Company registration number 01950332 (England and Wales)
P.V.C. BUILDING SUPPLIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
P.V.C. BUILDING SUPPLIES LIMITED
COMPANY INFORMATION
Directors
S R Wright
J J Fisher
S R Davies
Company number
01950332
Registered office
Sovereign House
Unit 28A Solent Industrial Estate
Southampton
Hampshire
United Kingdom
SO30 2FX
Auditor
Azets Audit Services
Athenia House
10-14 Andover Road
Winchester
Hampshire
United Kingdom
SO23 7BS
Business address
Sovereign House
Unit 28A Solent Industrial Estate
Southampton
Hampshire
United Kingdom
SO30 2FX
P.V.C. BUILDING SUPPLIES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
P.V.C. 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.

Review of the business

The directors regard turnover, gross margin and On Time & In Full service as the key performance indicators of the business. Following a year of significant growth the UK construction supply chain, like the general UK economic climate has been impacted by the ongoing war in Ukraine and the resultant geopolitical instability, coupled with rising global utilities cost. These have had profound impacts on the operational and financial aspects of the UK construction industry such as raw material shortages and logistical issues.

 

However, sales performance was consistently strong through the first half of the year, up 20% on the same period the previous year. This was driven by the keen plan of national and regional developers to secure new build completions prior to the end of the grace period for compliance with the updated Part L Building Regulations.

 

As part of the company’s strategic plan for growth, it opened two new distribution depots in Huntingdon and Avonmouth in June and August respectively. The investment in these facilities enables significant expansion in delivery capability enabling the company to service new business in Sheffield to the north and Swansea to the west. At capacity these two new depots will enable the company to more than double turnover in the coming years and help seed further geographic expansion in the north of England by 2026.

 

Unfortunately, the second half of 2023 was impacted by the increases in interest rates and mortgage rates which have had a notable impact on the UK housing market, affecting affordability, demand, supply, and overall market dynamics. While higher borrowing costs have led to a slowdown in price growth and reduced transaction volumes, the market is adapting to these changes. H2FY23 saw only a 5% increase in turnover over the same period the previous year which a steep decline in the growth experienced during the first half of the year.

 

In maintaining our strong focus on customer service, the directors are satisfied with the 99% On Time and 99% In Full delivery rates during 2023 and will continue to review measures to ensure the company offers industry leading service for both deliveries and stock availability.

 

The total net assets of the company at the balance sheet date were £6,816,782 (2022: £5,753,789).

 

P.V.C. BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future Developments

The company will continue to drive growth by further increasing focus on securing net new customers in the new geographic regions serviced by the two new depots opened in 2023 whilst continuing to adjust service offerings to improve customer satisfaction in delivering market leading, customer centric service.

 

Increased costs and uncertainty have led developers to slow down new construction projects, affecting future supply. Higher interest rates have made financing new developments more expensive and challenging, impacting the feasibility of some projects whilst higher borrowing costs have dampened demand, with potential buyers delaying purchases or seeking lower-priced properties. Continued uncertainty about future interest rate movements has made buyers more cautious, impacting market activity. The company has invested headcount in its commercial division to improve thought leadership for it’s growth strategy as well as faster, data driven decision making. A keen focus on bolstering its product portfolio is part of the plan to achieve sustainable growth and stability. By mitigating risks, enhancing revenue streams, driving innovation, and adapting to market changes, the company has a robust and resilient business model. While diversification presents challenges, the benefits far outweigh the risks, making it an essential component of our long-term business strategy.

The election of a new Labour government is poised to bring significant changes to the UK housing market. Through increased housing supply, affordability measures, and regulatory reforms, Labour's policies aim to address housing shortages, improve affordability, and create a more balanced and equitable housing market. While there may be short-term adjustments and uncertainties, the long-term outlook suggests a potential for increased stability which the company, with its four distribution depots and strong focus on excellent customer service, is well placed to capitalise on.

 

Principal risks and uncertainties

To ensure the company’s future growth is effectively supported by a modern ERP platform, critical for automating back-end processes and surfacing real-time data to enable faster business decisions, the company completed a detailed competitive procurement activity and selected its preferred solution during the second half of 2022. The ERP replacement project commenced in 2023 and was due to go live in 2024. However, due to a number of issues with data integrity and data migration from the old to the new system, the project has experienced delays. In the summer of 2024, the company took the decision to halt the project whilst it looked to secure additional resource in the form of client-side consultancy and project management to ensure the successful implementation of the new system. A new plan for testing and integration has been agreed with a new “go live” date at the end of Q1FY25.

