Company Registration No. 09036580 (England and Wales)
LGW GROUP LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
Premier House
127 Duckmoor Road
Ashton Gate
Bristol
BS3 2BJ
LGW GROUP LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12 - 13
Company balance sheet
14 - 15
Group statement of changes in equity
16
Company statement of changes in equity
17
Group statement of cash flows
18
Notes to the financial statements
19 - 47
LGW GROUP LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr L Wright
Mr G H Ogden
Company number
09036580
Registered office
2 a St Ivel Way
Warmley
Bristol
England
BS30 8TY
Auditor
TC Group
Premier House
127 Duckmoor Road
Ashton Gate
Bristol
England
BS3 2BJ
Business address
2 a St Ivel Way
Warmley
Bristol
England
BS30 8TY
LGW GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
As the industry is experiencing growth in all sectors so the demands on the group have increased and have continued to do so since the year-end.
Group turnover for the year was £40,813,438 compared to £29,124,472 for 2022 The gross profit margin remained constant in both years at 17.8%.
The profit after taxation was £929,019 compared to £188,338 in 2022. EBITDA for the year was £3,238,875 compared to £1,805,279 for 2022. These are the Key Performance Indicators for the Group.
The Group continues to invest in new plant and machinery and develop its infrastructure, notably at its new sites at Avonmouth and Chippenham sites.
The directors believe that now these sites are operational, both turnover and gross profit should continue to increase.
LGW Group Limited continues to support its subsidiary, joint venture and associate companies. The group continues to be a going concern.
LGW GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Principal risks and uncertainties
The key risks and uncertainties affecting the group are considered to relate to general economic conditions affecting the construction industry as detailed below;
Volatile Pricing and Supply
The past 12 months have seen prices stabilise compared to previous years, with long term contracts being sought from suppliers to manage future cost increases along with supply demands. The group has a network of reliable suppliers, with whom management work closely to meet contractual needs. Prices are monitored regularly against a panel of suppliers to ensure that we are getting the best value to be able to pass onto our customers.
Market Constriction
The demand for new build housing from individuals, can be impacted by availability of support from government schemes, such as help to buy which ended in 2023. With the new Labour government taking office in 2024 with a pledge to deliver 1.5 million new homes over the next 5 years through a freedom to buy scheme this should increase demand.
The risk of maintaining growth is mitigated by diversifying our geographical range to allow for our products to be delivered over a greater area, repurposing assets, and staff already within the business, Q3 2024 will see a new operating base open within the Chippenham area while the business continues developing new product lines, with an inhouse block and brick factory. This allows for a greater product diversification and provide a one stop shop for construction products.
Competition
The risk of mitigating growing revenue can be dependant on competing businesses. The risk is managed by maintaining quality and customer satisfaction while reviewing prices to remain competitive.
Mr L Wright
Director
5 September 2024
LGW GROUP 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 and group continued to be that of concrete and metal decking construction specialists.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £224,000. The directors do not recommend payment of a further 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 L Wright
Mr G H Ogden
Research and development
Research and development cost are expensed through the profit and loss account. The group continues to explore research and development opportunities in order to diversify and remain competitive in the industry within which we operate.
Future developments
The economic slow down has affected the whole industry, however the group is well placed to support from within.
The block factory came on stream in October 2023 with a soft start and we are now leveraging sales from our existing customer base providing growth.
Our focus in 2024 is the cross-selling of group products and services and the concept of a one stop shop. We will also expand our block factory product offer, develop a supply and install ability for precast out of Mexboro factory and expand our readymix offer East of Bristol.
Auditor
The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
LGW GROUP 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
LGW GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
On behalf of the board
Mr L Wright
Director
5 September 2024
LGW GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LGW GROUP LIMITED
- 7 -
Opinion
We have audited the financial statements of LGW Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2023 and of the group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
LGW GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LGW GROUP LIMITED
- 8 -
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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
LGW GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LGW GROUP LIMITED
- 9 -
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.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. 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.
