Company registration number 03627393 (England and Wales)
THORNCLIFFE BUILDING SUPPLIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
THORNCLIFFE BUILDING SUPPLIES LIMITED
COMPANY INFORMATION
Directors
Mr T Harper
Mr P Pierce
Mr J Newman
Mrs D Harper
Mr J Monks
Secretary
Mr J Newman
Company number
03627393
Registered office
Allt Y Graig
Meliden Road
Dyserth
Denbighshire
United Kingdom
LL18 6DE
Auditor
Mitchell Charlesworth (Audit) Limited
24 Nicholas Street
Chester
CH1 2AU
THORNCLIFFE BUILDING SUPPLIES LIMITED
CONTENTS
Page
Strategic report
1 - 6
Directors' report
7 - 9
Independent auditor's report
10 - 13
Statement of comprehensive income
14
Balance sheet
15
Statement of changes in equity
16
Statement of cash flows
17
Notes to the financial statements
18 - 36
THORNCLIFFE BUILDING SUPPLIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Established in 1987, Thorncliffe Building Supplies has grown to become North Wales’s leading builders’ merchants and has been named in the London Stock Exchange’s list of 1,000 Companies to Inspire Britain. With retail sites in Dyserth, Mold and Abergele, Thorncliffe has been recognised as one of the fastest growing small and medium sized businesses in the UK.
The company has grown considerably to become a brand renowned for quality products and outstanding customer care.
Thorncliffe Building Supplies operates a thriving builders’ merchants across two sites in Dyserth and Ewloe. It stocks an extensive choice of building, timber and landscaping supplies, including general products and specialist items, from leading manufacturers. The company also manages skip hire divisions in Ewloe and Abergele, and a licensed, state-of-the-art waste management and recycling facility.
Review of the business
The principal activity of the company remains that of a Builders Merchant, along with a Waste Management division.
The company's aim is to be the leading local provider in the locations mentioned and surrounding areas, the builder merchants service trade and retail customers and prides itself on its reputation for providing outstanding customer care. There is an established history of investment in all areas of the business, and this has continued into 2023 with significant investment in staff, facilities, equipment and stock made in this year.
The Directors Strategic report for the year ending 31 December 2022 reported that the proportion of Waste Operation Turnover amounted to 39% of the Total Turnover of the company due to the renewal of contracts with Local Councils for the reception and bulking of Residual Waste.
The Directors report that the proportion has increased from 39% for the year to 31 December 2022 to 41% in the year to 31 December 2023. This is a result of increased turnover of £0.2 Million in the Waste arm of the Business.
THORNCLIFFE BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties
The company identifies and manages risk on an ongoing basis. The risks are discussed at Directors meetings and appropriate action taken where necessary.
In addition to the finance risks noted, below the Company considers the following risks which could materially affect the Company's ongoing operations:
Health and safety - The very nature of the industry means this remains a significant and inherent risk. Thorncliffe Building Supplies Ltd is committed to keeping people, customers and the general public safe. Risk assessments are completed regularly and method statements for each area of the business are identified and communicated to the staff. Training, investment alongside continual development ensures that this risk is continually being reassessed and monitored. This also ensures the risk assessments and method statements are followed; all incidents are monitored, and corrective action is taken immediately if necessary. The prevention of incidents, accidents and ultimately loss of life remains a priority for the Company.
Changes in government policy and legal and regulatory compliance - Thorncliffe Building Supplies operates in a highly regulated industry and sector and any changes in Government policy remains a significant risk; this along with the risk of breaching environmental and legal compliance. The company regularly reviews compliance and has a very experienced team, supported by external advisors where necessary, that monitor compliance and set procedures. These policies and procedures are monitored on a regular basis.
Strategic Initiatives - the Company remains at risk if key strategic initiatives, such as business transformation, commercial projects and system developments fail. Business transformation covers the review of processes, reducing carbon emissions, a review of products and services, the need to respond to the changing needs of our customers etc. Commercial projects cover the risk of not being able to find and secure suitable sites for expansion and our systems are always being reviewed to ensure the most suitable processes and procedures along with IT requirements are implemented.
The Company manages these risks in a number of ways, including Board and Management meetings, leadership and engagement across the whole company, facilitating excellent links with external advisors and the use of industry specific software and IT.
