Company registration number 04187661 (England and Wales)
MWAY COMMUNICATIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
MWAY COMMUNICATIONS LIMITED
COMPANY INFORMATION
Directors
L J Day
S A Crawford
T Watson
Company number
04187661
Registered office
Unit B
Meadowbank Industrial Estate
Harrison Street
Rotherham
South Yorkshire
S61 1EE
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
MWAY COMMUNICATIONS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 22
MWAY COMMUNICATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Fair review of the business

Turnover has reduced, year on year, to £9,462,238 (2023: £11,448,707). This is the second consecutive year that revenue has reduced and reflects the continued focus by the Directors to target specialist schemes that deliver higher gross margins.

The ongoing eight National Highways SDF Framework lots have a further three years to run. Tendering activity, outside the framework has been very successful in the year. This adapted approach to pricing and tendering is now reaping rewards following an internal redistribution of responsibilities, resulting in an even greater emphasis on the submission of tenders designed to deliver high quality schemes at excellent margins for the business.

The business continues to benefit from the cost reduction programme carried out in the previous financial year. This programme has been followed up by reducing premises costs as a result of coming out of a smaller, secondary location and consolidating all activity into its Rotherham headquarters.

Further internal improvements to the commercial and finance processes mean our accounts and commercial teams are more aligned.

Principal risks & uncertainties

Although the construction sector has, and continues to face significant challenges, the Directors are satisfied with the positioning of the business within the sector, focussing on core specialisms and projects that deliver strong margins. This represents a sea change from the previous approach which was to target large scale projects that ultimately delivered poor margins and carried significant levels of risk.

Bad and uncertain debt is much less of a risk for the business now than at any time in the last five years. Large-scale legacy contracts, coupled with Covid and Brexit, gave rise to the greatest risk for the business. Current schemes are either being run under the National Highways framework lots or are smaller projects in respect of which our exposure to risk is limited.

Key performance indicators

Gross margin 14.2% (2023: 14.4%)

EBITDA £356,274 (2023: £432,219)

Pre-tax profit of £39,685 (2023: £279,709)

 

At the time of completing this report, the group surpassed 8 years without a RIDDOR, working in a high-risk environment.

Other information and explanations

The Directors are anticipating a strong forthcoming year, with forecast revenue of between £10m and £11m this being slightly up on this year. Profitability is expected to increase significantly, due to a combination of a strong gross margin on the ongoing schemes and a much lower interest cost affecting net profit in the year. At the time of signing these accounts, the company’s quarter one results show a net profit more than 37% up against the year to date forecast at this stage of the year.

On behalf of the board

S A Crawford
Director
16 August 2024
MWAY COMMUNICATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company continued to be that of Highway Technology Works.

Results and dividends

The results for the year are set out on page 7.

No ordinary dividends were paid. 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:

L J Day
S A Crawford
J P R Derrick
(Resigned 31 May 2023)
T Watson
Auditor

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

Statement of directors' responsibilities

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

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.

MWAY COMMUNICATIONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
On behalf of the board
S A Crawford
Director
16 August 2024
MWAY COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MWAY COMMUNICATIONS LIMITED
- 4 -
Opinion

We have audited the financial statements of Mway Communications Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty relating to going concern

We draw attention to note 1.2 in the financial statements which provides detail around management's assessment of going concern. Sensitivities within the cashflow forecasts present a risk and potential breaches in bank covenants may cast doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

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.

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:

MWAY COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MWAY COMMUNICATIONS LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

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

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:

MWAY COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MWAY COMMUNICATIONS LIMITED (CONTINUED)
- 6 -

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

To address the risk of fraud through management bias and override of controls, we:

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

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.

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.

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.