Amanda Kruger FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
5 September 2024
Premier House
Statutory Auditor
127 Duckmoor Road
Ashton Gate
Bristol
BS3 2BJ
LGW GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
40,813,438
29,124,472
Cost of sales
(33,565,310)
(23,941,547)
Gross profit
7,248,128
5,182,925
Administrative expenses
(5,852,761)
(5,171,884)
Other operating income
126,027
165,530
Operating profit
4
1,521,394
176,571
Share of profits of associates and joint ventures
96,596
41,795
Interest receivable and similar income
8
30,275
7,343
Interest payable and similar expenses
9
(224,393)
(85,154)
Amounts written off investments
10
-
(96,566)
Profit before taxation
1,423,872
43,989
Tax on profit
11
(494,853)
144,349
Profit for the financial year
32
929,019
188,338
Profit for the financial year is all attributable to the owners of the parent company.
LGW GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
£
£
Profit for the year
929,019
188,338
Other comprehensive income
Tax relating to other comprehensive income
(590,024)
169,660
Total comprehensive income for the year
338,995
357,998
Total comprehensive income for the year is all attributable to the owners of the parent company.
LGW GROUP LIMITED
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
13
11,958
198,600
Tangible assets
14
20,049,353
11,253,976
Investment properties
15
295,998
295,998
Investments
16
287,520
216,103
20,644,829
11,964,677
Current assets
Stocks
20
680,302
695,412
Debtors
21
4,844,692
5,442,488
Cash at bank and in hand
713,751
1,132,799
6,238,745
7,270,699
Creditors: amounts falling due within one year
22
(6,742,337)
(7,046,907)
Net current (liabilities)/assets
(503,592)
223,792
Total assets less current liabilities
20,141,237
12,188,469
Creditors: amounts falling due after more than one year
23
(5,935,947)
(1,611,930)
Provisions for liabilities
Provisions
26
550,000
743,950
Deferred tax liability
27
2,479,526
1,177,816
(3,029,526)
(1,921,766)
Net assets
11,175,764
8,654,773
Capital and reserves
Called up share capital
29
120
120
Share premium account
30
499,982
499,982
Revaluation reserve
31
3,560,342
1,837,460
Profit and loss reserves
32
7,115,320
6,317,211
Total equity
11,175,764
8,654,773
LGW GROUP LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
The financial statements were approved by the board of directors and authorised for issue on 5 September 2024 and are signed on its behalf by:
05 September 2024
Mr L Wright
Director
Company registration number 09036580 (England and Wales)
LGW GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 14 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
14
11,812,308
3,719,444
Investment properties
15
295,998
295,998
Investments
16
2,006,202
3,328,873
14,114,508
7,344,315
Current assets
Debtors
21
691,801
457,229
Cash at bank and in hand
222,326
89,967
914,127
547,196
Creditors: amounts falling due within one year
22
(6,358,850)
(5,197,838)
Net current liabilities
(5,444,723)
(4,650,642)
Total assets less current liabilities
8,669,785
2,693,673
Creditors: amounts falling due after more than one year
23
(3,872,907)
(542,841)
Provisions for liabilities
Deferred tax liability
27
973,821
(973,821)
-
Net assets
3,823,057
2,150,832
Capital and reserves
Called up share capital
29
120
120
Share premium account
30
499,982
499,982
Revaluation reserve
31
1,989,928
Profit and loss reserves
32
1,333,027
1,650,730
Total equity
3,823,057
2,150,832
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £93,703 (2022 - £259,208 profit).
