Company registration number 01901361 (England and Wales)
KEITH WALTON CONSTRUCTION COMPANY LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
KEITH WALTON CONSTRUCTION COMPANY LTD
COMPANY INFORMATION
Directors
Mr H J Clayton
Mr K Walton
Secretary
Mrs H E Atkin Watson
Company number
01901361
Registered office
Southfield House
Southfield Street
Nelson
Lancashire
BB9 9QF
Auditor
NRB Chartered Accountants
1st Floor, Waterside House
Waterside Drive
Wigan
Lancashire
WN3 5AZ
Business address
Southfield House
Southfield Street
Nelson
Lancashire
BB9 9QF
Bankers
Handelsbanken plc
Greenbank Court
Challenge Way
Greenbank Business Park
Blackburn
Lancashire
BB1 5QB
KEITH WALTON CONSTRUCTION COMPANY LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 27
KEITH WALTON CONSTRUCTION COMPANY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The principal activity of the group during the year continued to be that of a specialist masonry contractor, working with large clients on commercial, retail and residential builds. We have maintained our relationships with our long-term client base and forged new relationships as a result of our performance and quality workmanship. We have maintained our high standards in respect of Health & Safety, Quality, Environmental and Sustainability matters as this is the key to our long term success.
The financial year has shown a much stronger trading performance with increased turnover of £12.6m (2022 - £9.8m) and an improved profit before taxation of £1,808k (2022 - £522k). We attribute the increased profitability to our proactive approach to managing inflation, control of salaries and working for our key clients.
We recognise the importance of building the foundations for the next generation of bricklayers and construction professionals to ensure the longevity of our business, and as such we have continued to provide apprenticeships and promote the development and progression of our whole team, both onsite and in the office.
We, like many others, have increased our efforts to support and drive environmental changes in our bid to reduce our carbon footprint. This has been done by investing in more electric vehicles and working with suppliers and labour local to contracts to reduce travel.
Principal risks and uncertainties
The company and group do not actively use financial instruments as part of their financial risk management. The company is exposed to the usual credit risk and cash flow risk associated with selling on credit but, as all the parent company's sales are made to a group company, these risks are minimal. The subsidiary's risk arising from selling on credit is managed through credit control procedures. The nature of their financial instruments means that they are not subject to price risk or liquidity risk. The group policy is to finance working capital through group retained earnings.
Other risks and uncertainties identified by the directors which could adversely and materially affect the group, but which are actively managed and appropriate actions taken to mitigate these risks, are as follows:-
Labour retention - as in previous years, the group has identified the potential risk of both the acquisition and retention of bricklayers. To mitigate these risks, the group actively monitors the market conditions and pay out rates. In addition, the group provides apprenticeships for bricklayers and maintains good relationships with several colleges.
Inflation - uncertainty surrounding inflation has previously been identified as a risk to group contracts and pricing. This has been addressed during the financial year by using projections and adjusted price planning by the directors.
Development and performance
Whilst the current and future economic climate remains uncertain, the group's secured and targeted workload remains largely in established sectors which remain reasonably active, including public sector schemes, education and healthcare. With our current workflow, we are expecting turnover for the forthcoming year to increase. We are increasing the opportunities for apprentices year on year to ensure the continuity of our workforce.
KEITH WALTON CONSTRUCTION COMPANY LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
The directors consider the group's key performance indicators to be those that communicate the financial strength of the group as a whole, being turnover, gross profit, operating profit and profit before taxation as set out in the profit and loss account.
These key performance indicators are monitored by the board of directors. In addition to the above, contract margins are monitored monthly to ensure that the group's contracts are progressing as planned and in a timely manner.
Non-financial key performance indicators are measured on an annual basis using customer feedback questionnaires. This is also a requirement of our ISO 9001:2005 accredited management system to evaluate client satisfaction with the finished product, our service levels, the overall programme and time taken, health and safety, communication and commercial aspects of the project.
Mr H J Clayton
Director
20 August 2024
KEITH WALTON CONSTRUCTION COMPANY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the group continued to be that of specialist brickwork masonry contracting together with the provision of management and administrative services and hire of plant and other fixed assets by the parent company.
Results and dividends
The results for the year are set out on page 8.
Interim ordinary dividends have been paid amounting to £500,000. 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:
Mr H J Clayton
Mr K Walton
Auditor
NRB Chartered Accountants were appointed as auditor to the group.
