Company Registration No. 02557017 (England and Wales)
BITUS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BITUS UK LIMITED
COMPANY INFORMATION
Directors
P A Marklund
N J McKillop
P O Nilsson
F Plomer
Company number
02557017
Registered office
Unit 9, Cirencester Office Park
Tetbury Road
Cirencester
Gloucestershire
GL7 6JJ
Auditor
Azets Audit Services
Globe House
Eclipse Park
Sittingbourne Road
Maidstone
Kent
ME14 3EN
BITUS UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
BITUS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business
Development and performance

As reported in the company's profit and loss account on page 9, turnover has decreased by £5,504,691 from £14,266,329 to £8,761,638. The company made an operating loss of £948,835, compared to the previous year's operating loss of £1,232,237. The loss for the year before tax of £878,942 compares to a pre-tax loss of £1,246,411 for the year ended 31 December 2022.

 

The company has adequate financial arrangements to meet the obligations of its commitments to other group companies, customers, and suppliers.

 

The Directors consider that the result is unsatisfactory, but in line with expectations due to market conditions.

 

The company suffered from continuing falling demand within the commodity products area. Sadly the garden season did not materialise to the levels we had anticipated which had an adverse effect on our results.

 

We introduced a new range of high quality claddings in co-operation with our sister company Bitus AB and this is proving very popular. Our industrial business has declined due to the current economic conditions and the impact on retail purchases, but overall, this business area remains positive.

 

Our business will continue to adapt and change in light of market conditions and the organisation is well placed to manage the challenges ahead.

Key performance indicators

The KPIs used to determine the progress and performance of the company are set out below:

 

Turnover

 

Turnover has decreased by 38.6% compared to the previous year as a result of unfavourable market conditions.

 

Gross profit margin

 

The company's gross profit margin increased in the year under review from 1.3% to 5.0%.

BITUS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Management continually monitor the key risks facing the company, together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least annually.

 

The principal risks and uncertainties facing the company are as follows:

 

 

 

On behalf of the board

N J McKillop
Director
21 August 2024
BITUS UK LIMITED
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 activity

The principal activity of the company continued to be that of the importation and distribution of timber products.

Directors

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

P A Marklund
S W McIntyre
(Resigned 1 February 2024)
N J McKillop
P O Nilsson
F Plomer
Results and dividends

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

No ordinary dividends were paid. The directors recommend payment of a final dividend amounting to £420,000.

Financial instruments

The company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.

Future developments

The company has changed its strategic direction by focusing more on added value ranges and products. We plan to increase our sales in the areas of wood protection and garden range products during the coming years with less focus on commodity products.

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

Disclosure in the Directors' Report

As permitted by paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 certain notes which are required to be disclosed in the directors’ report have been omitted and they are included in the Strategic Report on pages 1 to 2. These notes relate to the review and analysis of business during the current year.

BITUS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Going concern

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt a going concern basis in preparing the annual financial statements.

 

Further details regarding the adoption of the going concern basis can be found in note 1.2 to the financial statements.

On behalf of the board
N J McKillop
Director
21 August 2024
BITUS UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

 

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

BITUS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BITUS UK LIMITED
- 6 -
Opinion

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

In our opinion the financial statements:

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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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:

BITUS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BITUS UK LIMITED
- 7 -
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.

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.

BITUS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BITUS UK LIMITED
- 8 -

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Daniel Graves BA(Hons) FCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
22 August 2024
2024-08-22
Chartered Accountants
Statutory Auditor
Globe House
Eclipse Park
Sittingbourne Road
Maidstone
Kent
United Kingdom
ME14 3EN
BITUS UK LIMITED
STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
8,761,638
14,266,329
Cost of sales
(8,320,053)
(14,084,186)
Gross profit
441,585
182,143
Distribution costs
(192,793)
(169,698)
Administrative expenses
(1,261,228)
(1,260,614)
Other operating income
63,601
98,912
Exceptional item
4
-
0
(82,980)
Operating loss before interest
5
(948,835)
(1,232,237)
Interest receivable and similar income
8
120,053
57,864
Interest payable and similar expenses
9
(50,160)
(72,038)
Loss before taxation
(878,942)
(1,246,411)
Taxation
10
205,802
234,026
Loss for the financial year
(673,140)
(1,012,385)
Total comprehensive income for the year
(673,140)
(1,012,385)