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
LGW GROUP LIMITED
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
31 December 2023
- 15 -
The financial statements were approved by the board of directors and authorised for issue on 5 September 2024 and are signed on its behalf by:
05 September 2024
Mr L Wright
Director
Company registration number 09036580 (England and Wales)
LGW GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
120
499,982
2,346,438
5,686,000
8,532,540
Year ended 31 December 2022:
Profit for the year
-
-
-
188,338
188,338
Other comprehensive income:
Tax relating to other comprehensive income
-
-
169,660
169,660
Total comprehensive income for the year
-
-
169,660
188,338
357,998
Dividends
12
-
-
-
(235,765)
(235,765)
Transfers
-
-
(678,638)
678,638
-
Balance at 31 December 2022
120
499,982
1,837,460
6,317,211
8,654,773
Year ended 31 December 2023:
Profit for the year
-
-
-
929,019
929,019
Other comprehensive income:
Tax relating to other comprehensive income
-
-
(590,024)
(242,576)
(832,600)
Total comprehensive income for the year
-
-
(590,024)
686,443
96,419
Dividends
12
-
-
-
(224,000)
(224,000)
Transfers
-
-
(335,666)
335,666
-
Revaluation in the year
-
-
2,648,572
-
2,648,572
Balance at 31 December 2023
120
499,982
3,560,342
7,115,320
11,175,764
LGW GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
120
499,982
1,627,287
2,127,389
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
259,208
259,208
Dividends
12
-
-
-
(235,765)
(235,765)
Balance at 31 December 2022
120
499,982
1,650,730
2,150,832
Year ended 31 December 2023:
Loss for the year
-
-
-
(93,703)
(93,703)
Other comprehensive income:
Tax relating to other comprehensive income
-
-
(658,644)
(658,644)
Total comprehensive income for the year
-
-
(658,644)
(93,703)
(752,347)
Dividends
12
-
-
-
(224,000)
(224,000)
Other movements
-
-
2,648,572
-
2,648,572
Balance at 31 December 2023
120
499,982
1,989,928
1,333,027
3,823,057
The notes on pages 19 to 47 form part of these financial statements
LGW GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
36
2,526,801
1,606,895
Interest paid
(224,393)
(85,154)
Income taxes paid
(171,286)
(288,685)
Net cash inflow from operating activities
2,131,122
1,233,056
Investing activities
Purchase of tangible fixed assets
(5,827,837)
(786,393)
Proceeds from disposal of tangible fixed assets
3,031,240
764,687
Interest received
30,275
7,343
Net cash used in investing activities
(2,766,322)
(14,363)
Financing activities
Proceeds from new bank loans
1,800,000
-
Repayment of bank loans
(372,752)
(450,325)
Payment of finance leases obligations
(987,096)
(1,329,989)
Dividends paid to equity shareholders
(224,000)
(235,765)
Net cash generated from/(used in) financing activities
216,152
(2,016,079)
Net decrease in cash and cash equivalents
(419,048)
(797,386)
Cash and cash equivalents at beginning of year
1,132,799
1,930,185
Cash and cash equivalents at end of year
713,751
1,132,799
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
1
Accounting policies
Company information
LGW Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 2 St Ivel Way, Warmley, Bristol, BS30 8TY .
The group consists of LGW Group Limited and all of its subsidiaries and joint ventures.
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, modified to include the revaluation of categories of plant and machinery to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company LGW Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
1.4
Going concern
The directors have prepared the forecasts which considers uncertainties from the wider economic environments outside of the Group's control.
Based on the forecasts prepared, directors believe the Group is well placed to manage its financial and other business risks satisfactorily and have a reasonable expectation that the Group will have adequate resources to continue their operation for at least 12 months from the signing date of these accounts. They therefore consider it appropriate to prepare these accounts on a going concern basis.
1.5
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.6
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business 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.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.7
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
Land not depreciated
Leasehold land and buildings
Over the period of the lease
Leasehold improvements
Over the period of the lease
Plant and equipment
20% on straight line basis
Fixtures and fittings
33% on cost or 25% on reducing balance
Computers
33% on cost or 25% on reducing balance
Motor vehicles
25% on 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 recognised in the profit and loss account.
1.8
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
Property rented to a group entity is accounted for as tangible fixed assets.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.9
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.10
Borrowing costs related to fixed assets
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.11
Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
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.
1.12
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.
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.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.13
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.14
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.
1.15
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 25 -
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 group 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 group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies 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.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 26 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.16
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.17
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. 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 if, and only if, there is 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.
1.18
Provisions
Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 27 -
1.19
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.
1.20
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.21
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.
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.
1.22
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide understanding of the financial performance of the company. They are items that are material either because of their size or their nature, or that are non recurring are considered as exceptional items and are presented within the line items to which they best relate.