Financial risk - the Company uses various financial instruments - these include loans, factoring agreements, hire purchase agreements, cash and standard working capital instruments such as debtors and creditors. The instruments are used to both facilitate the day-to-day operations and to support the key strategic initiatives. The Directors are aware of the need to review all aspects of financial risk and outline these below:
Credit risk - The Company's main risk in terms of working capital are cash, stock and trade debtors. The risk from cash is limited and stock levels are constantly monitored. The main credit risk is therefore trade debtors. In order to manage this risk strict policies and procedures are in place regarding the use of credit and these are regularly reviewed and monitored.
THORNCLIFFE BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Development and performance
The Directors are pleased to report another successful year with an increase in turnover from £42.2 Million in 2022 to £43.1 Million in 2023 producing a satisfactory profit before taxation of £0.53 Million.
Key factors in the increase in turnover:
Building Supplies Division
The Directors announce that the company continues to capture its share of the building materials market, the Builders Merchant arm of the business has seen a slight increase in turnover from £24.6 Million in 2022 to £25.3 Million in 2023.
Thorncliffe’s policy of improvement of their sites has continued and has provided further investment in Plant,
Machinery and Timber Storage areas to provide a professional service in a customer friendly environment.
Upgrading of its Transport Fleet and Computer systems to enable an efficient cost effective service and live
reporting to both Management and Customers continues.
The Turnover of the concreting plant in Bodelwyddan remains and was £3 Million.
Waste Division
The Skip hire and waste disposal divisions have increased Turnover by 1.3% from £17.5 Million in 2022 to £17.8
Million in 2023.
Recycling developments continue and a restructuring of both Waste sites enabled the company to be more energy
efficient and commercially viable whilst providing a safe working environment for the staff.
In 2023 a Picking line and sorting process was introduced in Abergele.
The Refuse Derived Fuel Processing Income in Abergele and Ewloe has decreased from £0.5 million 2022 to £0.4
million 2023.
Future Developments
Developments and innovations in both arms of the business ensuring the company maintains its market position
continue to be monitored.
Key performance indicators
The gross profit percentage of the company for the year ended 31 December 2023 remains stable at 35.6% (2022 - 35%)
Net profit before taxation has decreased from 3.42% in 2022 to 1.24% in 2023. This reflects the increased costs in wages, repairs and depreciation. Depreciation has risen due to increased investment in new plant and equipment.
THORNCLIFFE BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Section 172(1) statement
Long term decisions
The Directors of the Company, in line with their duties under s172 of the Companies Act 2006 act in a way that they consider, in good faith, would be most likely to promote the long-term success for the Company, its members.
The Company remains predominantly a family owned and managed business and has a long-term track record of achieving growth and more lately looking at renewables as way to continually strive to reduce its effect on the environment.
Over the past sixteen years the company has expanded from Dyserth and Abergele to Ewloe and has continually invested in these sites and acquired new businesses that has expanded the footprint of the Ewloe site.
The Company has a clear strategy of expanding through the acquisition of businesses', the new businesses are hived up and the trade and assets incorporated into Thorncliffe Building Supplies Ltd. The acquired subsidiary is then made dormant.
A major capital investment programme was undertaken in 2023 alongside the investment of biomass heating systems and solar panels. In addition, Morris Garden Machinery Limited was acquired and redeveloped with continued development undertaken across all sites to improve the customer experience this was alongside a full review, and investment where required, of the motor vehicles and plant.
The Directors make such investment decisions with a predominantly long-term view to take into account the Company's strategic objectives regarding growth, acquisitions and return on investment. The Board are also mindful to consider all stakeholder interests.
The Company is mindful of the changing market, the environmental impacts are a cause for particular concern and how important it is to continually look for new ways of recycling and reducing the carbon footprint of the business.
THORNCLIFFE BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Relationships with employees, suppliers, customers and others
The Company's success and reputation has been built around the quality of its products and services and the outstanding levels of customer care provided, this cannot be achieved without the commitment and dedication of the employees.
The Directors engage directly with the employees of the business and take a very hands-on approach. This approach runs across the whole Board of Directors and can be seen through their day-to-day activities. The Directors and management team are fully engaged with the employees via emails, newsletters, engagement surveys, team building activities and other events.
Thorncliffe Building Supplies has an open culture with Directors that are approachable and known to all the employees. The Company is fully committed to working with employees in order to ensure they reach their potential and the criteria for recruitment, promotion, training etc, is based on performance and ability.
