Company registration number 00422132 (England and Wales)
HOBBS THE PRINTERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
HOBBS THE PRINTERS LIMITED
COMPANY INFORMATION
Directors
D A Hobbs
C D Hobbs
G N Bromley
Secretary
D A Hobbs
Company number
00422132
Registered office
Brunel Road
Totton
Hampshire
SO40 3WX
Auditor
Azets Audit Services
Secure House
Lulworth Close
Chandlers Ford
Southampton
Hampshire
SO53 3TL
HOBBS THE PRINTERS LIMITED
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
Notes to the financial statements
11 - 22
HOBBS THE PRINTERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -
The directors present their strategic report for the year ended 31 July 2023.
Principal activity
The company's principal activity is printing. There has not been any change in this in the year under review and the directors are not aware, at the date of this report, of any likely major change in the company’s activity in the current year.
Overall Strategy
The company's overall strategy is to maintain and grow a high quality printing business delivering high value to its customers, employees and shareholders. This is achieved by:
Delivering professional services to our customers.
Combining tradition and technology in order to achieve excellence.
Establishing close working relationships with both customers and suppliers.
Recruiting and training appropriate staff at all levels to enable them to fulfil their potential to the maximum and thus provide both job satisfaction and fair financial reward.
Fair review of the business
Sales for the year increased by £1,439,185 (12.8%) to £12,688,970 (£11,249,785 in 2021/22). The gross profit increased by £413,790 to £2,172,845 (£1,759,055 in 2021/22) and profit before tax increased to £370,612 (£339,120 in 2021/22).
The company invested a further £974,636 in new plant during the year, bringing the cost of the company's investment in capital equipment to £11,161,297. The directors believe that ultimately the company's policy of continued investment in new technology is essential for continuing success in the industry, but given the ongoing economic uncertainties brought about by the continuing pandemic and the war in Ukraine, they continue to monitor and amend capital expenditure programmes as necessary.
There were no significant events after the balance sheet date.
Principal risks
Due to the pandemic and the impact of the war in Ukraine the company closely monitors revenue streams and affected supply chains, with increased marketing and sales activities focussed on areas least affected, and endeavours to maximise operating efficiencies.
Market: Competition from key competitors and pressure on margins.
The company endeavours to ameliorate this risk by continuing to explore alternative markets, adding value to its services, providing fast response times and maintaining strong relationships with its customers.
IT Systems: Sufficiently rapid access to and accuracy of data; cyber security.
The company continues to attach great importance to its IT systems and their regular upgrading with direct participation at board level.
Reputation: Quality of products and services; information security.
The company places great emphasis on security awareness, particularly at mid and high management levels.
Credit and cash flow:
The company ensures that appropriate due diligence is carried out on new customers and maintains a strong emphasis on the management of good credit control overall.
Interest rates: Exposure to cash flow interest rate risk.
The company traditionally has ensured that it has no requirement for any significant borrowings and thus has no significant exposure to interest rate risk.
Liquidity: Exposure to inadequate cash flows.
The combined availability of bank balances and continued strong positive cash flows prevents any significant exposure to liquidity risk.
HOBBS THE PRINTERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -
Monitoring performance
The company monitors its performance using the following key performance indicators:
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Liquidity: current assets to current liabilities | | |
Return on capital employed | | |
Other information and explanations
Employee involvement
Details of the number of employees and related costs are shown in note 5 to the financial statements.
Environmental matters
Hobbs The Printers Limited recognises the importance of its environmental responsibilities, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by the company's activities. The company has accreditation under the Forestry Stewardship Council's Chain of Custody Standard and the Environmental Standard ISO 14001. Hobbs The Printers is a Carbon Balanced printer and has been awarded the Gold Medal for sustainability by Ecovadis, putting the company within the top 5% of the 100,000 plus companies assessed by Ecovadis globally.
Approved by the Board and signed on its behalf by:
D A Hobbs
Director
5 January 2024
HOBBS THE PRINTERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 July 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D A Hobbs
P M Hobbs
(Resigned 28 February 2023)
C D Hobbs
G N Bromley
Strategic report
In accordance with the Companies Act the Strategic Report on pages 1 to 2 provides a fair review of the company's business and description of the principal risks and uncertainties facing the company. It also contains information on the company's performance and strategy.
Results and dividends
A summary of the company's results for the year are set out in the review of the business section of the Strategic Report. Profit after tax was £254,968 (2022 - £165,392).
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
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 the forthcoming Annual General Meeting.
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s 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.
HOBBS THE PRINTERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 4 -
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.
Donations
During the year the company made charitable donations of £6,573 (2022 - £2,617). There were no political contributions.
