Company registration number 06186008 (England and Wales)
FOCUS GROUP LOGISTICS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
FOCUS GROUP LOGISTICS LTD
COMPANY INFORMATION
Directors
J E Copperwait
L Copperwait
M M Sear
Company number
06186008
Registered office
Gable House
40 High Street
Rickmansworth
Hertfordshire
WD3 1EH
Auditor
Mercer & Hole LLP
Trinity Court
Church Street
Rickmansworth
WD3 1RT
Business address
Gable House
40 High Street
Rickmansworth
Hertfordshire
WD3 1EH
FOCUS GROUP LOGISTICS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
FOCUS GROUP LOGISTICS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -
The directors present the strategic report for the year ended 31 October 2023.
Fair review of the business
The principal activity of the company is to undertake construction logistics, waste management and associated services packages on major construction projects in the United Kingdom.
Focus Group Logistics has seen a year of positivity with turnover holding firm, the construction industry has continued to see a challenging environment due to pressure on new build residential sales, increased costs of borrowing, the building safety act, second staircase regulation and the impending general election in 2024 all putting huge pressure on the construction industry leading to further delays in project starts. Profits have maintained at previous levels.
The pipeline remains positive; 2024 sales and income is looking to be improved with some growth but a stable future outlook. We are seeing a steady growth in residential properties for the private rental sector, social housing, and a resurgence in the large London office construction market.
We are expecting 2024 and 2025 to still be challenging but are confident that with a diversified portfolio of work, whilst new build large scale residential projects are waiting to re-commence, such as central City of London commercial offices and student accommodation as well as Hotel projects.
The financial statements set out the performance and position of the Company for the year ended 31 October 2023 and are shown on pages 8 to 24.
Principal risks and uncertainties
The Board has ultimate responsibility for risk management. This responsibility encapsulates an understanding of the key risks, recognition, and oversight of the measures in place to manage risk and the acceptance of individual risks. Any areas where the Board is uncomfortable with the risk exposure are investigated further, to ensure that either additional controls are implemented to reduce the risk to an acceptable level, or if not possible, that the activities giving rise to the risk curtailed.
The principal risks faced by the Company are as follows:
Safety: implementing effective health and safety management systems and working practices. Regulatory compliance: complying fully with applicable laws and regulations.
Customer reliance: dependence on the volatility of client expenditure in the construction and infrastructure sectors.
Supply chain: managing a logistically complex and diverse national supply chain.
Project and work package execution: completing contracts to the programme requirements Engaged commercial terms: forecasting accurately the financial out-turn of contracts.
People management: attracting and retaining skilled personnel.
Safety
The Company is committed to achieving the highest standard of health and safety and regularly review the policies and practices in place to ensure that appropriate standards are maintained.
Regulatory compliance
The Company is committed to full regulatory compliance. In the year ended 31 October 2022, the Company maintained regulatory compliance in all key areas.
FOCUS GROUP LOGISTICS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
Supply chain
The Company practises ethical and sustainable procurement in recognition that significant sustainability effects, both positive and negative, can arise from its supply chain activities. Procurement is undertaken within structured guidelines on the sustainability issues that should be considered during supplier selection and ongoing supplier management and engagement.
Engaged commercial terms
The Company engages in contracts with customers in order to agree terms and conditions and allow the accrued forecasting of the expected financial outturn.
Services contracted for future periods was in line with expectation at 31 October 2023.
People management
The Company is committed to recruiting and retaining the very best individuals in the labour market and providing a workplace which offers equal opportunity for promotion and advancement to all employees, regardless of gender, colour, ethnicity, religion, sexual orientation, and disability.
As part of the Company’s equal opportunities policy, procedures are in place that are designed to provide for full and fair consideration and selection of disabled applicants, to ensure that they are properly trained to perform safely and effectively and to provide career opportunities that allow them to fulfil their full potential. When an employee becomes disabled in the course of their employment, the Company will actively seek to retain them wherever possible by adjusting their work content and environment or by retraining them to undertake new roles.