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

BITUS UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
146,745
151,333
Current assets
Stocks
13
3,091,710
5,321,666
Debtors
14
2,617,971
2,851,979
5,709,681
8,173,645
Creditors: amounts falling due within one year
15
(629,872)
(2,343,814)
Net current assets
5,079,809
5,829,831
Total assets less current liabilities
5,226,554
5,981,164
Creditors: amounts falling due after more than one year
16
(342,555)
(432,555)
Provisions for liabilities
Deferred tax liability
18
8,530
-
0
(8,530)
-
Net assets
4,875,469
5,548,609
Capital and reserves
Called up share capital
20
60,000
60,000
Profit and loss reserves
4,815,469
5,488,609
Total equity
4,875,469
5,548,609
The financial statements were approved by the board of directors and authorised for issue on 21 August 2024 and are signed on its behalf by:
N J McKillop
Director
Company Registration No. 02557017
BITUS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
60,000
6,500,994
6,560,994
Period ended 31 December 2022:
Loss and total comprehensive income for the year
-
(1,012,385)
(1,012,385)
Balance at 31 December 2022
60,000
5,488,609
5,548,609
Period ended 31 December 2023:
Loss and total comprehensive income for the year
-
(673,140)
(673,140)
Balance at 31 December 2023
60,000
4,815,469
4,875,469
BITUS UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
27
(323,655)
821,997
Interest paid
(50,160)
(72,038)
Income taxes refunded/(paid)
386,827
(614,994)
Net cash inflow from operating activities
13,012
134,965
Investing activities
Purchase of tangible fixed assets
(58,065)
(130,746)
Proceeds on disposal of tangible fixed assets
15,000
26,215
Interest received
120,053
57,864
Net cash generated from/(used in) investing activities
76,988
(46,667)
Financing activities
Repayment of borrowings
(90,000)
(90,000)
Net cash used in financing activities
(90,000)
(90,000)
Net increase/(decrease) in cash and cash equivalents
-
0
(1,702)
Cash and cash equivalents at beginning of year
-
0
1,702
Cash and cash equivalents at end of year
-
0
-
0
BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Bergs Timber (UK) Limited (the 'company') is a private company limited by shares incorporated in England and Wales. Its principal place of business is Baltic Wharf, Rochford, SS4 2HA.

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 £1.

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

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

Despite the company incurring a loss of £673,140 during the year ended 31 December 2023, as of that date, total assets exceed current liabilities by £5,226,554, and the directors have received assurances that the support already given by the intermediate parent, Bergs Timber AB, of £74,199 (note 15) will remain in place for at least twelve months from the date of approval of these financial statements.

 

As a consequence of these factors and other evidence available to the directors in respect of the company's trading prospects, the directors are satisfied that the company has sufficient resources to meet its liabilities as they fall due for a period of at least twelve months from the date of signing of these financial statements. Accordingly, the financial statements are prepared on a going concern basis and do not include any adjustments which would be necessary if this basis of preparation was inappropriate.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods 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 from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
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:

Equipment, fixtures and fittings
15% reducing balance / 20% and 33.3% straight line
Motor vehicles
25% 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.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of fixed assets

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

 

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

1.6
Stocks

Stocks are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, those overheads that have been incurred in bringing the stocks to their present location and condition.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

 

The value of slow-moving and obsolete stock is considered by the directors at the end of each year and as a result the financial statements include a stock provision to take account of the estimated reduction in value.

1.7
Cash and cash equivalents

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

1.8
Financial instruments

The company applies 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.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Other financial assets

Other financial assets, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets 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. 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.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities are initially measured at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Other financial liabilities

Other financial liabilities, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

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

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.10
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.11
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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

 

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

1.12
Employee benefits

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

 

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

 

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

1.13
Retirement benefits

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

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.14
Leases

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.

1.15
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

In the application of the 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 critical judgements that the directors have made in the process of applying the company's policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no material indicators of impairments identified during the current financial year other than in respect of bad and doubtful trade debtor balances recognised in the financial statements and loans to a group undertaking.

Provision against the value of stock

As indicated in note 1.6 the value of slow-moving and obsolete stock is considered by the directors at the end of each year. Based on their estimate of net realisable value a provision against the carrying value of stock is recognised.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimating value in use

Where an indication of impairment exists the directors will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.

Recoverability of receivables

The company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience of recoverability, and the credit profile of individual or groups of customers.