1.23
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
LGW Group Limited consider the following judgements and estimates to have had the most significant effect on amounts recognised in the financial statements.
i) Useful economic lives of tangible fixed assets
The useful economic lives of tangible fixed assets, their residual values and the impairment reviews is a significant area requiring management judgement. The judgements, estimates and associated assumptions necessary to calculate these provisions are based on historical experience and other relevant factors.
ii) Useful economic lives of intangible fixed assets
The useful economic lives of intangible fixed assets, their residual values and the impairment reviews is a significant area requiring management judgement. The judgements, estimates and associated assumptions necessary to calculate these provisions are based on historical experience and other relevant factors.
iii) Work in progress
The stage of completion of work in progress is a significant area requiring management judgement and is based on managements experience and other relevant factors.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
40,813,438
29,124,472
2023
2022
£
£
Turnover analysed by geographical market
UK
40,813,438
29,124,472
2023
2022
£
£
Other revenue
Interest income
30,275
7,343
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
1,758
-
Depreciation of owned tangible fixed assets
875,907
1,384,843
Depreciation of tangible fixed assets held under finance leases
861,287
237,081
Profit on disposal of tangible fixed assets
(140,776)
(153,783)
Amortisation of intangible assets
63,524
63,525
Impairment of intangible assets
123,118
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
4,500
4,500
Audit of the financial statements of the company's subsidiaries
19,700
17,800
24,200
22,300
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
2
2
-
-
Managers & admin
40
38
-
-
Operatives
109
111
-
-
Total
151
151
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 30 -
Their aggregate remuneration comprised:
Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
5,440,170
5,298,742
Social security costs
576,498
577,920
-
-
Pension costs
188,554
189,547
6,205,222
6,066,209
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
27,288
26,970
Company pension contributions to defined contribution schemes
39,996
40,266
67,284
67,236
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
30,275
7,343
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
30,275
7,343
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
131,192
30,054
Other finance costs:
Interest on finance leases and hire purchase contracts
84,712
52,396
Other interest
8,489
2,704
Total finance costs
224,393
85,154
10
Amounts written off investments
2023
2022
£
£
Other gains and losses
-
(96,566)
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
21,447
143,030
Deferred tax
Origination and reversal of timing differences
473,406
(287,379)
Total tax charge/(credit)
494,853
(144,349)
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 32 -
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,423,872
44,110
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
334,610
8,358
Tax effect of expenses that are not deductible in determining taxable profit
(54,858)
53,418
Unutilised tax losses carried forward
22,509
Permanent capital allowances in excess of depreciation
153,305
(177,936)
Under/(over) provided in prior years
(45)
Increase from effect of joint venture
39,287
(28,144)
Taxation charge/(credit)
494,853
(144,349)
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2023
2022
£
£
Deferred tax arising on:
Revaluation of plant & machinery
590,024
(169,660)
12
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
224,000
235,765
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
331,184
Amortisation and impairment
At 1 January 2023
132,584
Amortisation charged for the year
63,524
Impairment losses
123,118
At 31 December 2023
319,226
Carrying amount
At 31 December 2023
11,958
At 31 December 2022
198,600
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
14
Tangible fixed assets
Group
Freehold land and buildings
Leasehold land and buildings
Leasehold improvements
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
£
£
Cost or valuation
At 1 January 2023
724,481
1,511,623
12,974
1,443,691
12,224,210
6,300
98,467
660,421
16,682,167
Additions
2,518,705
8,196,203
3,821
131,804
10,850,533
Disposals
(24,877)
(3,516,837)
(6,300)
(25,593)
(102,016)
(3,675,623)
Revaluation
1,905,268
729,312
2,634,580
At 31 December 2023
724,481
3,392,014
12,974
3,962,396
17,632,888
76,695
690,209
26,491,657
Depreciation and impairment
At 1 January 2023
39,025
47,567
12,974
4,907,664
6,300
90,314
324,347
5,428,191
Depreciation charged in the year
20,285
15,341
1,594,455
2,028
105,085
1,737,194
Eliminated in respect of disposals
(18,762)
(582,685)
(6,300)
(23,873)
(77,469)
(709,089)
Revaluation
(13,992)
(13,992)
At 31 December 2023
59,310
30,154
12,974
5,919,434
68,469
351,963
6,442,304
Carrying amount
At 31 December 2023
665,171
3,361,860
3,962,396
11,713,454
8,226
338,246
20,049,353
At 31 December 2022
685,456
1,464,056
1,443,691
7,316,546
8,153
336,074
11,253,976
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
Company
Freehold land and buildings
Leasehold land and buildings
Assets under construction
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 January 2023
724,481
1,486,746
1,443,691
49,745
140,101
3,844,764
Additions
2,518,705
5,651,438
111,116
8,281,259
Disposals
(2,729,644)
(27,575)
(2,757,219)
Revaluation
1,905,268
729,312
2,634,580
At 31 December 2023
724,481
3,392,014
3,962,396
3,700,851
223,642
12,003,384
Depreciation and impairment
At 1 January 2023
39,025
29,427
24,252
32,616
125,320
Depreciation charged in the year
20,285
14,719
23,691
54,183
112,878
Eliminated in respect of disposals
(19,350)
(13,780)
(33,130)
Revaluation
(13,992)
(13,992)
At 31 December 2023
59,310
30,154
28,593
73,019
191,076
Carrying amount
At 31 December 2023
665,171
3,361,860
3,962,396
3,672,258
150,623
11,812,308
At 31 December 2022
685,456
1,457,319
1,443,691
25,493
107,485
3,719,444
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
6,955,468
2,895,577
3,617,075
75,521
Categories of property, plant and equipment have been revalued by the directors in 2020, 2021 and 2023. The valuations are based on similar assets in an active market place.
