Company registration number 08965985 (England and Wales)
JPO COMMUNICATIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
JPO COMMUNICATIONS LIMITED
COMPANY INFORMATION
Directors
Mr S J Neal
Mrs C E Neal
Company number
08965985
Registered office
7 Pier Road
Feltham
London
United Kingdom
TW14 0TW
Auditor
AEL Markhams Ltd
2nd Floor
201 Haverstock Hill
Belsize Park
London
United Kingdom
NW3 4QG
Bankers
National Westminster Bank Plc
Chatham Customer Service Centre
Western Avenue
Waterside
Chatham Marine
Kent
ME4 4RT
JPO COMMUNICATIONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Company statement of cash flows
16
Notes to the financial statements
17 - 37
JPO COMMUNICATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The directors present the strategic report and financial statements for the year ended 31 October 2023.

Review of the business

Background

JPO Communications Ltd ('JPO') was formed in March 2014. In July 2014 JPO acquired 100% of the issued share capital of Geoff Neal Litho Ltd ('GNL') a litho printing and direct mail company. This is the only investment held by JPO and is the source of all JPO's income in the form of rent for the land and buildings occupied by GNL and dividends.

 

Review of subsidiary

The company's turnover fell by almost 10% from £11,979,754 in 2022 to £10,841,447 in 2023. Demand remains subdued due to ongoing adverse economic conditions. The net profit before tax was £15,703, down from £687,612 in 2022. The profit in 2022 included an exceptional book profit on the sale of a Heidelberg printing press. The gross profit margin improved to 31.1% from 28.2% in 2022. Cash balances dropped during the year from £767,590 to £427,234. The CBILS loan was repaid in the year.

Principal risks and uncertainties

The print industry is an extremely competitive and challenging environment with constant downward pressure on profit margins. The company continues to adapt as best it can to the current market demands and requirements. Customer demand remains weak due to ongoing economic uncertainty and various adverse economic conditions such as high interest rates and inflation. Despite the various challenges the company holds good financial reserves and retains a strong customer base. The director remains confident the market will improve. The business is well placed to respond to an uplift in customer demand.

Development and performance

The results for the period are considered satisfactory as is the financial position at the year end.

Key performance indicators

The directors assess the performance of the business using a variety of key performance indicators, including the measurement of turnover and profit and liquid funds.

 

The consolidated group accounts of JPO Communications Ltd for the year ending 31 October 2023 delivered the following for the year:

 

Profit after taxation £128,687 profit (2022: £700,230 profit).

At the year end date, the balance sheet net asset value was £3,819,678 (2022: £4,206,126).

 

In the financial statements of Geoff Neal Litho Ltd for the year ending 31 October 2023 the company delivered the following for the year:

 

Turnover £10,841,447 (2022: £11,979,754).

Gross profit % of 31.10% (2022: 28.27%).

Profit before taxation £15,703 (2022 : £687,612).

Cash balance of £427,234 (2022: £767,590) and bank loan finance of £nil (2022: £385,495).

Other information and explanations

The directors are fully aware of their social and corporate responsibilities, particularly with regard to environmental issues and are continually striving to reduce the carbon footprint of the business. The subsidiary company has been accredited with ISO 9001, ISO 14001 and ISO 27001 standards.

JPO COMMUNICATIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

On behalf of the board

Mr S J Neal
Director
30 July 2024
JPO COMMUNICATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -

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

Principal activities

The principal activity of the group continued to be that of litho printing and direct mail.

 

Results and dividends

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

Interim dividends of £515,135 (2022 - £337,710) were paid in aggregate by the parent company during the year as follows:

 

Ordinary 'A' £1 shares £423,575 (2022 - £246,150)

Ordinary 'B' £1 shares £91,560 (2022 - £91,560)

Directors

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

Mr S J Neal
Mrs C E Neal
Financial instruments
Treasury operations and financial instruments

The group’s principal financial instruments include bank overdrafts and loans, the main purpose of which is to raise finance for the group’s operations. In addition, the group has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.

Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The group is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

Research and development

The subsidiary company did not carry out any research and development work in the current year. In previous years the company undertook various projects aimed at improving and increasing automation of the print process and also to create and enhance print product design solutions.