Determining residual values and useful economic lives of tangible fixed assets (property, plant and equipment)

The company depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

 

Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices.

3
Turnover

An analysis of the company's turnover by geographical market is as follows:

2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
8,719,078
14,142,681
Channel Islands
25,862
25,862
Rest of the World
16,698
97,786
8,761,638
14,266,329
4
Exceptional costs/(income)
2023
2022
£
£
Exceptional redundancy costs
-
82,980

Exceptional costs reflect prior year redundancy costs which management consider to be of a material level, and therefore which are separately disclosed.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Operating (loss)/profit
2023
2022
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange (gains)/losses
(4,102)
(1,949)
Fees payable to the company's auditors for the audit of the company's financial statements
29,000
28,600
Non audit remuneration paid to auditors
9,066
6,901
Depreciation of owned tangible fixed assets
60,312
51,143
Profit on disposal of tangible fixed assets
(12,659)
(12,023)
Cost of Stocks recognised as an expense
8,320,053
14,084,186
Operating lease charges
143,461
43,743
6
Employees

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

2023
2022
Number
Number
Administration
4
6
Sales
6
7
Total
10
13

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
693,254
749,284
Social security costs
86,714
102,554
Pension costs
62,986
68,017
842,954
919,855
BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
278,028
292,895
Company pension contributions to defined contribution schemes
28,773
29,126
306,801
322,021

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

 

No directors exercised share options during the year (2022: nil); nor were any directors entitled to receive shares under long term incentive schemes during the year (2022: nil).

Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
177,137
192,713
Company pension contributions to defined contribution schemes
20,200
19,798
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
103,634
57,864
Other interest income
16,419
-
0
Total income
120,053
57,864

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
120,053
57,864
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
19,094
46,590
Interest payable to group undertakings
31,066
21,423
50,160
68,013
Other finance costs:
Other interest
-
0
4,025
50,160
72,038
BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
-
0
(251,727)
Group tax relief
(214,895)
-
0
Total current tax
(214,895)
(251,727)
Deferred tax
Origination and reversal of timing differences
9,093
17,701
Total tax credit
(205,802)
(234,026)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(878,942)
(1,246,411)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(206,727)
(236,818)
Tax effect of expenses that are not deductible in determining taxable profit
405
274
Under/(over) provided in prior years
-
0
100
Remeasurement of deferred tax for changes in tax rate
534
4,248
Effect of enhanced 130% capital allowances
(14)
(1,830)
Taxation for the year
(205,802)
(234,026)
BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
11
Tangible fixed assets
Equipment, fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 January 2023
121,859
209,660
331,519
Additions
5,115
52,950
58,065
Disposals
-
0
(37,450)
(37,450)
At 31 December 2023
126,974
225,160
352,134
Depreciation and impairment
At 1 January 2023
90,790
89,396
180,186
Depreciation charged in the year
10,813
49,499
60,312
Eliminated in respect of disposals
-
0
(35,109)
(35,109)
At 31 December 2023
101,603
103,786
205,389
Carrying amount
At 31 December 2023
25,371
121,374
146,745
At 31 December 2022
31,069
120,264
151,333
12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,519,986
2,241,945
Carrying amount of financial liabilities
Measured at amortised cost
983,301
2,282,479
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,091,710
5,321,666
BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
777,573
1,173,837
Corporation tax recoverable
-
0
386,827
Amounts due from group undertakings
1,741,721
1,064,294
Other debtors
692
2,112
Prepayments and accrued income
97,985
224,346
2,617,971
2,851,416
Amounts falling due after one year:
Deferred tax asset (see note 18)
-
0
563
Total debtors
2,617,971
2,851,979
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Loans and overdrafts
17
90,000
90,000
Other taxation and social security
79,126
583,890
Trade creditors
249,898
260,814
Amounts due to group undertakings
80,429
1,172,007
Other creditors
68,915
142,711
Accruals and deferred income
61,504
94,392
629,872
2,343,814
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Loans and overdrafts
17
342,555
432,555
BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
17
Loans and overdrafts
2023
2022
£
£
Loans from fellow group undertakings
432,555
522,555
Payable within one year
90,000
90,000
Payable after one year
342,555
432,555

The group loan is unsecured is designated in GBP. It is repayable over 3 years from 29 January 2022 by capital instalments of £22,500 per quarter and bears interest at 1.80%, with a final repayment due on the date of maturity.

