate parent company and ultimate parent company as at 30 April 2023. Copies of the financial statements of Premier Forest UK Group Holdings Limited can be obtained from the company's registered office of West Way Road, Alexandra Dock, Newport, NP20 2PQ.

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