Post reporting date events

There have not been any events since the year end of such significance that require reference to in this report.

Future developments

The company shall continue to strive for greater productivity and efficiency while ensuring the business keeps up to date with all technological advances

Auditor

The auditor, AEL Markhams Ltd, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

JPO COMMUNICATIONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 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 auditor of the company 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 auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr S J Neal
Director
30 July 2024
JPO COMMUNICATIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

JPO COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JPO COMMUNICATIONS LIMITED
- 6 -
Opinion

We have audited the financial statements of JPO Communications Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.

Material uncertainty relating to going concern

We draw attention to the going concern note in the Accounting Policies section of the financial statements, which outlines the directors' assessment of the situation and the steps the directors are taking to mitigate the risks. These conditions indicate that a material uncertainty exists that may cast doubt on the company's ability to continue as a 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. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our opinion is not modified in respect of this matter.

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:

JPO COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF JPO COMMUNICATIONS LIMITED
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

We identified the following areas as those most likely to have a material impact on the financial statements: health and safety; employment law; environmental policies and compliance with the UK Companies Act 2006 and the Financial Reporting Standard FRS102.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations was as follows:

 

- Enquiry of management about any known or suspected instances of non-compliance with laws and regulations, accidents in the workplace and fraud;

- Questioning judgements and assumptions made by management in their significant accounting estimates, in particular depreciation calculations;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

 

There are inherent limitations in the audit procedures described above. The more removed the laws and regulations are from the financial transactions, the less likely it is that we would become aware of non-compliance. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

JPO COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF JPO COMMUNICATIONS LIMITED
- 8 -

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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

Mr Marc Jason (Senior Statutory Auditor)
For and on behalf of AEL Markhams Ltd
30 July 2024
Chartered Accountants
Statutory Auditor
2nd Floor
201 Haverstock Hill
Belsize Park
London
United Kingdom
NW3 4QG
JPO COMMUNICATIONS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
10,841,447
11,979,754
Cost of sales
(7,469,697)
(8,593,170)
Gross profit
3,371,750
3,386,584
Distribution costs
(148,487)
(153,106)
Administrative expenses
(2,939,372)
(2,224,402)
Operating profit
4
283,891
1,009,076
Interest receivable and similar income
6
4,938
817
Interest payable and similar expenses
7
(113,543)
(123,289)
Profit before taxation
175,286
886,604
Tax on profit
8
(46,599)
(186,374)
Profit for the financial year
25
128,687
700,230
Profit for the financial year is all attributable to the owners of the parent company.

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

JPO COMMUNICATIONS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
2023
2022
£
£
Profit for the year
128,687
700,230
Other comprehensive income
Tax relating to other comprehensive income
-
0
(144,000)
Total comprehensive income for the year
128,687
556,230
Total comprehensive income for the year is all attributable to the owners of the parent company.
JPO COMMUNICATIONS LIMITED
GROUP BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,859,669
6,102,257
Current assets
Stocks
15
267,288
328,308
Debtors
16
1,947,324
2,581,361
Cash at bank and in hand
456,043
797,302
2,670,655
3,706,971
Creditors: amounts falling due within one year
17
(2,715,251)
(4,424,768)
Net current liabilities
(44,596)
(717,797)
Total assets less current liabilities
5,815,073
5,384,460
Creditors: amounts falling due after more than one year
18
(1,159,349)
(281,641)
Provisions for liabilities
Deferred tax liability
21
836,046
896,693
(836,046)
(896,693)
Net assets
3,819,678
4,206,126
Capital and reserves
Called up share capital
23
100
100
Revaluation reserve
24
1,800,000
1,800,000
Profit and loss reserves
25
2,019,578
2,406,026
Total equity
3,819,678
4,206,126