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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure in the strategic report
The disclosures in respect of the business review, future developments and the financial risk, objectives and policies are included in the strategic report. true
KEITH WALTON CONSTRUCTION COMPANY LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
On behalf of the board
Mr H J Clayton
Director
20 August 2024
KEITH WALTON CONSTRUCTION COMPANY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KEITH WALTON CONSTRUCTION COMPANY LTD
- 5 -
Opinion
We have audited the financial statements of Keith Walton Construction Company Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and the parent company's affairs as at 31 December 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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 group's and parent 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.
KEITH WALTON CONSTRUCTION COMPANY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEITH WALTON CONSTRUCTION COMPANY LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:
The nature of the industry and the group and company’s control environment.
Results of our enquiries of management.
The group and company’s procedures and controls on compliance with laws and regulations and the risks of fraud.
Discussions among the audit engagement team concerning potential indicators of fraud.
We are also required to perform specific procedures to respond to the risk of management override.
As a result of our audit procedures we did not identify a material risk of fraud or other non-compliance with 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.
KEITH WALTON CONSTRUCTION COMPANY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEITH WALTON CONSTRUCTION COMPANY LTD
- 7 -
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.
Neil Whittingham BA FCA ATT (Senior Statutory Auditor)
20 August 2024
for and on behalf of NRB
1st Floor Waterside House
Waterside Drive
Wigan
Lancashire
WN3 5AZ
KEITH WALTON CONSTRUCTION COMPANY LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
12,615,256
9,760,716
Cost of sales
(8,965,432)
(7,506,027)
Gross profit
3,649,824
2,254,689
Administrative expenses
(1,857,003)
(1,722,406)
Operating profit
4
1,792,821
532,283
Interest receivable and similar income
8
5,677
Interest payable and similar expenses
9
(2,402)
(2,409)
Gain or loss on investments held at fair value
10
11,945
(7,579)
Profit before taxation
1,808,041
522,295
Tax on profit
11
(392,899)
(90,472)
Profit for the financial year
1,415,142
431,823
Total comprehensive income for the year is all attributable to the owners of the parent company.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
KEITH WALTON CONSTRUCTION COMPANY LTD
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
988,034
889,417
Current assets
Debtors
16
3,136,483
1,942,584
Investments
17
539,684
527,739
Cash at bank and in hand
1,272,001
1,175,309
4,948,168
3,645,632
Creditors: amounts falling due within one year
18
(1,420,561)
(975,281)
Net current assets
3,527,607
2,670,351
Total assets less current liabilities
4,515,641
3,559,768
Creditors: amounts falling due after more than one year
19
(42,085)
(21,065)
Provisions for liabilities
20
(122,170)
(102,459)
Net assets
4,351,386
3,436,244
Capital and reserves
Called up share capital
23
25,129
25,129
Share premium account
82,458
82,458
Capital redemption reserve
5,707
5,707
Profit and loss reserves
4,238,092
3,322,950
Equity attributable to owners of the parent company
4,351,386
3,436,244
The financial statements were approved by the board of directors and authorised for issue on 20 August 2024 and are signed on its behalf by:
20 August 2024
Mr H J Clayton
Director
KEITH WALTON CONSTRUCTION COMPANY LTD
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
403,879
322,969
Investment properties
14
375,000
375,000
Investments
15
169,900
169,900
948,779
867,869
Current assets
Debtors
16
1,860,748
1,086,531
Investments
17
539,684
527,739
Cash at bank and in hand
18,743
81,954
2,419,175
1,696,224
Creditors: amounts falling due within one year
18
(168,067)
(184,755)
Net current assets
2,251,108
1,511,469
Total assets less current liabilities
3,199,887
2,379,338
Provisions for liabilities
20
(76,382)
(61,513)
Net assets
3,123,505
2,317,825
Capital and reserves
Called up share capital
23
25,129
25,129
Share premium account
82,458
82,458
Capital redemption reserve
5,707
5,707
Profit and loss reserves
3,010,211
2,204,531
Total equity
3,123,505
2,317,825
The financial statements were approved by the board of directors and authorised for issue on 20 August 2024 and are signed on its behalf by:
20 August 2024
Mr H J Clayton
Director
Company Registration No. 01901361
KEITH WALTON CONSTRUCTION COMPANY LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
25,129
82,458
5,707
3,491,127
3,604,421
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
-
431,823
431,823
Dividends
12
-
-
-
(600,000)
(600,000)
Balance at 31 December 2022
25,129
82,458
5,707
3,322,950
3,436,244
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
1,415,142
1,415,142
Dividends
12
-
-
-
(500,000)
(500,000)
Balance at 31 December 2023
25,129
82,458
5,707
4,238,092
4,351,386
KEITH WALTON CONSTRUCTION COMPANY LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
25,129
82,458
5,707
2,172,301
2,285,595