To be able to fulfil their s172 duty it is essential that the Directors understand what matters to the Company's stakeholders, much of the stakeholder engagement is carried out at a business level and the Company is heavily involved with supporting communities including local charities as much as possible. The company has a long and established record of supporting local charities and in particular the local hospice, St Kentigerns we also sponsor local rubgy and football teams.
Customers
Providing outstanding customer service is key to our success and we have a high level of customer satisfaction. We have a strong presence on social media and seek to engage with customers where appropriate. We are proud to have many long-lasting relationships with our customers and are always keen to receive feedback on how their experience can be improved.
Suppliers
As with our customers we are proud to work with local and national customers and have a track record of building strong relationships with our suppliers. They too are critical to our success, and we value these relationships highly. The importance of this can be demonstrated by reflecting on the COVID 19 epidemic as when materials became scarce the quality of these relationships allowed us to continue to grow and source products for sale, when it was difficult to obtain some products. Our key focus has always been on quality and ensuring fairness is spread across the supply chain.
Community and the environment
The Directors remain committed to the community and the environment. Sustainability is one of the fundamental elements of the business model and the Company is committed to doing the right thing by the community and inevitably the planet. Recycling is a key component of the business, and the Company is looking into its carbon emissions and investigating new ways to treat waste and reduce the effect it has on the environment.
Minimising the carbon footprint of the business will deliver the most environmental, social and financial value from the resources that are collected as part of the waste division but also spreads across the products that are sold. It is intrinsic to the whole business; the Directors fully acknowledge its corporate responsibilities in this field.
This also has a broader impact on the local community in the areas Thorncliffe Building Supplies operate in the environmental impact remains connected and intrinsically linked to the effect on the local community. The Directors always consider the impact of the business on local communities and support local activities and charities wherever possible.
Reputation and acting fairly
The directors are aware that adhering to the high standards upon which the Companys reputation is founded is critical to the business. They strive to maintain excellent standards of corporate governance and ethical behavior. They have policies and procedures in place to ensure ongoing compliance, and continuous improvement with legal and regulatory requirements.
The directors are committed to promoting the success of the company while considering the impact of their decisions on all stakeholders. They believe that their approach aligns with the company values and strategic objectives, ensuring sustainable growth and value creation for all members.
THORNCLIFFE BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Mr T Harper
Director
29 August 2024
THORNCLIFFE BUILDING SUPPLIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of a builder merchant and provider of waste management services.
Results and dividends
The results for the year are set out on page 14.
Ordinary dividends were paid amounting to £150,000. 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 T Harper
Mr P Pierce
Mr J Newman
Mrs D Harper
Mr J Monks
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company’s policy is to consult and discuss with employees through regular HR “time to talk” sessions and at meetings, matters likely to affect employees interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Business relationships
For information on stakeholder relationships and engagement, see the Section 172 (1) statement within the strategic report.
Future developments
The Company has a policy of being a one stop shop for customers and maintains this policy by constantly looking for ways to develop its market share.
The Directors continue to monitor the activity of both the waste transfer and builders merchant divisions at Abergele, Ewloe and Dyserth to maximise the productivity of the sites, with continued redevelopment of the sites.
The Directors foresee continued growth over the next 12 months in both divisions.
Auditor
Mitchell Charlesworth (Audit) Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006.
THORNCLIFFE BUILDING SUPPLIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Energy and carbon report
2023
Energy consumption
kWh
Aggregate of energy consumption in the year
- Electricity purchased
626,376
- Fuel consumed for transport
9,644,015
10,270,391
2023
Emissions of CO2 equivalent
metric tonnes
Scope 1 - direct emissions
- Gas combustion
-
- Fuel consumed for owned transport
2,585.37
2,585.37
Scope 2 - indirect emissions
- Electricity purchased
129.69
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
-
Total gross emissions
2,715.06
Intensity ratio
Tonnes of CO2e per total £m sales revenue
63.01
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2024 UK Government’s Conversion Factors for Company Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m of sales revenue, the recommended ratio for the sector.
Measures taken to improve energy efficiency
The business continues to review areas where energy usage can be reduced to create savings and become greener. This includes the installation of solar panels, heat pumps and use of Ofgem accredited renewable boilers.
THORNCLIFFE BUILDING SUPPLIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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 financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr T Harper
Director
29 August 2024
THORNCLIFFE BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THORNCLIFFE BUILDING SUPPLIES LIMITED
- 10 -
Opinion
We have audited the financial statements of Thorncliffe Building Supplies 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:
give a true and fair view of the state of the 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 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.