Approved by the Board and signed on its behalf by:
D A Hobbs
C D Hobbs
Director
Director
5 January 2024
HOBBS THE PRINTERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HOBBS THE PRINTERS LIMITED
- 5 -
Opinion
We have audited the financial statements of Hobbs The Printers Limited (the 'company') for the year ended 31 July 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:
give a true and fair view of the state of the company's affairs as at 31 July 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HOBBS THE PRINTERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HOBBS THE PRINTERS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of our 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 and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
HOBBS THE PRINTERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HOBBS THE PRINTERS LIMITED
- 7 -
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:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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.
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.
Michael Wesley FCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
12 January 2024
Chartered Accountants
Statutory Auditor
Secure House
Lulworth Close
Chandlers Ford
Southampton
Hampshire
SO53 3TL
HOBBS THE PRINTERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
12,688,970
11,249,785
Cost of sales
(10,516,125)
(9,490,730)
Gross profit
2,172,845
1,759,055
Distribution costs
(217,832)
(210,433)
Administrative expenses
(1,607,406)
(1,246,547)
Other operating income
27,914
Operating profit
4
347,607
329,989
Interest receivable and similar income
7
23,005
9,131
Profit before taxation
370,612
339,120
Tax on profit
8
(115,644)
(173,728)
Profit for the financial year
254,968
165,392
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The company has no recognised gains or losses for the year other than the results above.
HOBBS THE PRINTERS LIMITED
BALANCE SHEET
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
7,400
Tangible assets
10
3,161,070
2,921,941
3,168,470
2,921,941
Current assets
Stocks
11
909,760
1,164,876
Debtors
12
4,148,839
3,625,304
Cash at bank and in hand
1,554,184
1,463,102
6,612,783
6,253,282
Creditors: amounts falling due within one year
13
(1,305,242)
(1,069,824)
Net current assets
5,307,541
5,183,458
Total assets less current liabilities
8,476,011
8,105,399
Provisions for liabilities
Deferred tax liability
14
566,382
450,738
(566,382)
(450,738)
Net assets
7,909,629
7,654,661
Capital and reserves
Called up share capital
16
40,000
40,000
Profit and loss reserves
7,869,629
7,614,661
Total equity
7,909,629
7,654,661
The financial statements were approved by the board of directors and authorised for issue on 5 January 2024 and are signed on its behalf by:
D A Hobbs
C D Hobbs
Director
Director
Company Registration No. 00422132
HOBBS THE PRINTERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 August 2021
40,000
7,449,269
7,489,269
Year ended 31 July 2022:
Profit and total comprehensive income for the year
-
165,392
165,392
Balance at 31 July 2022
40,000
7,614,661
7,654,661
Year ended 31 July 2023:
Profit and total comprehensive income for the year
-
254,968
254,968
Balance at 31 July 2023
40,000
7,869,629
7,909,629
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
1
Accounting policies
Company information
Hobbs The Printers Limited is a private company limited by shares and incorporated in England and Wales. The registered office is Brunel Road, Totton, Hampshire, SO40 3YS.
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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel and intra-group related party transactions.
The financial statements of the company are consolidated in the financial statements of H C Holdings (Southampton) Limited. These consolidated financial statements are available from its registered office: c/o Azets, Lulworth Close, Chandlers Ford, Hampshire, SO53 3TL.
1.2
Going concern
At the time of approving the financial statements, the directors confirmtrue 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 as 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.
The Company recognises revenue when goods are delivered and title has been transferred to the customer.
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
No amortisation expense is incurred on domain names. The directors consider that the market value of these assets are greater than cost and thus their amortisation is insignificant. Any permanent diminution in the value of the domain names is recognised in profit or loss as appropriate.
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.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
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 machinery
3 - 10 years straight line
Fixtures and fittings
7 years straight line
Motor vehicles
4 years straight line
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
1.7
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.
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.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 13 -
1.9
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.
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including trade and other creditors, are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 15 -
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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.
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
Judgements
In preparing these financial statements, the directors have made the following judgements:
Impairment of fixed assets
Determine whether there are any indications of impairment of the company's tangible fixed assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.
Work in progress
Determine the stage of completion of work in progress and assess the progress of each contract.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are detailed below:
Depreciation and residual values of fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and project disposal values.
Allowances for doubtful debts
The company maintains allowances for doubtful debts for estimated losses resulting from the subsequent inability of customers to make required payments. If the financial conditions of customers were to deteriorate, resulting in impairment of the ability to make payments, additional allowances may be required in future periods.
Provisions for obsolete and slow moving stocks
The company maintains allowances for stock which is not expected to be, or is deemed difficult, to be utilised.
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 17 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods and services
12,688,970
11,249,785
All turnover has been generated within the United Kingdom.