The revaluation surplus is disclosed in note 31.
Categories of property, plant and machinery are carried at valuation. If property, plant and equipment were measured using the cost model, the carrying amounts would have been approximately £5,828,384 (2022: £2,999,195), being cost £6,720,191 (2022: £3,459,798) and accumulated depreciation £891,807 (2022: £460,603).
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
15
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 January 2023 and 31 December 2023
295,998
295,998
Investment property comprises of a residential dwelling acquired in 2021. The fair value of the investment property has been arrived at on the basis of the purchase price paid in 2021 which is equivalent to the fair value at the year end as no significant changes since acquisition.
16
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
17
2,005,652
3,328,323
Investments in associates
18
133,196
79,151
50
50
Investments in joint ventures
19
154,324
136,952
500
500
287,520
216,103
2,006,202
3,328,873
Movements in fixed asset investments
Group
Shares in associates and joint ventures
£
Cost or valuation
At 1 January 2023
216,103
Valuation changes
71,417
At 31 December 2023
287,520
Carrying amount
At 31 December 2023
287,520
At 31 December 2022
216,103
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Fixed asset investments
(Continued)
- 37 -
Movements in fixed asset investments
Company
Shares in subsidiaries, associates and joint ventures
£
Cost or valuation
At 1 January 2023
3,328,873
Impairment
(1,322,671)
At 31 December 2023
2,006,202
Carrying amount
At 31 December 2023
2,006,202
At 31 December 2022
3,328,873
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
17
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
Wright Readymix Ltd
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
supply of pre-mixed concrete and concrete pumping
Ordinary
100.00
Wright Concrete Pumping Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
supply of concrete pumping services
Ordinary
100.00
Chris Brown Concrete Pumping Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
dormant
Ordinary
100.00
Prodeck-Fixing (UK) Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
dormant
Ordinary
100.00
Prodeck-Fixing Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
supply and installation of structural flooring and decking
Ordinary
100.00
Wright Minimix Concrete Products
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
dormant
Ordinary
100.00
Wright Minimix (Bristol) Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
dormant
Ordinary
100.00
Bristol and Bath Concrete Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
production of ready mix concrete
Ordinary
100.00
Minipump (UK) Ltd
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
dormant
Ordinary
100.00
Mexboro Concrete Limited
2a Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
Is supply of concrete products
Ordinary
100.00
Bristol Brick Company Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
dormant
Ordinary
100.00
For the year ending 31 December 2023 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:
Wright Concrete Pumping Limited
Bristol and Bath Concrete Limited
Mexboro Concrete Limited
Prodeck-Fixing Limited
Chris Brown Concrete Pumping Limited
Minipump (UK) Ltd
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 39 -
18
Associates
Details of associates at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Bristol & Bath Developments Limited
2a St Ivel Way, Warmley, Bristol, BS30 8TY, England & Wales
property development
Ordinary
25
19
Joint ventures
Name of undertaking
Registered office
Nature of business
Interest
% Held
held
Direct
Callow Readymix Limited
Bardon Hall, Copt Oak Road, Markfield, Leicestershire, LE67 9PJ, England & Wales
suppy of pre-mixed concrete
Ordinary
50.00
20
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
320,496
313,187
-
-
Work in progress
359,806
382,225
-
-
680,302
695,412
-
-
21
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,026,628
4,507,895
Corporation tax recoverable
31,804
4,845
26,959
Amounts owed by group undertakings
-
-
620,000
203,554
Amounts owed by undertakings in which the company has a participating interest
-
69,000
-
69,000
Other debtors
306,453
488,104
42,686
184,675
Prepayments and accrued income
479,807
372,644
2,156
4,844,692
5,442,488
691,801
457,229
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 40 -
22
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