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.
THORNCLIFFE BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THORNCLIFFE BUILDING SUPPLIES LIMITED
- 11 -
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
the nature of the industry and sector, control environment and business performance;
the company’s own assessment of the risks that irregularities may occur either as a result of fraud or error;
the results of our enquiries of management and directors of their own identification and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
THORNCLIFFE BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THORNCLIFFE BUILDING SUPPLIES LIMITED
- 12 -
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
The company's accounting policy for revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. This includes regulations concerning health and safety, waste management and employment laws.
As a result of performing the above, we identified income recognition, override of controls and adherence to laws and regulations as the key audit matters related to the potential risk of fraud.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations described above as having a direct effect on the financial statements;
enquiring of management and directors concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
In common with all audits under ISAs (UK) we are required to perform specific procedures to respond to the risk of management override.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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.
THORNCLIFFE BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THORNCLIFFE BUILDING SUPPLIES LIMITED
- 13 -
Robert Hall
Senior Statutory Auditor
For and on behalf of Mitchell Charlesworth (Audit) Limited
Accountants
Statutory Auditor
24 Nicholas Street
Chester
CH1 2AU
THORNCLIFFE BUILDING SUPPLIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
Turnover
3
43,085,263
42,155,356
Cost of sales
(27,725,798)
(27,403,865)
Gross profit
15,359,465
14,751,491
Administrative expenses
(15,251,757)
(13,314,919)
Other operating income
438,818
225,220
Operating profit
4
546,526
1,661,792
Interest receivable and similar income
8
502,682
8,278
Interest payable and similar expenses
9
(515,023)
(229,124)
Profit before taxation
534,185
1,440,946
Tax on profit
10
244,414
(757,516)
Profit for the financial year
778,599
683,430
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THORNCLIFFE BUILDING SUPPLIES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 15 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
13
240,562
317,859
Other intangible assets
13
14,000
Total intangible assets
254,562
317,859
Tangible assets
14
17,825,999
17,803,899
Investments
15
110,630
507,243
18,191,191
18,629,001
Current assets
Stocks
17
4,774,214
4,411,094
Debtors
18
4,671,094
4,578,034
Cash at bank and in hand
14,996
3,396
9,460,304
8,992,524
Creditors: amounts falling due within one year
19
(8,597,941)
(10,945,950)
Net current assets/(liabilities)
862,363
(1,953,426)
Total assets less current liabilities
19,053,554
16,675,575
Creditors: amounts falling due after more than one year
20
(4,674,527)
(2,680,733)
Provisions for liabilities
Deferred tax liability
23
1,483,648
1,728,062
(1,483,648)
(1,728,062)
Net assets
12,895,379
12,266,780
Capital and reserves
Called up share capital
25
1,000
1,000
Profit and loss reserves
12,894,379
12,265,780
Total equity
12,895,379
12,266,780
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr T Harper
Director
Company registration number 03627393 (England and Wales)
THORNCLIFFE BUILDING SUPPLIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
1,000
11,782,350
11,783,350
Year ended 31 December 2022:
Profit and total comprehensive income
-
683,430
683,430
Dividends
11
-
(200,000)
(200,000)
Balance at 31 December 2022
1,000
12,265,780
12,266,780
Year ended 31 December 2023:
Profit and total comprehensive income
-
778,599
778,599
Dividends
11
-
(150,000)
(150,000)
Balance at 31 December 2023
1,000
12,894,379
12,895,379
THORNCLIFFE BUILDING SUPPLIES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
2,841,109
3,567,051
Income taxes refunded/(paid)
207,988
(1,919)
Net cash inflow from operating activities
3,049,097
3,565,132
Investing activities
Purchase of intangible assets
(15,000)
(150,000)
Purchase of tangible fixed assets
(1,927,443)
(2,658,922)
Proceeds from disposal of tangible fixed assets
458,409
600,422
Purchase of subsidiaries
(100,530)
Interest received
5,539
8,278
Dividends received
497,143
Net cash used in investing activities
(1,081,882)
(2,200,222)
Financing activities
Repayment of borrowings
421,432
805,224
Repayment of bank loans
(280,417)
(326,426)
Payment of finance leases obligations
(1,429,897)
(2,287,229)
Interest paid
(515,023)
(229,124)
Dividends paid
(150,000)
(200,000)
Net cash used in financing activities
(1,953,905)
(2,237,555)
Net increase/(decrease) in cash and cash equivalents
13,310
(872,645)
Cash and cash equivalents at beginning of year
1,686
874,331
Cash and cash equivalents at end of year
14,996
1,686
Relating to:
Cash at bank and in hand
14,996
3,396
Bank overdrafts included in creditors payable within one year
(1,710)
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
1
Accounting policies
Company information
Thorncliffe Building Supplies Limited is a private company limited by shares incorporated in England and Wales. The registered office is Allt Y Graig, Meliden Road, Dyserth, Denbighshire, United Kingdom, LL18 6DE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that all of its subsidiary undertakings could be excluded from consolidation in Companies Act group accounts.
