The directors present the strategic report for the year ended 31 March 2024.
As the headline figures show, 2024 was another year of steady progress with group turnover up by 33.7% to £46,564,023. The gross profit percentage reduced slightly due to increased market competition, and overheads inevitably increased as staff numbers rose to deliver the higher volume.
The management and administrative structure is however now in place to cope with further increases in turnover which we anticipate in the forthcoming year, so we do not expect that scenario to be repeated.
Our subsidiary companies continued to contribute to the group profit, with the Loop 360 facilities management and aftercare business growing steadily. Loop Local turnover was lower than anticipated, due to significant delays to contracted works commencing on site. Overseas turnover however was much higher, with our market reach in Europe growing steadily through our established networks.
Overall the directors are happy to report a 48.5% increase in net profit to £919,229 post tax and now the goodwill amortisation is a thing of the past, there is a substantial increase in the balance sheet net current and total assets.
General inflation of material costs has continued, and whilst some supply chain delays have eased, certain items still necessitate long lead time procurement, which we advise clients of at a very early stage.
Despite global and national political upheaval, and the reported drop in staff attendance in central London due to post covid working from home, there appears to be an unending demand for high end office accommodation in London and the south east, often with the proposition that a prestige working environment is crucial to the client attracting and retaining quality staff who they require to be office based.
The CBIL Loan taken as a precaution in the covid pandemic has continued to be repaid over the agreed 5 year term which is the only source of external finance, and the directors loans are now fully repaid, so the solid financial base and agile management alert to any change in market conditions leaves us well placed for steady generic growth.
Our long established network of relationships with major landlords and real estate agencies continues to generate a healthy flow of new contract opportunities and our track record of quality and delivery has established Loop as one of the major players in the fit out market.
We have been, and expect to be, increasingly active in Europe with a number of contracts in the pipeline for 24/25, which together with plans for a significant push for our global roll out of smart building IT based facilities maintenance service offering, should build further growth and resilience in future years.
The contract delays that impacted Loop Local in the March 2024 accounts deferred income into the current year, and that, coupled with significant new contracts awarded, mean they are currently forecast to deliver a significantly higher turnover in March 25 accounts. Loop Interiors International is also forecasting steady growth on March 24 figures, so overall we expect another successful year.
Year Ended Year Ended
31 March 2024 31 March 2023
Turnover £47,672,526 £34,805,091
Gross Margin 20.7% 23.3%
EBITDA £1,288,348 £2,174,645
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ordinary dividends were paid by the group amounting to £360,000. The directors do not recommend payment of a further dividend.
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Loop Interiors International Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 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).
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 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.
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:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the 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.
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 group's and 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 group or parent company or to cease operations, or have no realistic alternative but to do so.
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent 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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
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 £868,755 (2023 - £449,316 loss).
Loop Interiors International Limited (“the company”) is a private limited company domiciled and incorporated in England & Wales. The registered office and trading address is 10 Stephen Mews, London, United Kingdom, W1T 1AG.
The group consists of Loop Interiors International Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated financial statements incorporate those of Loop Interiors International Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). All financial statements are made up to 31 March 2024.
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.
At the time of approving the financial statements, the directors have a reasonable expectation that the group and company has adequate resources to continue in operational existence for the foreseeable future and at least 12 months from the date of the approval of these financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised to the extent that it is probable that economic benefits will flow to the group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
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.
All of the company's financial assets and liabilities are basic and measured at amortised cost.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
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.
Long term contracts
Contracts in progress are assessed on a contract basis and are reflected in the profit or loss by recording turnover and related costs as contract activity progresses. Where the outcome of the uncompleted contract can be assessed with reasonable certainty the attributable profit is recognised in the profit or loss as an appropriate proportion of the estimated total profit of the contract. Cash received on account of contracts is deducted from amounts recoverable on contracts. Such amounts which have been received and exceed amounts recoverable are included in creditors. Where amounts recoverable exceed amounts received these have been included in debtors. A provision is made for anticipated losses on contracts. Movement in the provision for losses on contracts is included in cost of sales.
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.
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.
The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. Goodwill impairment reviews are also performed annually. These reviews require an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise for the cash generating unit and a suitable discount rate to calculate present value. See note 10 for the carrying amount of the intangible assets and note 1.5 for the useful economic life for the asset.
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 11 for the carrying amount of the property, plant and equipment and note 1.6 for the useful economic lives for each class of asset.
A key estimate in calculating the work in progress figure is the costs to complete a long term contract. This is calculated based upon a detailed budgeting process which is reviewed and updated where necessary as the contract progresses. The directors' experience and judgement is required when making this estimation.
On the whole, turnover is recognised as it is invoiced and where a long term contract is in the earlier stages and there is an agreement in place for the project to continue, the members will calculate how much of the turnover already billed is deemed to be a payment on account for future works.
Provisions have been made for work in progress recognised as accrued income. These provisions are estimates and the actual costs and timing of future cash flows are dependent on future events. The difference between expectations and the actual future liability will be accounted for in the period when such determination is made.
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year, retirement benefits were accruing to 7 (2023: 7) directors of the group in respect of defined contribution pension schemes.
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:
Details of the company's subsidiaries at 31 March 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The above subsidiary company, Loop 360 Limited has taken the exemption in section 479A of the Companies Act 2006 (the Act) from the requirements in the Act for their individual accounts to be audited. The guarantee given by the Company under section 479A of the Act is disclosed in Note 21.
Barclays Security Trustee Limited has a fixed and floating charge covering the assets of the company in relation to the CBILs loan.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
In order for the subsidiary company, Loop 360 Limited, referred to in Note 13, to take the audit exemption set out in section 479A of the Companies Act 2006, Loop Interiors International Limited has guaranteed all outstanding liabilities of the subsidiary company, Loop 360 Limited, at 31 March 2024 until those liabilities are satisfied in full.
Group Transactions:
At the year end, included in other creditors there is a balance of £33,900 (2023: £1,164,000) due to the shareholders, who are also the directors of the company.
At the year end, included in trade creditors of the group is a balance of £333,123 (2023: £71,654) due to Cirque Furniture Limited, a company under common control and ownership.
During the year the group invoiced management charges of £225,000 (2023: £180,000) and made purchases of £2,261,546 (2023: £499,298) on normal commercial terms from Cirque Furniture Limited.
Parent Company Transactions:
At the year end, included within trade debtors of the parent company is £16,422 (2023: £258,456) owed by Loop Local Limited, a subsidiary within the group.
At the year end, included within other creditors of the parent company is £358,950 (2023: £nil) owed to Loop Local Limited, a subsidiary within the group.
During the year, the parent company invoiced management charges of £156,000 (2023: £345,000) and made purchases of £1,522,350 (2023: £508,237) on normal commercial terms from Loop Local Limited.
At the year end, included within other debtors of the parent company is £125,289 (2023: £75,689) owed by Loop 360 Limited, a subsidiary within the group.
At the year end, included within trade creditors of the parent company is £13,913 (2023: £nil) owed to Loop 360 Limited, a subsidiary within the group.
During the year, the parent made purchases of £233,972 (2023: £9,343) on normal commercial terms from Loop 360 Limited.
Key management personnel is considered to be the directors only and their remuneration is disclosed in note 7.