Details of the number of employees in the Company are given in note 6.
Key performance indicators
The financial Key Performance Indicators are revenue of £14.7m (2022: £14.3m) and profit before tax of £241k (2022: £247k profit).
Additional KPIs on non-financial information include:
Safety: where indicators show how successful the Company has been in protecting its employees from harm. Regulatory compliance: where indicators measure compliance with applicable regulation.
Supply chain: where indicators measure the number of suppliers and payment performance.
Engaged commercial terms: where indicators measure the amount of work contracted for future periods; and People management where indicators measure the number of permanent staff.
J E Copperwait
Director
31 July 2024
FOCUS GROUP LOGISTICS LTD
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 company is to undertake construction and infrastructure packages relating to logistics, waste management and associated services and to operate specialist construction plants in the United Kingdom.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £5,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J E Copperwait
L Copperwait
M M Sear
Auditor
In accordance with the company's articles, a resolution proposing that Mercer & Hole LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
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
J E Copperwait
Director
31 July 2024
FOCUS GROUP LOGISTICS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
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.
FOCUS GROUP LOGISTICS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FOCUS GROUP LOGISTICS LTD
- 5 -
Opinion
We have audited the financial statements of Focus Group Logistics Ltd (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 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 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:
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.
FOCUS GROUP LOGISTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOCUS GROUP LOGISTICS LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates.
FOCUS GROUP LOGISTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOCUS GROUP LOGISTICS LTD
- 7 -
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Audit procedures performed by engagement team include:
Our responses to significant audit risks over management override of controls, which are intended to sufficiently address the risk of fraudulent manipulation. Specifically we review the manual adjustments made to the financial statements and evaluate the appropriateness of accounting policies used and the reasonableness if accounting estimates and related disclosures;
Discussions with management, including considerations of known or suspected instances of noncompliance with laws and regulations or the identification of fraud;
Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.; and
Evaluation of the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing noncompliance and cannot be expected to detect non-compliance with all laws and regulations.
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.
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.
Mark Cassidy FCA
Senior Statutory Auditor
For and on behalf of Mercer & Hole LLP
31 July 2024
Chartered Accountants
Statutory Auditor
Trinity Court
Church Street
Rickmansworth
WD3 1RT
FOCUS GROUP LOGISTICS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
14,695,132
14,276,357
Cost of sales
(11,635,689)
(11,317,355)
Gross profit
3,059,443
2,959,002
Administrative expenses
(2,810,831)
(2,628,366)
Other operating income
103,138
150,000
Operating profit
4
351,750
480,636
Interest receivable and similar income
8
212,247
1,811
Interest payable and similar expenses
9
(322,576)
(235,780)
Profit before taxation
241,421
246,667
Tax on profit
10
(96,735)
7,130
Profit for the financial year
144,686
253,797
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FOCUS GROUP LOGISTICS LTD
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
811,461
664,978
Current assets
Debtors
13
5,161,574
5,779,011
Cash at bank and in hand
338,845
320,859
5,500,419
6,099,870
Creditors: amounts falling due within one year
14
(4,347,675)
(4,356,783)
Net current assets
1,152,744
1,743,087
Total assets less current liabilities
1,964,205
2,408,065
Creditors: amounts falling due after more than one year
15
(1,053,296)
(1,672,413)
Provisions for liabilities
Deferred tax liability
18
173,443
137,872
(173,443)
(137,872)
Net assets
737,466
597,780
Capital and reserves
Called up share capital
20
10,100
10,100
Profit and loss reserves
727,366
587,680
Total equity
737,466
597,780
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 31 July 2024 and are signed on its behalf by:
J E Copperwait
Director
Company registration number 06186008 (England and Wales)
FOCUS GROUP LOGISTICS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2021
10,100
420,998
431,098
Year ended 31 October 2022:
Profit and total comprehensive income
-
253,797
253,797
Dividends
11
-
(87,115)
(87,115)
Balance at 31 October 2022
10,100
587,680
597,780
Year ended 31 October 2023:
Profit and total comprehensive income
-
144,686
144,686
Dividends
11
-
(5,000)
(5,000)
Balance at 31 October 2023
10,100
727,366
737,466
FOCUS GROUP LOGISTICS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,114,225
986,044
Interest paid
(322,576)
(235,780)
Income taxes (paid)/refunded
(196,639)
15,231
