Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
COMPANY INFORMATION
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SCRAPCO METAL RECYCLING LIMITED
CONTENTS
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SCRAPCO METAL RECYCLING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The company's principal activity was that of recycling metal waste, scrap and skip hire.
Having had regard to Section 417 of the Companies Act 2006 the directors consider the profit on ordinary activities to be in accordance with their expectations, after taking into account general trading conditions prevailing during the year under review.
The turnover of the company reduced by some £3.5m to £21,378,231 compared to the previous year. Gross profit margins have decreased by some 2% to 28.5%. The reduced turnover is due to the fall in metal prices during the year compared to a volatile year for prices in 2022. The directors are continually mindful of the volatility of prices and the need to invest in plant and diversify the activities of the company where practicable. The directors have invested some £1.1m in new plant to ensure the company remains competitive. The company has continued to develop the skip hire business which has reported a fall in revenue of £300k to £2m. Overall the 2023 results are in line with expectation. The directors expect 2024 to show reduced turnover, but similar margins, as a result of the reduction in metal prices and a cooling off of the market. The directors are aware of the challenges as when prices are high they can fall sharply and have plans in place to mitigate the effect of this.
The directors regularly review issues, risks and uncertainties that face the company in order to plan ways to mitigate risk.
The commodity prices, particularly when moving on a downward trend, present an ongoing challenge for the company to ensure they do not pay too much for material, while at the same time offering prices at a level sufficient to attract sellers. Stock holding during such times can lead to stock losses if prices work against the company. Material which is recycled is mostly destined for the emerging export markets. Economic buoyancy in those locations determine demand and consequently price. The company operates in a high value capital intensive industry. Individual items of plant can cost £3/4 million or more. Investment on such scale will be necessary for the company to retain its competitive edge and operate efficiently. The company operates in an industry which is highly regulated by various Government agencies and compliance with increasing regulation always presents a risk in addition to escalating costs.
The gross profit of the company for the current year is 28.5% compared to 30.6% in the prior year. The current ratio is at 1.10 (2022 - 0.94) and quick ratio is at 0.87 (2022 - 0.64). The average stockholding period was 26 days (2022 - 23 days) and has fixed asset turnover at 8 (2022 - 9).
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SCRAPCO METAL RECYCLING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board on 26 July 2024 and signed on its behalf.
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SCRAPCO METAL RECYCLING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgments 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 to 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.
The profit for the year, after taxation, amounted to £697,433 (2022 - £1,975,974).
During the year the directors recommended the payment of dividends totalling £157,300 (2022 - £125,700). The directors do not recommend the payment of a further dividend.
The directors who served during the year were:
The directors are not aware of any future developments which would have a significant effect on the company, other than as noted in the strategic report.
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SCRAPCO METAL RECYCLING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
There have been no significant events affecting the company since the year end.
The auditors, Clay Ratnage Daffin & Co Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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SCRAPCO METAL RECYCLING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCRAPCO METAL RECYCLING LIMITED
We have audited the financial statements of Scrapco Metal Recycling Limited (the 'company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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 Auditors' 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.
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SCRAPCO METAL RECYCLING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCRAPCO METAL RECYCLING LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the 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.
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.
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SCRAPCO METAL RECYCLING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCRAPCO METAL RECYCLING LIMITED (CONTINUED)
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 Auditors' 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:
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Obtaining an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. • Obtained an understanding of how the company are complying with those legal and regulatory frameworks by making enquiries to the management of the company’s accounting department, and management itself. • The susceptibility of the company’s financial statements to material misstatement caused by fraud or other irregularities were assessed with the following procedures: o Identifying and assessing the design effectiveness of controls which management have in place to prevent and detect fraud o Understanding how those charged with governance considered and addressed the potential for override of controls and management biases o Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations o Assessing the extent of compliance with the relevant laws and regulations o Assessing the extent to which pressures existed which may have increased the risk of fraudulent revenue recognition Potential fraud risks that had been identified throughout the planning and commencement of the audit were communicated to the audit team. The inherent limitations of audit present an unavoidable risk that we, the auditors, may not have detected some material misstatements within the financial statements despite proper planning and performance of our duties as auditors. Equally, there remains a risk of the non-detection of fraud which could involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. The audit procedures carried out are designed to detect material misstatements within the financial statements, and as such we take no responsibility for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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SCRAPCO METAL RECYCLING LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCRAPCO METAL RECYCLING LIMITED (CONTINUED)
for and on behalf of
Chartered Accountants
Statutory Auditors
Suite D, The Business Centre
Faringdon Avenue
Essex
RM3 8EN
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SCRAPCO METAL RECYCLING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
REGISTERED NUMBER: 07395898
BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 12 to 25 form part of these financial statements.
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SCRAPCO METAL RECYCLING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Scrapco Metal Recycling Limited is a private company limited by shares, incorported in England, United Kingdom. The address of the registered office is Suite D, The Business Centre, Faringdon Avenue, Romford, RM3 8EN. The principal place of business is 2a Landau Way, Erith, DA8 2LF.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The financial information in the accounts is rounded to the nearest £1.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Hunn Group Limited as at 31 December 2023 and these financial statements may be obtained from the registered office.
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
The whole of the turnover is attributable to the company's principal activity.
Analysis of turnover by country of destination:
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
There were no factors that may affect future tax charges.
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Profit & loss account
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SCRAPCO METAL RECYCLING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £33,203 (2022 - £33,188). Contributions totalling £6,668 (2022 - £6,274) were payable to the fund at the balance sheet date and are included in creditors.
The parent company is Hunn Group Limited incorporated in England and Wales, registered office Suite D, The Business Centre, Faringdon Avenue, Romford, RM3 8EN. The ultimate controlling party is Mr R G Hunn.
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