24
386,445
224,308
366,453
123,053
Obligations under finance leases
25
1,415,045
664,507
387,519
24,933
Trade creditors
4,144,486
4,573,618
145,526
393,249
Amounts owed to group undertakings
5,339,900
4,501,339
Amounts owed to undertakings in which the group has a participating interest
298,145
399,963
Corporation tax payable
171,286
9,563
Other taxation and social security
149,969
550,261
-
-
Other creditors
205,755
313,085
81,002
112,000
Accruals and deferred income
142,492
149,879
38,450
33,701
6,742,337
7,046,907
6,358,850
5,197,838
23
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
24
1,942,538
553,693
1,913,412
504,677
Obligations under finance leases
25
3,993,409
1,058,237
1,959,495
38,164
5,935,947
1,611,930
3,872,907
542,841
Amounts included above which fall due after five years are as follows:
Payable by instalments
(446,343)
-
(446,343)
-
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 41 -
24
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
2,328,983
778,001
2,279,865
627,730
Payable within one year
386,445
224,308
366,453
123,053
Payable after one year
1,942,538
553,693
1,913,412
504,677
Company
Included in Bank loans is a HSBC Bank PLC (facility £900,000) with an interest rate of 1.4% over base rate. This loan is due for repayment over 136 monthly instalments of £7,463.67 which covers principal and interest at the current base rate. The final instalment is due in March 2030. The carrying amount at year end is £555,453 (2022: £627,730).
During the year an additional loan of £1,800,000 was advanced by HSBC Bank PLC.
The new loan (facility £1,800,000) is for a 60 month term from drawdown with monthly instalments of £21,301.14, which covers principal and interest. Interest is 2.0% over base rate, with the final instalment due in April 2028. The carrying amount as at the year end was £1,724,411 (2022: £nil).
HSBC Bank PLC hold a mortgage and fixed and floating debentures over the assets of the company including land and buildings, as security for the bank loan.
Group
In addition to the above loans the group has the following additional loans.
HSBC Bank PLC has a mortgage with a fixed and floating debentures over the assets of the company dated 14 November 2017.
In addition, the above bank loans includes two unsecured loans of £100,000 each advanced in 2020 under the UK government CBILS loan scheme. The loans are for a 60 month period with annual fixed interest at 2.3%. The first years interest is paid by the UK government. The amount outstanding at the year end is £49,119 (2022:£69,008).
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 42 -
25
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
1,415,045
664,507
387,520
24,933
In two to five years
3,268,321
1,058,237
1,234,406
38,164
In over five years
725,088
725,088
5,408,454
1,722,744
2,347,014
63,097
Finance lease payments represent rentals payable by the company or group 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 5 - 7 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The finance leases are secured over the assets to which they relate.
26
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Other provisions
550,000
743,950
-
-
Movements on provisions:
Other provisions
Group
£
At 1 January 2023
743,950
Reversal of provision
(193,950)
At 31 December 2023
550,000
Other provisions at the year end relates to £550,000 for potential rebuild cost of part of the leasehold building as a result of structural damage arising during the period of occupancy. The directors believe that it is their responsibility to undertake the work and the amount included is based on their best estimate. The directors are currently in negotiations with the landlord and as the outcome is uncertain they believe that the provision is still required at the year end.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 43 -
27
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
1,938,198
565,572
Revaluations
541,328
612,244
2,479,526
1,177,816
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
973,821
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
1,177,816
-
Charge to profit or loss
559,194
231,305
Other
742,516
742,516
Liability at 31 December 2023
2,479,526
973,821
The deferred tax liability set out above relates to accelerated capital allowances. During the year £590,024 was debited to the revaluation reserve (2022: £169,659 credited), being the movement in the year on the deferred tax element on revalued assets.