The financial statements present information about the company as an individual entity and not about its group.
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.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue 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
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents & licences
10% straight line
1.6
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:
Freehold land and buildings
10% reducing balance
Leasehold land and buildings
10% reducing balance
Plant and equipment
20% reducing balance
Fixtures and fittings
20% reducing balance
Motor vehicles
25% reducing balance
Company cars
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. 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 company. 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 company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
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, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
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) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
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.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, 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, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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, 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.12
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.
1.13
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 tax 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.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
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.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Building Supplies
25,327,027
24,633,488
Waste Income
17,758,236
17,521,868
43,085,263
42,155,356
2023
2022
£
£
Other revenue
Interest income
5,539
8,278
Dividends received
497,143
-
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
2,929,260
2,513,378
Profit on disposal of tangible fixed assets
(8,030)
(143,590)
Amortisation of intangible assets
78,297
67,296
Operating lease charges
5,393
10,850
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 company
15,000
12,250
For other services
All other non-audit services
34,229
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Managerial and administrative
46
24
Drivers
97
94
Sales
15
20
Yard
106
112
Total
264
250
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
7,714,111
7,041,681
Social security costs
718,953
686,128
Pension costs
301,113
406,545
8,734,177
8,134,354
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
382,547
376,020
Company pension contributions to defined contribution schemes
7,925
15,925
390,472
391,945
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 5).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
120,450
125,171
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
5,539
8,278
Income from fixed asset investments
Income from shares in group undertakings
497,143
Total income
502,682
8,278
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
304,642
107,422
Other finance costs:
Interest on finance leases and hire purchase contracts
210,381
121,702
515,023
229,124
10
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
229,728
451,028
Changes in tax rates
306,488
Adjustment in respect of prior periods
(474,142)
Total deferred tax
(244,414)
757,516
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 26 -
The actual (credit)/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
534,185
1,440,946
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
125,640
273,780
Tax effect of expenses that are not deductible in determining taxable profit
30,540
14,382
Gains not taxable
1,204
Effect of change in corporation tax rate
13,594
300,941
Permanent capital allowances in excess of depreciation
60,171
(166,405)
Other permanent differences
(1,424)
Deferred tax adjustments in respect of prior years
(474,142)
Tax at marginal rate
3
Deferred tax on short term timing difference
8,453
Deferred tax on super deducted assets
465,697
Unrecognised defferred tax movement
(139,332)
Taxation (credit)/charge for the year
(244,414)
757,516
11
Dividends
2023
2022
£
£
Interim paid
150,000
200,000
12
Impairment
£497,143 (2022 - £Nil) of impairment losses are recognised in administration expenses in the profit and loss account.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
13
Intangible fixed assets
Goodwill
Patents & licences
Total
£
£
£
Cost
At 1 January 2023
876,158
876,158
Additions
15,000
15,000
At 31 December 2023
876,158
15,000
891,158
Amortisation and impairment
At 1 January 2023
558,299
558,299
Amortisation charged for the year
77,297
1,000
78,297
At 31 December 2023
635,596
1,000
636,596
Carrying amount
At 31 December 2023
240,562
14,000
254,562
At 31 December 2022