2023
2022
£
£
Other revenue
Interest income
23,005
9,131
Grants received
-
27,914
The government grants received during the prior year were in respect of the United Kingdom government Job Retention Scheme.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(45,441)
(37,983)
Government grants
-
(27,914)
Fees payable to the company's auditor for the audit of the company's financial statements
12,100
9,670
Depreciation of owned tangible fixed assets
693,153
762,888
Loss on disposal of tangible fixed assets
13,354
5,903
5
Employees
The average monthly number of persons (including directors) employed by the company during the year, analysed by category was as follows:
2023
2022
Number
Number
Production
105
99
Administration and support
17
18
Directors
4
4
Total
126
121
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,687,044
3,467,741
Social security costs
328,867
329,449
Pension costs
247,888
204,089
4,263,799
4,001,279
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
193,691
166,132
Company pension contributions to defined contribution schemes
26,626
4,225
220,317
170,357
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
22,114
9,131
Other interest income
891
Total income
23,005
9,131
8
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(1,972)
UK corporation tax recoverable
(150,000)
Total current tax
(151,972)
Deferred tax
Origination and reversal of timing differences
115,644
155,000
Total deferred tax
115,644
155,000
Total tax charge
115,644
173,728
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
8
Taxation
(Continued)
- 19 -
The charge for the year can be reconciled based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
370,612
339,120
Expected tax charge based on the standard rate of corporation tax in the UK of 21.00% (2022: 19.00%)
77,829
64,433
Tax effect of expenses that are not deductible in determining taxable profit
1,965
1,487
Adjustments in respect of prior years
(34)
Group relief
49,311
Deferred tax expense/(credit)
33,738
Tax increase/(decrease) from effect of capital allowances and depreciation
(35,836)
74,104
Deferred tax at different tax rate
22,375
Taxation charge for the year
115,644
173,728
9
Intangible fixed assets
Domain name
£
Cost
At 1 August 2022
Additions
7,400
At 31 July 2023
7,400
Amortisation and impairment
At 1 August 2022 and 31 July 2023
Carrying amount
At 31 July 2023
7,400
At 31 July 2022
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 20 -
10
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 August 2022
9,611,439
691,484
40,383
10,343,306
Additions
974,636
974,636
Disposals
(156,645)
(156,645)
At 31 July 2023
10,429,430
691,484
40,383
11,161,297
Depreciation and impairment
At 1 August 2022
6,905,002
502,864
13,499
7,421,365
Depreciation charged in the year
631,118
53,863
8,172
693,153
Eliminated in respect of disposals
(114,291)
(114,291)
At 31 July 2023
7,421,829
556,727
21,671
8,000,227
Carrying amount
At 31 July 2023
3,007,601
134,757
18,712
3,161,070
At 31 July 2022
2,706,437
188,620
26,884
2,921,941
11
Stocks
2023
2022
£
£
Raw materials and consumables
560,202
800,911
Work in progress
349,558
363,965
909,760
1,164,876
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,511,645
1,717,910
Corporation tax recoverable
10,010
Amounts owed by group undertakings
2,115,182
1,303,406
Other debtors
151,698
295,582
Prepayments and accrued income
370,314
298,396
4,148,839
3,625,304
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 21 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
945,232
729,860
Taxation and social security
77,349
74,369
Other creditors
4,909
4,793
Accruals and deferred income
277,752
260,802
1,305,242
1,069,824
14
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
567,489
451,785
Retirement benefit obligations
(1,107)
(1,047)
566,382
450,738
2023
Movements in the year:
£
Liability at 1 August 2022
450,738
Charge to profit or loss
115,644
Liability at 31 July 2023
566,382
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
247,888
204,089
The company operates a number of defined contribution pension schemes for all qualifying employees. The assets of the schemes are held separately from those of the company in independently administered funds.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
40,000
40,000
40,000
40,000
HOBBS THE PRINTERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 22 -
17
Financial commitments, guarantees and contingent liabilities
H C Holdings (Southampton) Limited and Hobbs The Printers Limited have a group registration for Value Added Tax. The company therefore has a contingent liability in respect of amounts due to H M Revenue & Customs by its parent company. As at the balance sheet date, the amount due in respect of the contingent liability was £nil (2022 - £nil).
18
Capital commitments
At the year end, the company had a capital commitment to purchase plant and machinery for £6,710 (2022 - £720,000). Included within other debtors is £3,355 (2022 - £144,000) in respect of this capital commitment.
19
Ultimate controlling party
The company's immediate and ultimate parent is H C Holdings (Southampton) Limited, incorporated in England and Wales. The parent company financial statements are available upon request from the company's registered office: c/o Azets, Lulworth Close, Chandlers Ford, Hampshire, SO53 3TL.
The ultimate controlling party is D A Hobbs.
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