Terri Pierpoint
Senior Statutory Auditor
For and on behalf of BHP LLP
16 August 2024
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
MWAY COMMUNICATIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
Notes
£
£
Turnover
9,462,238
11,448,707
Cost of sales
(8,120,463)
(9,805,369)
Gross profit
1,341,775
1,643,338
Administrative expenses
(1,085,595)
(1,278,724)
Other operating income
47,401
-
0
Operating profit
3
303,581
364,614
Interest payable and similar expenses
7
(263,896)
(84,905)
Profit before taxation
39,685
279,709
Tax on profit
8
(32,000)
(71,250)
Profit for the financial year
7,685
208,459

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

MWAY COMMUNICATIONS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
168,577
67,752
Current assets
Stocks
12
194,829
134,727
Debtors
13
3,358,804
4,207,025
Cash at bank and in hand
300
225
3,553,933
4,341,977
Creditors: amounts falling due within one year
14
(2,829,966)
(3,559,266)
Net current assets
723,967
782,711
Total assets less current liabilities
892,544
850,463
Creditors: amounts falling due after more than one year
15
(232,689)
(230,293)
Provisions for liabilities
Deferred tax liability
18
(49,000)
(81,000)
49,000
81,000
Net assets
708,855
701,170
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
708,755
701,070
Total equity
708,855
701,170

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 16 August 2024 and are signed on its behalf by:
S A Crawford
Director
Company registration number 04187661 (England and Wales)
MWAY COMMUNICATIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
100
547,611
547,711
Year ended 31 March 2023:
Profit and total comprehensive income
-
208,459
208,459
Dividends
9
-
(55,000)
(55,000)
Balance at 31 March 2023
100
701,070
701,170
Year ended 31 March 2024:
Profit and total comprehensive income
-
7,685
7,685
Balance at 31 March 2024
100
708,755
708,855
MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
1
Accounting policies
Company information

Mway Communications Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit B, Meadowbank Industrial Estate, Harrison Street, Rotherham, South Yorkshire, S61 1EE.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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

 

 

The financial statements of the company are consolidated in the financial statements of Notul Limited. These consolidated financial statements are available from its registered office.

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 11 -
1.2
Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. In considering the status of the company, the directors have reviewed the balance sheet position and the monthly management accounts that are produced to assess the ongoing financial performance and standing. They then reviewed their current order book, this being confirmed work that they are due to deliver over the next 12 months and beyond, and included a very modest element of speculative work, to produce a forecast.

The company has an agreed Time to Pay (“TTP”) repayment schedule with HMRC in respect of monies owed. This agreement has been in place since September 2023 and at the time of signing these accounts only one monthly repayment amount remains.

The level of overall underlying external debt in the business has again reduced over the last year, most notably through the repayment of amounts owed to HMRC, referred to above, and the reduction of asset finance debt.

The business continues to work closely with its bank and has agreed the ongoing provision of its current facility. The medium / long term objective is for the business to gradually reduce the size of the facility over the next couple of years, which will be made possible by the anticipated cash generation through that period. It is expected that this reduction will commence in the second half of the next financial year.

The financial forecast prepared for 2024/25 shows a modest increase in revenue but a significant improvement in EBITDA and net profit. Further to this, for the 2024/25 year to date, the group’s financial results are considerably better than forecast at this stage.

The directors do acknowledge a material uncertainty however, that potential breaches in bank covenants and sensitivities within the cashflow forecasts represent a degree of risk, and the company is reliant in that sense on the continued support of the bank and funders.

The directors' review of the management information, forecasts and orderbook has given them comfort that the company will be able to meet its obligations over the coming year and into the 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 goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue represents amounts receivable in relation to long term construction contracts and is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 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:

Software
3-5 years straight line
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Land and buildings Leasehold
10% Straight Line
Plant and machinery
20% Straight Line
Fixtures, fittings & equipment
20% Straight Line
Computer equipment
33% Straight Line
Motor vehicles
14% - 20% 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 credited or charged to profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, 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.

1.8
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

 

See note 2 for further information on the construction contract accounting policy.

1.9
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand.

1.10
Financial instruments

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

 

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

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
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.

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.

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.

Basic financial liabilities

Basic financial liabilities, including creditors, 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.

 

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 at transaction price.