Net cash inflow from operating activities
595,010
765,495
Investing activities
Purchase of tangible fixed assets
(67,230)
Provision of loans
(51,365)
267,949
Interest received
212,247
1,811
Net cash generated from investing activities
93,652
269,760
Financing activities
Repayment of bank loans
(344,484)
(316,175)
Payment of finance leases obligations
(319,204)
(495,108)
Dividends paid
(5,000)
(87,115)
Net cash used in financing activities
(668,688)
(898,398)
Net increase in cash and cash equivalents
19,974
136,857
Cash and cash equivalents at beginning of year
318,871
182,014
Cash and cash equivalents at end of year
338,845
318,871
Relating to:
Cash at bank and in hand
338,845
320,859
Bank overdrafts included in creditors payable within one year
(1,988)
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
1
Accounting policies
Company information
Focus Group Logistics Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Gable House, 40 High Street, Rickmansworth, Hertfordshire, WD3 1EH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for the provision of logistics and waste management services provided in the normal course of business, and is shown net of value added tax and other sales related taxes. The fair value of consideration takes into account trade discounts and settlement discounts.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
over lease term
Plant and equipment
20% on cost
Fixtures and fittings
20%/33.3% on cost
Motor vehicles
20%/25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
1.6
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans, 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.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -
1.8
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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 are as follows.
Accrued income
Accrued revenue and costs are recognised when the outcome of a contract can be reliably estimated. The percentage of completion method is used to value revenue and costs at the year end, these are included in the profit or loss account. At the year end, the company reviews the recoverability of amounts already recognised as contract revenue. If, on the review of market conditions and conversation with the client, the debtor is not considered recoverable, the undeliverable amount will be expenses in the year.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Logistics
14,695,132
14,276,357
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
14,695,132
14,276,357
2023
2022
£
£
Other revenue
Interest income
212,247
1,811
Management income
103,138
150,000
100% of the revenue relates to the provision of services and arises in the United Kingdom.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation on tangible fixed assets
291,879
271,330
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 17 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
22,500
14,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
31
51
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,861,387
2,121,634
Social security costs
137,847
161,787
Pension costs
38,262
41,726
2,037,496
2,325,147
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
553,011
370,964
Company pension contributions to defined contribution schemes
11,317
13,232
564,328
384,196
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
254,668
136,384
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
212,247
1,811
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
127,080
99,756
Other finance costs:
Interest on finance leases and hire purchase contracts
41,233
58,936
Other interest
154,263
77,088
322,576
235,780
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
61,164
14,716
Adjustments in respect of prior periods
(67,156)
Total current tax
61,164
(52,440)
Deferred tax
Origination and reversal of timing differences
35,571
35,869
Previously unrecognised tax loss, tax credit or timing difference
9,441
Total deferred tax
35,571
45,310
Total tax charge/(credit)
96,735
(7,130)
The actual charge/(credit) 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
241,421
246,667
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
54,363
46,867
Tax effect of expenses that are not deductible in determining taxable profit
48,586
18,482
Under/(over) provided in prior years
(67,156)
Deferred tax adjustments in respect of prior years
9,441
In respect of capital allowances
(9,746)
(23,372)
Remeasurement of deferred tax for changes in tax rates
3,532
8,608
Taxation charge/(credit) for the year
96,735
(7,130)
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
11
Dividends
2023
2022
£
£
Interim paid
5,000
87,115
12
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 November 2022
142,855
843,902
378,006
128,987
1,493,750
Additions
371,132
67,230
438,362
At 31 October 2023
142,855
1,215,034
445,236
128,987
1,932,112
Depreciation and impairment
At 1 November 2022
123,656
325,271
311,898
67,947
828,772
Depreciation charged in the year
19,199
207,358
47,276
18,046
291,879
At 31 October 2023
142,855
532,629
359,174
85,993
1,120,651
Carrying amount
At 31 October 2023
682,405
86,062
42,994
811,461
At 31 October 2022
19,199
518,631
66,108
61,040
664,978
The net book value of tangible fixed assets includes £670,148 (2022 - £506,164) in respect of assets held under finance leases or hire purchase contracts. The depreciation charge in respect of such assets amounted to £207,149 (2022 - £131,210) for the period.