18
Deferred taxation

Deferred tax assets and liabilities are offset where the 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
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Fixed asset timing differences
8,530
-
-
563
2023
Movements in the year:
£
(Asset) at 1 January 2023
(563)
Charge to profit or loss
9,093
Liability at 31 December 2023
8,530

The deferred tax asset set out above is calculated at 25% (2022: 25%) and is expected to reverse after more than one year.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
62,986
68,017

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. Contributions totalling £10,492 (2022: £8,402) were payable to the fund at the balance sheet date and are included within accruals and deferred income.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
60,000
60,000
60,000
60,000
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:

2023
2022
£
£
Within one year
145,640
21,320
Between two and five years
2,163
4,130
147,803
25,450

A total of £42,528 (2022: £46,230) was recognised as an operating lease expense in the year.

22
Financial commitments, guarantees and contingent liabilities

In January 2022, Bergs Timber AB signed an agreement with Danske Bank and SEB as creditors on the refinancing of the bulk of the group’s existing loans. The new credit facilities totalling SEK 650 million have a three-year maturity and encompass one term loan totalling SEK 250 million and a revolving credit facility of SEK 400 million. At the end of 2022, the option to extend the facilities by one year to January 2026 was exercised. In addition to these credit facilities, the Bergs Timber AB Group has an overdraft facility of SEK 50 million with Danske Bank. The loan agreement contains the customary obligations, such as the one limiting the scope for action for Bergs Timber AB (publ) regarding pledging of assets, raising loans or issuing securities, selling or transferring assets, acquisitions and merging or consolidating operations with another company. In contrast to the Bergs Timber AB Group’s existing loans, the new loan agreement is non-guaranteed and in general involves better terms for the Group.

 

The company had a commitment in respect of a service and support agreement to make monthly payments until October 2026, with an overall commitment at the balance sheet date of £23,041 (2022: £31,996).

23
Events after the reporting date

Subsequent to the year end, Group management have decided to commence a restructuring project. This will entail a change in market focus of the company, and will likely lead to a reduction in revenue in subsequent years, although currently the effects of this cannot be quantified.

 

The restructuring project will also involve staff redundancies being made, with management provisionally estimating the costs of redundancies at £67,000, and it is anticipated that stock held will be reduced to c.£800,000.

 

Aside from this event, the Directors have not become aware of any significant matter or circumstances that has arisen since 31 December 2023, that has affected or may affect the operations of the entity, the results of those operations, or the state of affairs of the Company in subsequent years which has not been covered off in this report.

BITUS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
24
Related party transactions

Bergs Timber AB prepares group financial statements and copies can be obtained from Bergs väg 13, SE-570 84, Mörlunda, Sweden. Accordingly the company has taken advantage of the exemptions available in paragraph 33.1A of FRS102 not to make disclosures concerning group related party transactions.

 

The balances due from and to group undertakings are disclosed in notes 14, 15 & 16.

 

Key management personnel remuneration is equal to that of the directors, as per note 7.

25
Ultimate controlling party

The immediate parent company is Continental Wood Limited, a company registered in England, and the intermediate parent company is Bergs Timber AB, a company registered in Sweden, which was previously the ultimate parent company.

 

From 29 November 2023 the ultimate parent company is Norvik hf., a company registered in Iceland. Norvik hf forms the smallest and largest group for which group accounts are prepared and of which the company is a member. The registered office of Norvik hf. is Vallakor 4, 203 Koubavogira (Kopavogur), Iceland.

26
Change of company name

On 9 October 2023, the company changed name from Bergs Timber (UK) Limited to Bitus UK Limited.

27
Cash generated from operations
2023
2022
£
£
Loss for the year after tax
(673,140)
(1,012,385)
Adjustments for:
Taxation credited
(205,802)
(234,026)
Finance costs
50,160
72,038
Investment income
(120,053)
(57,864)
Gain on disposal of tangible fixed assets
(12,659)
(12,023)
Depreciation and impairment of tangible fixed assets
60,312
51,143
Movements in working capital:
Decrease in stocks
2,229,956
3,668,704
Decrease in debtors
61,513
1,756,029
(Decrease) in creditors
(1,713,942)
(3,409,619)
Cash (absorbed by)/generated from operations
(323,655)
821,997
28
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Borrowings excluding overdrafts
(522,555)
90,000
(432,555)
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