Derecognition of financial liabilities

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

1.11
Equity instruments

Share capital issued by the company is recorded at the proceeds received, net of direct issue costs. Dividends payable on share capital are recognised as liabilities once they are no longer at the discretion of the company.

1.12
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.

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.

1.13
Retirement benefits

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

1.14
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 leases asset are consumed.

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

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

Stock

Stock is reviewed for obsolescence with reference to the holding quantity, purchases in the year and volume consumed. Stock aged more than one year is provided for in full. Further to this, management review the stock on a line by line basis for those items not fully provided for that we know have become obsolete during the period – e.g. purchased for a specific scheme which has now finished and required specialist stock. Management then review for items recently purchased that may be inappropriately provided for, and for any known orders to reduce the provision accordingly.

Turnover from long term construction contracts

Turnover is generated from long term contracts. The company recognises contract revenue and contract costs associated with each contract using the percentage of completion method. The recognition of revenue and profit therefore rely on estimates in relation to the stage of completion and the forecast total costs of each contract.

At each month end, all contracts are valued by the internal quantity surveyor allocated to the project. The valuation is compared to the expected total turnover on the contract and this forms the basis for the stage of completion.

This method ensures that profit is recognised equally across the life of the project. The calculation of expected outturn is based on the following factors:

- Variations to overall contract value (expected turnover) which have been agreed with the client

- Costs incurred to date allocated to the project

The degree of estimation uncertainty centres around the expected costs to complete the contract which, combined with the contract turnover, are used to calculate the expected margin outturn on each project.

When contract losses are anticipated these are recognised in full at the time of identification in so far as they can be measured reliably.

3
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
44,719
51,816
Depreciation of tangible fixed assets held under finance leases
7,974
15,380
(Profit)/loss on disposal of tangible fixed assets
(24,863)
6,587
Amortisation of intangible assets
-
409
Operating lease charges
106,376
109,516
MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
4
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
16,360
15,150
Audit of the financial statements of the company's subsidiaries
4,450
4,120
20,810
19,270
For other services
Taxation compliance services
3,730
3,450
5
Employees

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

2024
2023
Number
Number
Admin
14
19
Trading
51
78
Total
65
97

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
2,736,937
3,560,075
Social security costs
292,823
409,338
Pension costs
83,059
72,861
3,112,819
4,042,274
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
97,856
144,838
Company pension contributions to defined contribution schemes
26,167
829
124,023
145,667

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
210,432
57,216
Other interest on financial liabilities
15,148
13,951
Interest on finance leases and hire purchase contracts
390
858
Other interest
37,926
12,880
263,896
84,905
8
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
4,000
-
0
Deferred tax
Origination and reversal of timing differences
28,000
71,250
Total tax charge
32,000
71,250

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:

2024
2023
£
£
Profit before taxation
39,685
279,709
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
9,921
53,145
Tax effect of expenses that are not deductible in determining taxable profit
12,605
18
Change in unrecognised deferred tax assets
891
(145)
Adjustments in respect of prior years
4,000
(2,751)
Permanent capital allowances in excess of depreciation
4,401
3,188
Other permanent differences
182
-
0
Effect of change in deferred tax rates
-
0
17,795
Taxation charge for the year
32,000
71,250
9
Dividends
2024
2023
£
£
Final paid
-
0
55,000
MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
10
Intangible fixed assets
Software
£
Cost
At 1 April 2023 and 31 March 2024
53,531
Amortisation and impairment
At 1 April 2023 and 31 March 2024
53,531
Carrying amount
At 31 March 2024
-
0
At 31 March 2023
-
0
11
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2023
202,875
2,075
33,460
105,237
103,011
446,658
Additions
-
0
40,000
7,879
-
0
110,775
158,654
Disposals
-
0
-
0
-
0
-
0
(52,834)
(52,834)
At 31 March 2024
202,875
42,075
41,339
105,237
160,952
552,478
Depreciation and impairment
At 1 April 2023
177,152
127
30,824
76,597
94,206
378,906
Depreciation charged in the year
20,287
2,068
2,589
21,442
6,307
52,693
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
(47,698)
(47,698)
At 31 March 2024
197,439
2,195
33,413
98,039
52,815
383,901
Carrying amount
At 31 March 2024
5,436
39,880
7,926
7,198
108,137
168,577
At 31 March 2023
25,723
1,948
2,636
28,640
8,805
67,752