317,859
317,859
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
14
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Company cars
Total
£
£
£
£
£
£
£
Cost or valuation
At 1 January 2023
1,250,000
7,817,822
13,313,731
621,946
6,891,285
118,150
30,012,934
Additions
252,913
353,414
2,041,030
36,098
718,284
3,401,739
Disposals
(2,057)
(1,253,537)
(3,458)
(709,180)
(1,968,232)
Transfers
4,063,807
(4,063,807)
At 31 December 2023
5,566,720
4,105,372
14,101,224
654,586
6,900,389
118,150
31,446,441
Depreciation and impairment
At 1 January 2023
407,094
1,387,122
6,524,650
497,119
3,306,832
86,218
12,209,035
Depreciation charged in the year
96,323
242,870
1,563,802
32,185
986,097
7,983
2,929,260
Eliminated in respect of disposals
(17)
(940,789)
(2,926)
(574,121)
(1,517,853)
Transfers
7,453
(7,453)
At 31 December 2023
510,870
1,622,522
7,147,663
526,378
3,718,808
94,201
13,620,442
Carrying amount
At 31 December 2023
5,055,850
2,482,850
6,953,561
128,208
3,181,581
23,949
17,825,999
At 31 December 2022
842,906
6,430,700
6,789,081
124,827
3,584,453
31,932
17,803,899
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
2,573,971
2,201,591
Motor vehicles
2,338,126
2,787,049
4,912,097
4,988,640
Land and buildings acquired from Flintshire Steel Supplies with a carrying amount of £357,063 were revalued upon the hive up at 27 November 2018 by Legat Owen Chartered Surveyors, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Land and buildings
2023
2022
£
£
Cost
357,063
357,063
Accumulated depreciation
(164,248)
(142,824)
Carrying value
192,815
214,239
15
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
16
110,630
507,243
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Fixed asset investments
(Continued)
- 30 -
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
507,243
Additions
100,530
At 31 December 2023
607,773
Impairment
At 1 January 2023
-
Impairment losses
497,143
At 31 December 2023
497,143
Carrying amount
At 31 December 2023
110,630
At 31 December 2022
507,243
16
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Flintshire Waste Management and Recycling Services Limited
England & Wales
Dormant
Ordinary
100.00
Flintshire Steel Supplies Limited
England & Wales
Dormant
Ordinary
100.00
Morris Garden Machinery Limited
England & Wales
Dormant
Ordinary
100.00
17
Stocks
2023
2022
£
£
Finished goods and goods for resale
4,774,214
4,411,094
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
18
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,731,317
3,771,588
Corporation tax recoverable
207,988
Amounts owed by group undertakings
1,371
1,371
Other debtors
554,100
259,092
Prepayments and accrued income
384,306
337,995
4,671,094
4,578,034
19
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
21
376,279
2,680,789
Obligations under finance leases
22
1,730,743
1,657,755
Other borrowings
21
2,268,525
1,847,093
Trade creditors
3,178,342
3,168,395
Amounts owed to group undertakings
10,000
507,143
Taxation and social security
721,405
282,267
Other creditors
297,580
513,816
Accruals and deferred income
15,067
288,692
8,597,941
10,945,950
20
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
21
2,022,383
Obligations under finance leases
22
2,652,144
2,680,733
4,674,527
2,680,733
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
21
Loans and overdrafts
2023
2022
£
£
Bank loans
2,398,662
2,679,079
Bank overdrafts
1,710
Other loans
2,268,525
1,847,093
4,667,187
4,527,882
Payable within one year
2,644,804
4,527,882
Payable after one year
2,022,383
On 22 January 2009 a legal charge was created in favour of Barclays Bank Plc securing all monies due to the bank over the land to the south side of Mold Road, Alltami.
On 30 January 2009 a legal charge was created in favour of Barclays Bank Plc on all monies due or to become due from the company to the charge on any account whatsoever. This charge is held over the Waste Recycling site, Flintshire Waste, Ewloe Barn Industrial Estate, Mold Road, Alltami, being freehold property together with additional land to the south.
On 6 January 2015 a legal charge was created in favour of Barclays Bank Plc securing all monies due to the bank over the former Tradeteam depot, Terfyn, Bodelwyddan.
On 3 August 2015 a legal charge was created in favour of Barclays Bank Plc securing all monies due to the bank over the freehold property and land adjoining Thorncliffe Building Supplies, Alltami.
On 5 April 2019 a legal charge was created in favour of Barclays Bank Plc containing a fixed and floating charge over the undertakings of the company.
On 12 May 2020 a legal charge was created in favour of Barclays Bank Plc securing all monies due to the bank over Flintshire Steel, Ewloe Barn Industrial Estate, Mold, Alltami.
Mr. T Harper has also guaranteed the debts owed to Barclays Bank Plc on personal assets. The limit on this personal guarantee is £3,010,000.