Trading in the business is influenced by the macro-economic environment in the UK. The level of activity in the residential house build and non-residential construction and in the residential improvement, maintenance and repair markets have a major influence on demand. Demand in these markets is sensitive to economic conditions generally including economic growth, interest rate movements, inflation, unemployment and demographic trends. The growth in the residential new build housing market will be impacted by a complex array of risks and uncertainties, ranging from geopolitical tensions and economic pressures to environmental challenges and technological disruptions. The company remains vigilant and adaptable to navigate these risks to support sustainable growth in these uncertain times.

 

P.V.C. BUILDING SUPPLIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Key performance indicators

The directors believe that the following indicators will provide sufficient information to assess how effectively the Company is performing:

 

 

2023

2022

Turnover

£41,139,745

£36,400,418

Gross profit

£6,093,785

£5,974,472

Operating profit

£2,809,567

£3,653,652

Gross profit margin

14.8%

16.4%

% on time delivery rates

99%

98.7%

 

 

 

On behalf of the board

S R Wright
Director
9 September 2024
P.V.C. BUILDING SUPPLIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

Principal activities

The principal activity of the company during the year under review was that of supplying plastic, metal tube and fittings, as well as other associated products in relation to first and second fix plumbing and mechanical requirements in the construction industry.

Results and dividends

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

Ordinary dividends were paid amounting to £1,000,000. 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:

S R Wright
J J Fisher
S R Davies
Financial instruments

The company’s activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The company adopts a prudent approach to liquidity management and to mitigate against cash flow and liquidity risk continuously monitors forecasted and actual cash and maintains sufficient cash reserves to meet its obligations. The company’s main exposure to credit risk is its provision of short-term credit to customers with the company carrying out associated credit risk by insuring all customers via the provision of credit insurance.

 

In the uncertain economic climate there is a heightened risk that a greater number of sub-contractors in the construction industry will suffer from a continued downturn in the new build housing market and go out of business. The company will remain vigilant to the possibility of seeing an increase in customers defaulting on payment terms and will take action against persistent offenders. Such action will include the cessation of trading with persistent offenders. The company continues to invest in credit control processes and procedures to assist in identifying risk at the earliest opportunity.

 

Auditor

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

P.V.C. BUILDING SUPPLIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Statement of directors' responsibilities

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Strategic Report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.

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
S R Wright
Director
9 September 2024
P.V.C. BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF P.V.C. BUILDING SUPPLIES LIMITED
- 6 -
Opinion

We have audited the financial statements of P.V.C. 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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

P.V.C. BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF P.V.C. BUILDING SUPPLIES LIMITED
- 7 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

P.V.C. BUILDING SUPPLIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF P.V.C. BUILDING SUPPLIES LIMITED
- 8 -

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

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

 

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

 

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

 

 

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Mr Richard Hutchinson
Senior Statutory Auditor
For and on behalf of Azets Audit Services
10 September 2024
2024-09-10
Chartered Accountants
Statutory Auditor
Athenia House
10-14 Andover Road
Winchester
Hampshire
United Kingdom
SO23 7BS
P.V.C. BUILDING SUPPLIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
41,139,745
36,400,418
Cost of sales
(35,045,960)
(30,425,946)
Gross profit
6,093,785
5,974,472
Administrative expenses
(3,314,218)
(2,350,820)
Other operating income
30,000
30,000
Operating profit
4
2,809,567
3,653,652
Interest receivable and similar income
7
22,891
7,502
Interest payable and similar expenses
8
(108,712)
(38,958)
Profit before taxation
2,723,746
3,622,196
Tax on profit
9
(660,753)
(687,614)
Profit for the financial year
2,062,993
2,934,582

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

P.V.C. BUILDING SUPPLIES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,625,074
1,168,856
Investments
13
1,300
1,300
2,626,374
1,170,156
Current assets
Stocks
14
3,818,631
2,598,344
Debtors
15
8,692,125
9,195,542
Cash at bank and in hand
1,332,628
2,400,093
13,843,384
14,193,979
Creditors: amounts falling due within one year
16
(8,359,554)
(8,409,912)
Net current assets
5,483,830
5,784,067
Total assets less current liabilities
8,110,204
6,954,223
Creditors: amounts falling due after more than one year
17
(793,227)
(930,330)
Provisions for liabilities
Deferred tax liability
20
500,195
270,104
(500,195)
(270,104)
Net assets
6,816,782
5,753,789
Capital and reserves
Called up share capital
22
36,000
36,000
Capital redemption reserve
4,000
4,000
Profit and loss reserves
6,776,782
5,713,789
Total equity
6,816,782
5,753,789
The financial statements were approved by the board of directors and authorised for issue on 9 September 2024 and are signed on its behalf by:
S R Wright
J J Fisher
Director
Director
Company Registration No. 01950332
P.V.C. BUILDING SUPPLIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
36,000
4,000
3,779,207
3,819,207
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,934,582
2,934,582
Dividends
10
-
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
36,000
4,000
5,713,789
5,753,789
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
2,062,993
2,062,993
Dividends
10
-
-
(1,000,000)
(1,000,000)
Balance at 31 December 2023
36,000
4,000
6,776,782
6,816,782
P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