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

2024
2023
£
£
Plant and machinery
38,333
-
0
Motor vehicles
113,274
8,805
151,607
8,805
MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
194,829
134,727
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
969,896
244,992
Gross amounts owed by contract customers
676,085
1,820,480
Amounts owed by group undertakings
1,614,699
1,983,806
Other debtors
-
0
218
Prepayments and accrued income
98,124
157,529
3,358,804
4,207,025

Included within trade debtors are amounts due over one year amounting to £nil (2023: £72,541).

14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
196,017
968,268
Obligations under finance leases
17
21,867
10,713
Other borrowings
16
258,190
113,997
Trade creditors
1,294,228
1,469,279
Taxation and social security
626,603
681,541
Other creditors
44,201
44,171
Accruals and deferred income
388,860
271,297
2,829,966
3,559,266
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
17
124,991
-
0
Other borrowings
16
107,698
230,293
232,689
230,293
MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
16
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
196,017
968,268
Other loans
365,888
344,290
561,905
1,312,558
Payable within one year
454,207
1,082,265
Payable after one year
107,698
230,293

The bank overdraft is secured by a fixed and floating charge over the companies assets. Other borrowings of £365,888 (2023: £344,290) are secured by a guarantee from the Directors.

17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
21,867
10,713
In two to five years
124,991
-
0
146,858
10,713

Finance lease payments represent rentals payable by the company for certain motor vehicles and plant & 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 3-5 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 recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
37,000
8,200
Tax losses
(80,000)
(83,500)
Short term timing differences
(6,000)
(5,700)
(49,000)
(81,000)
MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
18
Deferred taxation
(Continued)
- 21 -
2024
Movements in the year:
£
Asset at 1 April 2023
(81,000)
Charge to profit or loss
32,000
Asset at 31 March 2024
(49,000)
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
83,059
72,861

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.

20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
21
Operating lease commitments
Lessee

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:

2024
2023
£
£
Within one year
67,383
44,280
Between two and five years
268,667
5,667
In over five years
328,083
-
0
664,133
49,947
22
Related party transactions
Transactions with related parties

As the company is a wholly owned subsidiary of Notul Limited, the company has taken advantage of the exemption allowed with Section 33 of FRS 102 and has not disclosed transactions or balances with the holding company or fellow wholly owned subsidiary undertakings.

MWAY COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
22
Related party transactions
(Continued)
- 22 -
Other information

In the year, sales of £12,355 (2023: £4,529) were made to Black Plant & Vehicle Hire Limited, a company which is 90% owned by S Crawford and L Day. A debtor balance remained outstanding at the year end of £10,857 (2023: £4,529) which is included in trade debtors.

 

In the year, there was £335,458 of purchases from Black Plant & Vehicle Hire Limited, a company which is 90% owned by S Crawford and L Day. A creditor balance remained outstanding at the year end of £147,847 which is included in trade creditors.

 

In the year, tangible fixed assets with a net book value of £5,137 (2023: £138,839) were disposed of to Black Plant & Vehicle Hire Limited, a company which is 90% owned by S Crawford and L Day. Proceeds on disposal were received of £30,000 (2023: £133,187).

23
Ultimate controlling party

Mway Communications Limited is a wholly owned subsidiary of Mway Services Limited. The ultimate parent company is Notul Limited, a company incorporated in England & Wales. Notul Limited prepares group accounts in which Mway Communications Ltd is consolidated. These acounts are available from Companies House.

 

At the year end the ultimate controlling party was Mr L Day by virtue of a 60% shareholding in Notul Limited.

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