22
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
1,730,743
1,657,755
In two to five years
2,652,144
2,680,733
4,382,887
4,338,488
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
23
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,028,474
2,189,573
Tax losses
(538,337)
(461,511)
Short term differences
(6,489)
-
1,483,648
1,728,062
2023
Movements in the year:
£
Liability at 1 January 2023
1,728,062
Credit to profit or loss
(244,414)
Liability at 31 December 2023
1,483,648
The deferred tax liability set out above relates to accelerated capital allowances and tax losses carried forward.
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
301,113
406,545
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.
25
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
970
970
970
970
Ordinary B of £1 each
30
30
30
30
1,000
1,000
1,000
1,000
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
25
Share capital
(Continued)
- 34 -
All shares issued are non-redeemable and rank equally in terms of:
Voting rights - one vote for each share;
Rights to participate in all approved dividend distributions for that class of share;
Rights to participate in any capital distribution on winding up.
26
Prior period error
In the prior year filed accounts, invoice financing liabilities were presented as cash and cash equivalents when they are a form of financing. The presentation of this in the comparative period has been adjusted.
27
Events after the reporting date
Post year end the company has plans to purchase a new depot and branch to provide building supplies near Wrexham. The opening of this was scheduled for May 2024 however this was delayed. This is to cost around £1.6 million and will be financed by bank loans.
28
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
390,472
393,126
Transactions with related parties
During the year the company entered into the following sales transactions with related parties:
Name of related party
Nature of relationship
Entities with control, joint control or significant influence over the company
Shareholders
Key management personnel
Directors
Other related parties
Other related parties
Description of
Income
Payments
transaction
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
Sales
18,555
Key management personnel
Sales
36,319
Other related parties
Sales
67,198
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
Related party transactions
(Continued)
- 35 -
During the year the company has paid rent of £168,000 (2022 - £168,000) to a Director of the company for use of freehold property by the company, which is owned privately by the Director.
The Directors review this rental charge annually.
Balances outstanding from other related parties to the sum of £13,200 (2022 - £24,821) remain at the year end, some of which may fall due more than one year.
Contributions of £nil (2022 - £136,000) were made during the year to the Harper family SSAS pension scheme.
A loan of £270,000 was made to the Harper family SSAS in 2022, this is being repaid monthly. The balance of £187,500 (2022 - £246,359) was outstanding at the year end.
The company has paid rent of £43,000 (2022 - £16,876) to the Harper family SSAS for use of freehold property during the year.
Balances with related parties
The following amounts were trade debts outstanding from related parties at the reporting end date:
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
18,671
Key management personnel
21,267
Other related parties
39,271
Other information
Exemption from related party disclosures under section FRS102.33.1A between Thorncliffe Building Supplies Limited and Flintshire Steel Supplies Ltd and Morris Garden Machinery Limited has been taken on the grounds that they are both wholly owned subsidiaries of Thorncliffe Building Supplies Limited.
29
Directors' transactions
Dividends totalling £150,000 (2022 - £200,000) were paid in the year in respect of shares held by the company's directors.
30
Ultimate controlling party
The ultimate controlling party is Mr T J Harper by virtue of his majority shareholding in the company.
THORNCLIFFE BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
31
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
778,599
683,430
Adjustments for:
Taxation (credited)/charged
(244,414)
757,516
Finance costs
515,023
229,124
Investment income
(502,682)
(8,278)
Impairment of investment
497,143
Gain on disposal of tangible fixed assets
(8,030)
(143,590)
Amortisation and impairment of intangible assets
78,297
67,296
Depreciation and impairment of tangible fixed assets
2,929,260
2,513,378
Movements in working capital:
Increase in stocks
(363,120)
(634,458)
Increase in debtors
(301,048)
(180,151)
(Decrease)/increase in creditors
(537,919)
282,784
Cash generated from operations
2,841,109
3,567,051
32
Analysis of changes in net debt
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
3,396
11,600
-
14,996
Bank overdrafts
(1,710)
1,710
-
1,686
13,310
14,996
Borrowings excluding overdrafts
(4,526,172)
(141,015)
-
(4,667,187)
Obligations under finance leases
(4,338,488)
1,429,897
(1,474,296)
(4,382,887)
(8,862,974)
1,302,192
(1,474,296)
(9,035,078)
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.210Mr T HarperMr P PierceMrs D HarperMr J MonksMr J MonksMr J 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