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

The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
30 July 2024
Mr S J Neal
Director
Company registration number 08965985 (England and Wales)
JPO COMMUNICATIONS LIMITED
COMPANY BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
12
5,000,000
5,000,000
Investments
13
1,147,356
1,147,356
6,147,356
6,147,356
Current assets
Debtors
16
100
100
Cash at bank and in hand
28,809
29,712
28,909
29,812
Creditors: amounts falling due within one year
17
(1,351,218)
(2,361,621)
Net current liabilities
(1,322,309)
(2,331,809)
Total assets less current liabilities
4,825,047
3,815,547
Creditors: amounts falling due after more than one year
18
(1,125,552)
-
Provisions for liabilities
Deferred tax liability
21
621,129
621,129
(621,129)
(621,129)
Net assets
3,078,366
3,194,418
Capital and reserves
Called up share capital
23
100
100
Profit and loss reserves
25
3,078,266
3,194,318
Total equity
3,078,366
3,194,418

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £399,083 (2022 - £282,375 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
30 July 2024
Mr S J Neal
Director
Company registration number 08965985 (England and Wales)
JPO COMMUNICATIONS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 November 2021
100
1,944,000
2,043,506
3,987,606
Year ended 31 October 2022:
Profit for the year
-
-
700,230
700,230
Other comprehensive income:
Tax relating to other comprehensive income
-
(144,000)
-
0
(144,000)
Total comprehensive income
-
(144,000)
700,230
556,230
Dividends
9
-
-
(337,710)
(337,710)
Balance at 31 October 2022
100
1,800,000
2,406,026
4,206,126
Year ended 31 October 2023:
Profit and total comprehensive income
-
-
128,687
128,687
Dividends
9
-
-
(515,135)
(515,135)
Balance at 31 October 2023
100
1,800,000
2,019,578
3,819,678
JPO COMMUNICATIONS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 14 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2021
100
3,249,653
3,249,753
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
282,375
282,375
Dividends
9
-
(337,710)
(337,710)
Balance at 31 October 2022
100
3,194,318
3,194,418
Year ended 31 October 2023:
Profit and total comprehensive income
-
399,083
399,083
Dividends
9
-
(515,135)
(515,135)
Balance at 31 October 2023
100
3,078,266
3,078,366
JPO COMMUNICATIONS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
523,318
433,497
Interest paid
(113,543)
(123,289)
Income taxes (paid)/refunded
(12,506)
140,116
Net cash inflow from operating activities
397,269
450,324
Investing activities
Purchase of tangible fixed assets
(59,529)
(7,473)
Proceeds from disposal of tangible fixed assets
-
873,583
Interest received
4,938
817
Net cash (used in)/generated from investing activities
(54,591)
866,927
Financing activities
Repayment of bank loans
90,054
(283,616)
Payment of finance leases obligations
(258,856)
(287,455)
Dividends paid to equity shareholders
(515,135)
(337,710)
Net cash used in financing activities
(683,937)
(908,781)
Net (decrease)/increase in cash and cash equivalents
(341,259)
408,470
Cash and cash equivalents at beginning of year
797,302
388,832
Cash and cash equivalents at end of year
456,043
797,302
JPO COMMUNICATIONS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
30
(175,193)
259,015
Interest paid
(49,053)
(31,414)
Income taxes paid
(12,506)
-
0
Net cash (outflow)/inflow from operating activities
(236,752)
227,601
Investing activities
Interest received
-
0
5
Dividends received
275,435
244,960
Net cash generated from investing activities
275,435
244,965
Financing activities
Repayment of bank loans
475,549
(105,843)
Dividends paid to equity shareholders
(515,135)
(337,710)
Net cash used in financing activities
(39,586)
(443,553)
Net (decrease)/increase in cash and cash equivalents
(903)
29,013
Cash and cash equivalents at beginning of year
29,712
699
Cash and cash equivalents at end of year
28,809
29,712
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 17 -
1
Accounting policies
Company information

JPO Communications Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 7 Pier Road, Feltham, Middlesex, United Kingdom, TW14 0TW.

 

The group consists of JPO Communications Limited and its only subsidiary, Geoff Neal Litho Ltd.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company JPO Communications Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 October 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 18 -
1.4
Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the group's ability to continue as a going concern.

 

In May 2023, JPO re-financed the five year loan facility it had with Barclays Bank Plc, taking out a new 15 year loan with National Westminster Bank Plc. JPO is reliant on the rental and dividend income from its subsidiary company Geoff Neal Litho Ltd ('GNL') to meet its bank loan repayment commitments. The director of GNL has considered relevant information, including budgets and forecasts and the impact of subsequent events in making their assessment of going concern. Demand for print remains subdued due to various adverse economic conditions such as high inflation and high interest rates.