28
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
188,554
189,547
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 44 -
29
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
"A" Ordinary shares of £1 each
102
102
102
102
"B" Ordinary shares of £1 each
12
12
12
12
"C" Ordinary shares of £1 each
6
6
6
6
120
120
120
120
Until the 4 June 2021 the company had one class of ordinary shares which carried no right to fixed income. On the 4 June 2021 the 120 Ordinary shares were redesignated as 102 A Ordinary, 12 B Ordinary and 6 C Ordinary shares. All shares rank pari passu except for the directors may pay an interim dividend or dividend on one or several classes of shares to the exclusion of any other class or classes of shares and at different rates on the respective classes of shares.
30
Share premium account
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning and end of the year
499,982
499,982
499,982
499,982
31
Revaluation reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
1,837,460
2,346,438
Deferred tax on revaluation of tangible assets
(662,940)
-
(658,644)
-
Reversal of deferred tax liability on revaluation
72,916
169,660
-
-
Transfer to retained earnings
(335,666)
(678,638)
-
-
Revaluation in the year
2,648,572
-
2,648,572
-
At the end of the year
3,560,342
1,837,460
1,989,928
-
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 45 -
32
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
6,317,211
5,686,000
1,650,730
1,627,287
Profit/(loss) for the year
929,019
188,338
(93,703)
259,208
Dividends
(224,000)
(235,765)
(224,000)
(235,765)
Transfer to revaluation reserve
(242,576)
-
-
-
Transfer from revaluation reserve
335,666
678,638
-
-
At the end of the year
7,115,320
6,317,211
1,333,027
1,650,730
33
Capital commitments
Amounts contracted for but not provided in the financial statements:
Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
-
800,000
-
-
34
Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Group
Callow Readymix Limited
83,042
93,887
1,486,773
1,560,871
Bristol Bath and Developments Limited
7,200
-
-
-
Company
Bristol Bath and Developments Limited
7,200
-
-
-
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
34
Related party transactions
(Continued)
- 46 -
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2023
2022
£
£
Group
Callow Readymix Limited
298,145
399,963
Other information
The directors are considered key management personnel.
Other related parties:
During the year the group has provided goods amounting to £555,205 to 2 Brothers Concrete Pumping Ltd, whose director is a close family member of a director of Wright Readymix Ltd. At the 31 December 2023 the group was owed £64,024.
The group has also provided goods amounting to £7,645 to Pump Wright Ltd, whose director is a close family member of a director of Wright Readymix Ltd. At 31 December 2023 the balance of £13,627 owed to Wright Readymix Ltd was written off as not recoverable.
35
Controlling party
The controlling party is Mr L Wright by virtue of his 85% shareholding in the company.
LGW GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 47 -
36
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
929,019
188,338
Adjustments for:
Share of results of associates and joint ventures
(96,596)
(41,795)
Taxation charged/(credited)
494,853
(144,349)
Finance costs
224,393
85,154
Investment income
(30,275)
(7,343)
Gain on disposal of tangible fixed assets
(140,776)
(153,783)
Amortisation and impairment of intangible assets
186,642
63,525
Depreciation and impairment of tangible fixed assets
1,737,194
1,621,924
Other gains and losses
-
96,566
Decrease in provisions
(193,950)
(50,448)
Movements in working capital:
Decrease/(increase) in stocks
15,110
(224,894)
Decrease/(increase) in debtors
597,796
(192,587)
(Decrease)/increase in creditors
(1,196,609)
366,466
Cash generated from operations
2,526,801
1,606,774
37
Analysis of changes in net debt - group
1 January 2023
Cash flows
Other non-cash changes
31 December 2023
£
£
£
£
Cash at bank and in hand
1,132,799
(419,048)
-
713,751
Borrowings excluding overdrafts
(778,001)
(1,550,982)
-
(2,328,983)
Obligations under finance leases
(1,722,744)
903,550
(4,589,260)
(5,408,454)
(1,367,946)
(1,066,480)
(4,589,260)
(7,023,686)
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