P.V.C. Building Supplies Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sovereign House, Unit 28A Solent Industrial Estate, Southampton, Hampshire, United Kingdom, SO30 2FX.

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 relate to P.V.C Building Supplies Limited as an individual entity.

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

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

 

 

The financial statements of the company are consolidated in the financial statements of P.V.C Group Holdings Limited. These consolidated financial statements are available from its registered office, Sovereign House Unit 28a Solent Industrial Estate, Shamblehurst Lane Hedge End, Southampton, Hampshire, United Kingdom, SO30 2FX.

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 represents amounts receivable for goods net of VAT and trade discounts and is recognised at the point of sale of goods.

1.4
Intangible fixed assets - goodwill

Intangible assets are written off in equal instalments over their estimated useful economic life which is considered to be 4 years.

1.5
Tangible fixed assets

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

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

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:

Improvements to leasehold property
5-10% Straight line
Plant, machinery, fixtures and fittings
25% Reducing balance
Motor vehicles
5 years Straight line, £1,000 residual value

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.

During the current financial year, the company has revised the method used to depreciate its motor vehicles. Previously, motor vehicles were depreciated using the reducing balance method. Effective from 01 January 2023, the company has adopted the straight-line method for depreciating motor vehicles, with a residual value of £1,000.This change has been made to better reflect the pattern in which the economic benefits of the motor vehicles are consumed.

This change in accounting estimate has been accounted for prospectively in accordance with FRS 102,

1.6
Fixed asset investments

Fixed asset investments are stated at cost less provision for diminution in value.

1.7
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.

1.8
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.

 

Cost of stock is valued on a weighted average basis.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.9
Cash and cash equivalents

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

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.10
Financial instruments

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

 

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

 

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, amounts owed by group companies, 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.

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.

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors and bank loans 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.

Derecognition of financial liabilities

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

1.11
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.

1.12
Taxation

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

Current tax

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

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.

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
Employee benefits

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

 

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

 

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.

1.14
Retirement benefits

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

1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provisions

Stock is held at the lower of cost and net realisable value. Stock is reviewed annually to evaluate the age and movement of stock items and a provision is made for old and slow moving stock. Any items not moving and remaining in stock over five months are regarded as potentially redundant, and a 5% or 20% provision (2022 - 20%) is made against them, dependant on stock lines. This is in addition to known surplus stock, which is provided for at 100%. The stock provision at the year end was £136,349 (2022 - £140,195)

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
41,139,745
36,400,418
2023
2022
£
£
Other revenue
Interest income
22,891
7,502
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
24,500
19,430
Depreciation of owned tangible fixed assets
279,314
225,441
Depreciation of tangible fixed assets held under finance leases
178,205
60,326
Loss/(profit) on disposal of tangible fixed assets
7,911
(2,014)
Operating lease charges
457,821
240,518
5
Employees

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

2023
2022
Number
Number
Production and sales
139
109
Directors
3
3
Total
142
112

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,664,069
3,716,489
Social security costs
455,239
384,379
Pension costs
93,812
70,108
5,213,120
4,170,976
P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
384,000
462,900
Company pension contributions to defined contribution schemes
13,017
13,396
397,017
476,296

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
304,920
395,236
Company pension contributions to defined contribution schemes
12,500
12,500

For the purposes of disclosure key management personnel and directors are the same people, therefore no separate disclosure has been made.