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,045,654
2,294,460
Other debtors
2,966,330
3,240,196
Prepayments and accrued income
149,590
244,355
5,161,574
5,779,011
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
492,493
263,882
Obligations under finance leases
17
378,561
282,599
Trade creditors
1,898,671
1,723,590
Corporation tax
11,677
147,152
Other taxation and social security
514,983
978,954
Other creditors
966,679
892,391
Accruals and deferred income
84,611
68,215
4,347,675
4,356,783
A charge was created and registered on 5 February 2020 in favour of Ultimate Finance Limited with regards to a debt of £654,085 (2022 - £640,429).
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
671,572
1,246,655
Obligations under finance leases
17
381,724
425,758
1,053,296
1,672,413
A charge was created and registered on 11 May 2020 in favour of National Westminster Bank Plc with regards to a debt outstanding of £522,500 (2022 - £712,500).
16
Loans and overdrafts
2023
2022
£
£
Bank loans
1,164,065
1,508,549
Bank overdrafts
1,988
1,164,065
1,510,537
Payable within one year
492,493
263,882
Payable after one year
671,572
1,246,655
The long-term loans are secured by fixed and floating charges over all the property and undertaking of the company.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
386,399
282,599
In two to five years
441,065
425,758
827,464
708,357
Less: future finance charges
(67,179)
760,285
708,357
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
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
173,443
137,872
2023
Movements in the year:
£
Liability at 1 November 2022
137,872
Charge to profit or loss
35,571
Liability at 31 October 2023
173,443
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
38,262
41,726
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'Ordinary' shares of £1 each
10,100
10,100
10,100
10,100
21
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
807,422
819,278
Between two and five years
3,052,101
3,085,940
In over five years
1,508,950
2,177,709
5,368,473
6,082,927
22
Related party transactions
The following amounts were outstanding at the reporting end date:
Included in other debtors are amounts due from related parties totalling £2,299,138 (2022: £2,863,909). These amounts are interest free and repayable on demand. The entities are related by virtue of the fact that they are under common control.
23
Directors' transactions
Dividends totalling £5,000 (2022 - £87,115) were paid in the year in respect of shares held by the company's directors.
Included in other debtors at the year end is an amount of £223,370 (2022: £165,016) due from the directors. This amount is interest free and repayable on demand.
FOCUS GROUP LOGISTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
24
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
144,686
253,797
Adjustments for:
Taxation charged/(credited)
96,735
(7,130)
Finance costs
322,576
235,780
Investment income
(212,247)
(1,811)
Depreciation and impairment of tangible fixed assets
291,879
271,330
Movements in working capital:
Decrease/(increase) in debtors
668,802
(882,298)
(Decrease)/increase in creditors
(198,206)
1,116,376
Cash generated from operations
1,114,225
986,044
25
Analysis of changes in net debt
1 November 2022
Cash flows
New finance leases
31 October 2023
£
£
£
£
Cash at bank and in hand
320,859
17,986
-
338,845
Bank overdrafts
(1,988)
1,988
-
318,871
19,974
338,845
Borrowings excluding overdrafts
(1,508,549)
344,484
-
(1,164,065)
Obligations under finance leases
(708,357)
319,204
(371,132)
(760,285)
(1,898,035)
683,662
(371,132)
(1,585,505)
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