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
632,230
632,230
Dividends
12
-
-
-
(600,000)
(600,000)
Balance at 31 December 2022
25,129
82,458
5,707
2,204,531
2,317,825
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
1,305,680
1,305,680
Dividends
12
-
-
-
(500,000)
(500,000)
Balance at 31 December 2023
25,129
82,458
5,707
3,010,211
3,123,505
KEITH WALTON CONSTRUCTION COMPANY LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,109,182
940,030
Interest paid
(2,402)
(2,409)
Income taxes paid
(105,263)
(116,292)
Net cash inflow from operating activities
1,001,517
821,329
Investing activities
Purchase of tangible fixed assets
(256,510)
(110,373)
Proceeds on disposal of tangible fixed assets
80,251
46,999
Other loans (advanced)/repaid
(196,580)
480
Interest received
5,677
Net cash used in investing activities
(367,162)
(62,894)
Financing activities
Payment of finance leases obligations
(37,663)
(30,240)
Dividends paid to equity shareholders
(500,000)
(600,000)
Net cash used in financing activities
(537,663)
(630,240)
Net increase in cash and cash equivalents
96,692
128,195
Cash and cash equivalents at beginning of year
1,175,309
1,047,114
Cash and cash equivalents at end of year
1,272,001
1,175,309
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information
Keith Walton Construction Company Ltd (“the Company”) is a limited company domiciled and incorporated in England and Wales. The registered office is Southfield House, Southfield Street, Nelson, Lancashire, BB9 9QF.
The Group consists of Keith Walton Construction Company Ltd and its trading subsidiary, Keith Walton Brickwork Limited.
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, as modified to include the valuation of investments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £805,680 (2022 - £132,230 profit).
1.2
Basis of consolidation
The consolidated financial statements incorporate those of Keith Walton Construction Company Ltd and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired have been consolidated using the merger accounting method. Their results are incorporated from the date that control passes. All financial statements are made up to 31 December 2023.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
1.3
Going concern
The directors are not aware of any material uncertainties affecting the company and group and consider that the company and group will have sufficient resources to continue trading for the foreseeable future. As a result the directors have continued to adopt the going concern basis in preparing the financial statements.
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.4
Turnover
Turnover represents the value of work performed for third parties net of VAT and trade discounts.
Long term contract balances are included in debtors at realisable value to recognise the group's right to receive consideration by its performance under contract works.
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.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
not depreciated
Plant and machinery
25% straight line or reducing balance
Fixtures, fittings & equipment
25% to 33.33% straight line or reducing balance
Motor vehicles
33.33% reducing balance
In the opinion of the directors, the group's freehold land and buildings at Southfield Street, Nelson are maintained to a relatively high standard and they consider their net realisable value to be not materially different to the acquisition price of £375,000. As a consequence, no depreciation has been charged in these financial statements.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.6
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and are subsequently measured at cost less any accumulated impairment losses at each reporting date. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.9
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.
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.10
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
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. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
1.11
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.12
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.14
Retirement benefits
The pension costs charged in the financial statements represent the contributions payable by the group during the period in accordance with FRS 102.
1.15
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.
1.16
Income in respect of retentions is incorporated in the Profit and Loss Account as such income becomes receivable. Any costs incurred by the group in claiming the retentions held by its customers are charged to the Profit and Loss Account in the period in which they are incurred.
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The 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.
WIP estimates
Work in progress for ongoing contracts is considered to be a key accounting estimate for which detailed assessments are made by senior management for each and every contract on a quarterly basis which includes the financial year-end.
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover and other revenue
An analysis of the group's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Brickwork masonry contractors
12,615,256
9,760,716
2023
2022
£
£
Other significant revenue
Interest income
5,677
-
The group's income was generated wholly within the United Kingdom.