 

Although the forecasts take account of the matters above, the underlying trading assumptions used in forecasting are uncertain and could be subject to significant variation. The directors have therefore concluded that these circumstances give rise to a material uncertainty. However, based on their assessments and the current resources available, the directors continue to adopt the going concern basis in preparing the annual report and accounts of the Group.

1.5
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

 

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. This in effect is when the job has been completed and the goods have been dispatched and received by the customer. A sales invoice is raised and the revenue is recorded based on the contracted price at the time of the sale i.e. when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

 

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

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

Where the cost of acquisition of a business is less than the fair value of net assets acquired, this is negative goodwill. Negative goodwill is initially recognised as a liability and is subsequently written back to the Profit & Loss account over its expected life.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 19 -
1.7
Tangible fixed assets

With the exception of freehold property, property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment losses. Freehold property is stated in the balance sheet at revalued amounts, being the fair value on the date of revaluation less any subsequent depreciation and impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that with could be determined using fair values at the reporting end date.

 

If an asset’s carrying amount is increased as a result of a revaluation, the increase shall be recognised in other comprehensive income and accumulated in equity. However, the increase shall be recognised in profit and loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. The decrease of an asset’s carrying amount as a result of revaluation shall be recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity, in respect of that asset. If a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

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:

Land and buildings Freehold
Nil
Land and buildings Leasehold
Nil
Plant and machinery
10-25% Reducing balance / Straight line
Fixtures, fittings & equipment
10-25% Reducing balance / Straight line

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

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available. In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

1.9
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 20 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.10
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.

1.11
Cash and cash equivalents

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

1.12
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 21 -
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 group 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 group after deducting all of its liabilities.

Basic financial liabilities

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

 

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

 

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the group 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 group.

1.14
Taxation

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

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 22 -
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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

 

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

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

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

1.17
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 23 -
1.18
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

In the application of the group’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 most material accounting estimate in the financial statements is depreciation. When assessing the depreciation method and rate to apply, the directors estimate the useful life and residual value of the assets. The outcome of historic disposals of similar assets is a key source of information when making assumptions and judgements.

 

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

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Sales of goods
10,841,447
11,979,754
2023
2022
£
£
Other revenue
Interest income
4,938
817
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the group's auditor for the audit of the group's financial statements
6,000
6,000
Depreciation of owned tangible fixed assets
120,117
182,337
Depreciation of tangible fixed assets held under finance leases
182,000
(94,687)
Profit on disposal of tangible fixed assets
-
(704,913)
Operating lease charges
129,081
144,885
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 24 -
5
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Sales, production and administration
49
55
-
-
Directors
2
3
2
2
Total
51
58
2
2

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
2,073,523
2,276,079
-
0
-
0
Social security costs
227,255
261,842
-
-
Pension costs
56,496
60,762
-
0
-
0
2,357,274
2,598,683
-
0
-
0
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
4,938
812
Other interest income
-
5
Total income
4,938
817
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
4,938
812
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 25 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
95,894
83,302
Other interest on financial liabilities
4,307
5,281
100,201
88,583
Other finance costs:
Interest on finance leases and hire purchase contracts
13,342
34,706
Total finance costs
113,543
123,289
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
107,246
12,506
Deferred tax
Origination and reversal of timing differences
(60,647)
168,797
Other adjustments
-
0
5,071
Total deferred tax
(60,647)
173,868
Total tax charge
46,599
186,374

The main rate of corporation tax increased from 19% to 25% on 1 April 2023.

 

The deferred tax provision is calculated using a 25% corporation tax rates (2022 : 25%).