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
22,891
7,502
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
61,327
32,686
Interest on finance leases and hire purchase contracts
47,385
6,272
108,712
38,958
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
430,662
615,452
Adjustments in respect of prior periods
-
0
(3,270)
Total current tax
430,662
612,182
P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
230,091
75,432
Total tax charge
660,753
687,614

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

2023
2022
£
£
Profit before taxation
2,723,746
3,622,196
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
640,625
688,217
Tax effect of expenses that are not deductible in determining taxable profit
9,996
7,187
Depreciation on assets not qualifying for tax allowances
560
720
Other permanent differences
-
0
(2,874)
Under/(over) provided in prior years
-
0
(3,270)
Super deduction
(4,059)
(21,159)
Effect of different rate to compute deferred tax
13,631
18,793
Taxation charge for the year
660,753
687,614
10
Dividends
2023
2022
£
£
Interim paid
1,000,000
1,000,000
P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Intangible fixed assets
Intangibles
£
Cost
At 1 January 2023 and 31 December 2023
5,729
Amortisation and impairment
At 1 January 2023 and 31 December 2023
5,729
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
12
Tangible fixed assets
Improvements to leasehold property
Plant, machinery, fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
132,833
584,250
1,765,882
2,482,965
Additions
930,616
140,914
899,305
1,970,835
Disposals
-
0
(2,500)
(184,767)
(187,267)
At 31 December 2023
1,063,449
722,664
2,480,420
4,266,533
Depreciation and impairment
At 1 January 2023
49,747
495,374
768,988
1,314,109
Depreciation charged in the year
52,128
43,734
361,657
457,519
Eliminated in respect of disposals
-
0
(1,665)
(128,504)
(130,169)
At 31 December 2023
101,875
537,443
1,002,141
1,641,459
Carrying amount
At 31 December 2023
961,574
185,221
1,478,279
2,625,074
At 31 December 2022
83,086
88,876
996,894
1,168,856

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
£
£
Motor vehicles
1,118,256
422,884
P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Fixed asset investments
2023
2022
£
£
Unlisted investments
1,300
1,300
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,818,631
2,598,344
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
6,004,681
6,096,621
Amounts owed by group undertakings
800,000
1,000,000
Other debtors
1,633,088
2,017,649
Prepayments and accrued income
254,356
81,272
8,692,125
9,195,542
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
18
375,000
375,000
Obligations under finance leases
19
376,619
155,712
Trade creditors
5,074,278
5,254,862
Corporation tax
6,144
318,717
Other taxation and social security
426,890
110,944
Other creditors
635,781
607,198
Accruals and deferred income
1,464,842
1,587,479
8,359,554
8,409,912

Amounts payable under finance leases are secured against the assets concerned.

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
312,500
687,500
Obligations under finance leases
19
480,727
242,830
793,227
930,330

Amounts payable under finance leases are secured against the assets concerned.

18
Loans and overdrafts
2023
2022
£
£
Bank loans
687,500
1,062,500
Payable within one year
375,000
375,000
Payable after one year
312,500
687,500

The CBIL loan is secured by the assets of the company. The lender has been given a partial guarantee from the Secretary of State, under the Coronavirus Business Interruption Loan Scheme.

Interest is charged at 2.09% above base rate.

19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
422,358
172,036
In two to five years
511,813
268,732
934,171
440,768
Less: future finance charges
(76,825)
(42,226)
857,346
398,542

Finance lease payments represent rentals payable by the company for motor vehicles. 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 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

Obligations under finance leases are secured over the assets to which they relate.

P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
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
501,666
271,575
Retirement benefit obligations
(1,471)
(1,471)
500,195
270,104
2023
Movements in the year:
£
Liability at 1 January 2023
270,104
Charge to profit or loss
230,091
Liability at 31 December 2023
500,195
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
93,812
70,108

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.

22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' shares of £1 each
36,000
36,000
36,000
36,000
P.V.C. BUILDING SUPPLIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
23
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
630,006
259,947
Between two and five years
1,612,535
462,372
In over five years
641,753
-
0
2,884,294
722,319
24
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
107,647
Acquisition of intangible assets
35,315
112,965
35,315
220,612
25
Related party transactions

The company has taken advantage of the exemption available in FRS 102, whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.

 

Dividends were paid to the parent company in the current and prior year.

 

Included in other debtors is a balance of £50,024 owed by a company of which two of the directors and shareholders of P.V.C. Building Supplies Limited are also directors and shareholders. Rent of £112,000 was paid in the year to the same company.

26
Ultimate controlling party

The company’s immediate parent undertaking is P.V.C Group Holdings Limited.

The smallest and largest group in which the results of the company are consolidated is that headed by P.V.C Group Holdings Limited. Copies of the financial statements for P.V.C Group Holdings can be obtained from its registered office of Sovereign House Unit 28a Solent Industrial Estate, Shamblehurst Lane Hedge End, Southampton, Hampshire, United Kingdom, SO30 2FX.

The ultimate controlling party of the company are the shareholders of P.V.C Group Holdings Limited: Spencer Wright and Jenny Fisher

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