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
170,124
185,694
Depreciation of tangible fixed assets held under finance leases
22,801
24,427
Profit on disposal of tangible fixed assets
(37,093)
(35,165)
Cost of stocks recognised as an expense
3,814,943
3,207,749
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 group and company
6,000
8,150
Audit of the financial statements of the company's subsidiaries
11,520
11,300
17,520
19,450
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Management and Administration
16
14
16
14
Production
61
66
-
-
Total
77
80
16
14
Their aggregate remuneration comprised:
Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,628,792
3,433,620
904,986
740,831
Social security costs
100,435
86,818
100,435
86,818
Pension costs
122,235
106,306
63,854
56,649
3,851,462
3,626,744
1,069,275
884,298
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
484,562
455,252
Company pension contributions to defined contribution schemes
45,100
43,150
529,662
498,402
The number of group directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
173,977
168,564
Company pension contributions to defined contribution schemes
27,700
27,700
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 20 -
Dividends totalling £500,000 (2022 - £600,000) were paid in the year in respect of shares held by the group's directors.
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
5,677
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
80
-
Interest on finance leases and hire purchase contracts
2,322
2,409
Total finance costs
2,402
2,409
10
Gain or loss on investments held at fair value
2023
2022
£
£
Increase/(decrease) in investments held at fair value
11,945
(7,579)
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
408,302
105,241
Adjustments in respect of prior periods
(35,114)
(1,609)
Total current tax
373,188
103,632
Deferred tax
Origination and reversal of timing differences
19,711
(13,160)
Total tax charge
392,899
90,472
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 21 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,808,041
522,295
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
425,251
99,236
Tax effect of expenses that are not deductible in determining taxable profit
4,263
2,010
Tax effect of income not taxable in determining taxable profit
(2,809)
Adjustments in respect of prior years
(35,114)
(1,609)
Effect of change in corporation tax rate
1,167
(3,158)
Other non-reversing timing differences
8
Enhanced capital allowances claimed
133
(6,007)
Taxation charge
392,899
90,472
12
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
500,000
600,000
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Tangible fixed assets
Group
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
375,000
578,873
456,444
865,520
2,275,837
Additions
72,354
21,757
240,589
334,700
Disposals
(47,859)
(145,549)
(112,205)
(305,613)
At 31 December 2023
375,000
603,368
332,652
993,904
2,304,924
Depreciation and impairment
At 1 January 2023
403,788
373,308
609,324
1,386,420
Depreciation charged in the year
41,721
18,507
132,697
192,925
Eliminated in respect of disposals
(41,183)
(145,024)
(76,248)
(262,455)
At 31 December 2023
404,326
246,791
665,773
1,316,890
Carrying amount
At 31 December 2023
375,000
199,042
85,861
328,131
988,034
At 31 December 2022
375,000
175,085
83,136
256,196
889,417
Company
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
276,658
365,171
480,886
1,122,715
Additions
59,570
26,279
192,014
277,863
Disposals
(47,859)
(145,549)
(112,205)
(305,613)
At 31 December 2023
288,369
245,901
560,695
1,094,965
Depreciation and impairment
At 1 January 2023
178,178
331,831
289,737
799,746
Depreciation charged in the year
30,955
17,091
105,749
153,795
Eliminated in respect of disposals
(41,183)
(145,024)
(76,248)
(262,455)
At 31 December 2023
167,950
203,898
319,238
691,086
Carrying amount
At 31 December 2023
120,419
42,003
241,457
403,879
At 31 December 2022
98,480
33,340
191,149
322,969
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Tangible fixed assets
(Continued)
- 23 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2023
2022
2023
2022
£
£
£
£
Motor vehicles
104,251
48,861
14
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 January 2023 and 31 December 2023
-
375,000
The company's freehold land and buildings at Southfield House, Southfield Street, Nelson, Lancashire BB9 9QF have been reclassified as an investment property in the parent company's financial statements under the requirements of FRS 102.
In the opinion of the directors, the company's investment property is maintained to a relatively high standard and they consider its fair value to be not materially different from the acquisition price of £375,000.
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
25
169,900
169,900
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
169,900
Carrying amount
At 31 December 2023
169,900
At 31 December 2022
169,900
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Gross amounts owed by contract customers
2,395,460
1,458,648
Corporation tax recoverable
35,136
Amounts owed by group undertakings
-
-
1,647,668
1,086,531
Other debtors
554,001
338,628
213,080
Prepayments and accrued income
151,886
145,308
3,136,483
1,942,584
1,860,748
1,086,531
Other debtors include advances made to two of the group's directors totalling £196,580.