 

 

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
8
Taxation
(Continued)
- 26 -

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
175,286
886,604
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
43,822
168,455
Tax effect of expenses that are not deductible in determining taxable profit
14,809
8,882
Effect of change in corporation tax rate
(11,822)
215,207
Permanent capital allowances in excess of depreciation
(210)
-
0
Research and development tax credit
-
0
(62,169)
Deferred tax on land & buildings
-
0
(144,000)
Rounding
-
0
(1)
Taxation charge
46,599
186,374

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

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
-
144,000
9
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
515,135
337,710
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 November 2022 and 31 October 2023
(1,560,459)
Amortisation and impairment
At 1 November 2022 and 31 October 2023
(1,560,459)
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
10
Intangible fixed assets
(Continued)
- 27 -
Carrying amount
At 31 October 2023
-
0
At 31 October 2022
-
0
The company had no intangible fixed assets at 31 October 2023 or 31 October 2022.

When JPO Communications Ltd acquired the shares in Geoff Neal Litho Ltd in 2014 for £1,644,180 the fair value of the assets was calculated as £3,204,639 thus creating negative goodwill of £1,560,459. The directors chose to write this back over a five year period. The amortisation completed in the year end 31 October 2018.

11
Tangible fixed assets
Group
Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
£
Cost or valuation
At 1 November 2022
1,634,560
3,365,440
3,199,861
515,400
8,715,261
Additions
-
0
-
0
59,529
-
0
59,529
At 31 October 2023
1,634,560
3,365,440
3,259,390
515,400
8,774,790
Depreciation and impairment
At 1 November 2022
-
0
-
0
2,119,345
493,659
2,613,004
Depreciation charged in the year
-
0
-
0
290,144
11,973
302,117
At 31 October 2023
-
0
-
0
2,409,489
505,632
2,915,121
Carrying amount
At 31 October 2023
1,634,560
3,365,440
849,901
9,768
5,859,669
At 31 October 2022
1,634,560
3,365,440
1,080,516
21,741
6,102,257
The company had no tangible fixed assets at 31 October 2023 or 31 October 2022.

The carrying value of land and buildings comprises:

Group
Company
2023
2022
2023
2022
£
£
£
£
Freehold
1,634,560
1,634,560
-
0
-
0
Long leasehold
3,365,440
3,365,440
-
0
-
0
5,000,000
5,000,000
-
-
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
11
Tangible fixed assets
(Continued)
- 28 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and machinery
662,396
796,146
-
0
-
0

Land and buildings with a carrying value of £5,000,000 (2022 - £5,000,000) have legal charges registered on them in respect of the bank borrowings.

 

In May 2018 the company bought the land and buildings at 7 and 11 Pier Road from Geoff Neal Litho Ltd, the wholly owned subsidiary of JPO Communications Ltd for £2,600,000, split £1,750,000 and £850,000 respectively. The two properties were professionally valued in January 2022 for the purpose of sale at a combined value of £5,000,000. In order to attribute a value to each property an apportionment in the same ratio as 2018 has been applied to the long leasehold (7) and freehold (11) respectively.

 

In the financial statements of the Parent company the land and buildings are classified as Investment Properties but in the Consolidated financial statements of the Group they are classified as Tangible Fixed Assets as the buildings are occupied by the subsidiary company Geoff Neal Litho Ltd.

 

No depreciation is charged on the long leasehold building (7 Pier Road) or the freehold (Unit H, 11 Pier Road) on the grounds that the depreciation charge would be immaterial.

 

2023
2022
£
£
Group
Cost
2,600,000
2,600,000
12
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 November 2022 and 31 October 2023
-
5,000,000

In the financial statements of the Parent company the land and buildings assets are classified as Investment properties but in the Consolidated financial statements of the Group they are classified as Tangible Fixed Assets as the buildings are occupied by the subsidiary company Geoff Neal Litho Ltd.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
12
Investment property
(Continued)
- 29 -

The carrying value of land and buildings comprises:

Group
Company
2023
2022
2023
2022
£
£
£
£
Freehold
1,634,560
1,634,560
1,634,560
1,634,560
Long leasehold
3,365,440
3,365,440
3,365,440
3,365,440
5,000,000
5,000,000
5,000,000
5,000,000
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
1,147,356
1,147,356
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 November 2022 and 31 October 2023
1,147,356
Carrying amount
At 31 October 2023
1,147,356
At 31 October 2022
1,147,356
14
Subsidiaries

Details of the company's subsidiaries at 31 October 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Geoff Neal Litho Ltd
7 Pier Road, Middx. TW14 0TW
Ordinary shares
100.00
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 30 -
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
192,827
231,853
-
-
Work in progress
74,461
96,455
-
-
267,288
328,308
-
-
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,833,103
2,476,305
-
0
-
0
Other debtors
27,009
400
100
100
Prepayments and accrued income
87,212
104,656
-
0
-
0
1,947,324
2,581,361
100
100
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
19
45,469
844,144
45,469
695,472
Obligations under finance leases
20
41,010
307,106
-
0
-
0
Trade creditors
2,081,057
2,504,750
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
1,249,990
1,638,850
Corporation tax payable
107,246
12,506
35,935
12,506
Other taxation and social security
62,816
65,616
-
-
Other creditors
186,115
286,290
-
0
-
0
Accruals and deferred income
191,538
404,356
19,824
14,793
2,715,251
4,424,768
1,351,218
2,361,621

Finance leases and hire purchase contracts are secured on the specific assets financed. Included in other creditors above is £36,698 in respect of a finance arrangement for various items of Kodak and Nela equipment relating to the subsidiary company. The liability is secured on the assets concerned.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 31 -
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
1,125,552
236,823
1,125,552
-
0
Obligations under finance leases
20
33,797
26,557
-
0
-
0
Other creditors
-
0
18,261
-
0
-
0
1,159,349
281,641
1,125,552
-

Finance leases and hire purchase contracts are secured on the specific assets financed. Included in other creditors above is £nil (2022: £18,261) in respect of a finance arrangement for various items of Kodak and Nela equipment. The liability is secured on the assets concerned.

Amounts included above which fall due after five years are as follows:
Payable by instalments
(905,158)
-
(905,158)
-
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,171,021
1,080,967
1,171,021
695,472
Payable within one year
45,469
844,144
45,469
695,472
Payable after one year
1,125,552
236,823
1,125,552
-
0

The long-term loans in the parent company are secured by fixed charges over unit G, 7 Pier Road and Unit H, 11 Pier Road and a debenture over the assets of the subsidiary company. The CBILS long term loan in the subsidiary company was repaid during the year.

At the Balance Sheet date JPO Communications Ltd had two long term bank loans with NatWest Bank plc. The details are as follows:

 

 

Current

Loan balance Repayment date Interest rate Repayments

£ 992,782 2038 (15 year loan) 2.18% above Base Rate Monthly

 

 

£ 178,239 2038 (15 year loan) 3.10% above Base Rate Monthly

 

 

The loan facility from Barclays Bank was repaid in May 2023.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 32 -
20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
45,300
320,448
-
0
-
0
In two to five years
37,192
26,704
-
0
-
0
82,492
347,152
-
-
Less: future finance charges
(7,685)
(13,489)
-
0
-
0
74,807
333,663
-
0
-
0

Finance lease payments represent rentals payable by the company for certain items of plant and machinery or other fixed assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. At the balance sheet date the subsidiary company had two agreements in place. The average length of the agreements being 4.5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

21
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
214,917
275,564
Investment property (Parent) / Land & Buildings (Group)
621,129
621,129
836,046
896,693
Liabilities
Liabilities
2023
2022
Company
£
£
Investment property (Parent) / Land & Buildings (Group)
621,129
621,129
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 November 2022
896,693
621,129
Credit to profit or loss
(60,647)
-
Liability at 31 October 2023
836,046
621,129
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
21
Deferred taxation
(Continued)
- 33 -

The deferred tax liability set out above is expected to reverse by £65,140 in the next financial year and relates to accelerated capital allowances that are expected to mature within the same period.

In the financial statements of the Parent company the land and buildings assets are classified as Investment properties but in the Consolidated financial statements of the Group they are classified as Tangible Fixed Assets as the buildings are occupied by the subsidiary company Geoff Neal Litho Ltd. In the Parent company financial statements the fair value gain on the revaluation of the properties and the associated deferred tax is recognised in the Profit & Loss account. In the Group accounts the revaluation forms a revaluation reserve in the Balance Sheet which is then reduced by the associated deferred tax provision.

22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,496
60,762

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

23
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
50
50
50
50
Ordinary B shares of £1 each
50
50
50
50
100
100
100
100
24
Revaluation reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
1,800,000
1,944,000
-
0
-
0
Deferred tax on revaluation of tangible assets
-
(144,000)
-
-
At the end of the year
1,800,000
1,800,000
-
0
-
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 34 -
25
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
2,406,026
2,043,506
3,194,318
3,249,653
Profit for the year
128,687
700,230
399,083
282,375
Dividends
(515,135)
(337,710)
(515,135)
(337,710)
At the end of the year
2,019,578
2,406,026
3,078,266
3,194,318
Group
Company
2023
2022
2023
2022
£
£
£
£
Non-distributable profits included above
At the beginning of the year
-
-
1,800,000
1,944,000
Non distributable profits in the year
-
-
-
(144,000)
At the end of the year
-
-
1,800,000
1,800,000
Distributable profits
2,019,578
2,406,026
1,278,266
1,394,318

Non-Distributable reserves

 

The revaluation reserve of £1,800,000 is made up of the revaluation of £2,400,000 less the associated deferred tax provision of £600,000 specifically relating to the revalued amount. The revaluation reserve is a non-distributable reserve in the Group financial statements.

In the financial statements of the Parent company the revalued element of the Investment Property, net of the related deferred tax, is included in total Profit & Loss reserves on the Balance Sheet and the non-distributable amount of £1,800,000 disclosed in the supporting notes.

26
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
81,381
70,948
-
-
Between two and five years
92,218
84,848
-
-
173,599
155,796
-
-
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 35 -
27
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
23,199
39,815

The directors of both JPO Communications Ltd and Geoff Neal Litho Ltd are regarded as the key management personnel.

Transactions with related parties

The balances and trading transactions outlined below are all with the subsidiary company and are therefore part of the group. During the year the group entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Group
Entities with control, joint control or significant influence over the group
-
163,202
-
297,404
Services received
2023
2022
£
£
Group
Entities with control, joint control or significant influence over the company
36,216
44,233

The amounts shown above are inclusive of VAT where applicable.

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Entities with control, joint control or significant influence over the group
-
6,909

Standard trading terms and conditions apply to the above transactions and there is no security attaching to the outstanding balances.

The following amounts were outstanding at the reporting end date:

Standard trading terms and conditions apply to the above transactions and there is no security attaching to the outstanding balances.

JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 36 -
28
Directors' transactions

Dividends totalling £515,135 (2022 - £337,710) were paid in the year in respect of shares held by the company's directors.

 

Loans to/from directors

 

At the beginning of the year the director Mr. S. Neal owed £100 to JPO Communications Ltd. There were no transactions during the year, leaving a balance of £100 owing at the balance sheet date. This is an interest free loan repayable on demand.

 

29
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
128,687
700,230
Adjustments for:
Taxation charged
46,599
186,374
Finance costs
113,543
123,289
Investment income
(4,938)
(817)
Gain on disposal of tangible fixed assets
-
(704,913)
Depreciation and impairment of tangible fixed assets
302,117
87,650
Movements in working capital:
Decrease/(increase) in stocks
61,020
(29,702)
Decrease/(increase) in debtors
634,037
(443,634)
(Decrease)/increase in creditors
(757,747)
515,020
Cash generated from operations
523,318
433,497
30
Cash (absorbed by)/generated from operations - company
2023
2022
£
£
Profit for the year after tax
399,083
282,375
Adjustments for:
Taxation charged
35,935
161,577
Finance costs
49,053
31,414
Investment income
(275,435)
(244,965)
Movements in working capital:
Decrease in debtors
-
11,670
(Decrease)/increase in creditors
(383,829)
16,944
Cash (absorbed by)/generated from operations
(175,193)
259,015
JPO COMMUNICATIONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 37 -
31
Analysis of changes in net debt - group
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
797,302
(341,259)
456,043
Borrowings excluding overdrafts
(1,080,967)
(90,054)
(1,171,021)
Obligations under finance leases
(333,663)
258,856
(74,807)
(617,328)
(172,457)
(789,785)
32
Analysis of changes in net debt - company
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
29,712
(903)
28,809
Borrowings excluding overdrafts
(695,472)
(475,549)
(1,171,021)
(665,760)
(476,452)
(1,142,212)
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