17
Current asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Unlisted investments
539,684
527,739
539,684
527,739
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
20
43,540
24,033
Trade creditors
486,972
505,436
46
5,788
Corporation tax payable
408,302
105,241
47,951
25,457
Other taxation and social security
186,652
150,262
104,702
93,864
Other creditors
47,529
47,529
Accruals and deferred income
295,095
142,780
15,368
12,117
1,420,561
975,281
168,067
184,755
Other creditors represented amounts advanced to the group by one of its directors.
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
20
42,085
21,065
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
46,425
25,521
In two to five years
43,921
21,327
90,346
46,848
-
-
Less: future finance charges
(4,721)
(1,750)
85,625
45,098
Net obligations under finance leases are secured by fixed charges on the assets concerned.
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit and loss in respect of defined contribution schemes
122,235
106,306
Defined contribution pension schemes are operated for employees. The assets of these schemes are held separately from those of the group in independently administered funds.
22
Deferred taxation
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
122,170
102,459
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
76,382
61,513
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Deferred taxation
(Continued)
- 26 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
102,459
61,513
Charge to profit or loss
19,711
14,869
Liability at 31 December 2023
122,170
76,382
23
Share capital
Group and company
2023
2022
Ordinary share capital
£
£
Issued and fully paid
25,129 Ordinary Shares of £1 each
25,129
25,129
24
Financial commitments, guarantees and contingent liabilities
The parent company has guaranteed the bank borrowings of its subsidiary company, Keith Walton Brickwork Limited. At the financial period end these bank borrowings amounted to £nil (2022 - £nil).
25
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office key
shares held
Direct
Indirect
Keith Walton Brickwork Limited
1
Brickwork masonry contractors
Ordinary
100.00
-
Registered Office addresses:
1 Southfield House, Southfield Street, Nelson, Lancashire BB9 9QF
26
Controlling party
The ultimate controlling party is Mr K Walton, a director of the company, by virtue of his beneficial interest in The Keith Walton (1999) Settlement, which owns the majority of the share capital of the company.
KEITH WALTON CONSTRUCTION COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
27
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
1,415,142
431,823
Adjustments for:
Taxation charged
392,899
90,472
Finance costs
2,402
2,409
Investment income
(5,677)
Gain on disposal of tangible fixed assets
(37,093)
(35,165)
Depreciation and impairment of tangible fixed assets
192,925
210,121
Loss/(gain) on investments
(11,945)
7,579
Movements in working capital:
(Increase)/decrease in debtors
(962,183)
29,556
Increase in creditors
122,712
203,235
Cash generated from operations
1,109,182
940,030
28
Analysis of changes in net funds - group
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
1,175,309
96,692
-
1,272,001
Obligations under finance leases
(45,098)
37,663
(78,190)
(85,625)
1,130,211
134,355
(78,190)
1,186,376
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.200Mr H J ClaytonMr K WaltonMrs H E Atkin WatsonfalsefalsePaul MouldingPierce C.A. Limited2023-12-312023-12-3101901361bus:Consolidated2023-01-012023-12-31019013612023-01-012023-12-3101901361bus:Director12023-01-012023-12-3101901361bus:Director22023-01-012023-12-3101901361bus:CompanySecretary12023-01-012023-12-3101901361bus:RegisteredOffice2023-01-012023-12-3101901361bus:Agent12023-01-012023-12-3101901361bus:Consolidated2023-12-3101901361bus:Consolidated2022-01-012022-12-31019013612022-01-012022-12-31019013612023-12-3101901361bus:Consolidated2022-12-31019013612022-12-3101901361core:LandBuildingscore:OwnedOrFreeholdAssetsbus:Consolidated2023-12-3101901361core:PlantMachinerybus:Consolidated2023-12-3101901361core:FurnitureFittingsbus:Consolidated2023-12-3101901361core:MotorVehiclesbus:Consolidated2023-12-3101901361core:LandBuildingscore:OwnedOrFreeholdAssetsbus:Consolidated2022-12-3101901361core:PlantMachinerybus:Consolidated2022-12-3101901361core:FurnitureFittingsbus:Consolidated2022-12-3101901361core:MotorVehiclesbus:Consolidated2022-12-3101901361core:PlantMachinery2023-12-3101901361core:FurnitureFittings2023-12-3101901361core:MotorVehicles2023-12-3101901361core:PlantMachinery2022-12-3101901361core:FurnitureFittings2022-12-3101901361core:MotorVehicles2022-12-3101901361core:ShareCapitalbus:Consolidated2023-12-3101901361core:ShareCapitalbus:Consolidated2022-12-3101901361core:SharePremiumbus:Consolidated2023-12-3101901361core:SharePremiumbus:Consolidated2022-12-3101901361core:CapitalRedemptionReservebus:Consolidated2023-12-3101901361core:CapitalRedemptionReservebus:Consolidated2022-12-3101901361core:ShareCapital2023-12-3101901361core:ShareCapital2022-12-3101901361core:SharePremium2023-12-3101901361core:SharePremium2022-12-3101901361core:CapitalRedemptionReserve2023-12-3101901361core:CapitalRedemptionReserve2022-12-3101901361core:RetainedEarningsAccumulatedLosses2023-12-3101901361core:RetainedEarningsAccumulatedLosses2022-12-3101901361core:ShareCapitalbus:Consolidated2021-12-3101901361core:SharePremiumbus:Consolidated2021-12-3101901361core:CapitalRedemptionReservebus:Consolidated2021-12-31019013612021-12-3101901361core:RetainedEarningsAccumulatedLossesbus:Consolidated2022-12-3101901361core:RetainedEarningsAccumulatedLossesbus:Consolidated2023-12-3101901361core:ShareCapital2021-12-3101901361core:SharePremium2021-12-3101901361core:CapitalRedemptionReserve2021-12-3101901361core:RetainedEarningsAccumulatedLosses2021-12-3101901361core:CurrentFinancialInstruments2023-12-3101901361core:CurrentFinancialInstruments2022-12-3101901361bus:Consolidated2021-12-3101901361core:LandBuildingscore:OwnedOrFreeholdAssets2023-01-012023-12-3101901361core:PlantMachinery2023-01-012023-12-3101901361core:FurnitureFittings2023-01-012023-12-3101901361core:MotorVehicles2023-01-012023-12-3101901361core:LeasedAssetsbus:Consolidated2023-01-012023-12-3101901361core:LeasedAssetsbus:Consolidated2022-01-012022-12-3101901361core:UKTaxbus:Consolidated2023-01-012023-12-3101901361core:UKTaxbus:Consolidated2022-01-012022-12-3101901361bus:Consolidated12023-01-012023-12-3101901361bus:Consolidated12022-01-012022-12-3101901361core:LandBuildingscore:OwnedOrFreeholdAssetsbus:Consolidated2022-12-3101901361core:PlantMachinerybus:Consolidated2022-12-3101901361core:FurnitureFittingsbus:Consolidated2022-12-3101901361core:MotorVehiclesbus:Consolidated2022-12-3101901361bus:Consolidated2022-12-3101901361core:PlantMachinery2022-12-3101901361core:FurnitureFittings2022-12-3101901361core:MotorVehicles2022-12-31019013612022-12-3101901361core:LandBuildingscore:OwnedOrFreeholdAssetsbus:Consolidated2023-01-012023-12-3101901361core:PlantMachinerybus:Consolidated2023-01-012023-12-3101901361core:FurnitureFittingsbus:Consolidated2023-01-012023-12-3101901361core:MotorVehiclesbus:Consolidated2023-01-012023-12-3101901361core:CurrentFinancialInstrumentsbus:Consolidated2023-12-3101901361core:CurrentFinancialInstrumentsbus:Consolidated2022-12-3101901361core:Non-currentFinancialInstrumentsbus:Consolidated2023-12-3101901361core:Non-currentFinancialInstrumentsbus:Consolidated2022-12-3101901361core:Non-currentFinancialInstruments2023-12-3101901361core:Non-currentFinancialInstruments2022-12-3101901361core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2023-12-3101901361core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2022-12-3101901361core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3101901361core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3101901361core:WithinOneYearbus:Consolidated2023-12-3101901361core:WithinOneYearbus:Consolidated2022-12-3101901361core:WithinOneYear2023-12-3101901361core:WithinOneYear2022-12-3101901361core:BetweenTwoFiveYearsbus:Consolidated2023-12-3101901361core:BetweenTwoFiveYearsbus:Consolidated2022-12-3101901361core:BetweenTwoFiveYears2023-12-3101901361core:BetweenTwoFiveYears2022-12-3101901361bus:PrivateLimitedCompanyLtd2023-01-012023-12-3101901361bus:FRS1022023-01-012023-12-3101901361bus:Audited2023-01-012023-12-3101901361bus:ConsolidatedGroupCompanyAccounts2023-01-012023-12-3101901361bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP