Company registration number 09757284 (England and Wales)
MCP ENVIRONMENTAL HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MCP ENVIRONMENTAL HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Mr A Stubbs
Ms M Chappell Dixon
(Appointed 4 August 2023)
Mr S Osina
(Appointed 4 August 2023)
Mr G Other
(Appointed 21 December 2023)
Company number
09757284
Registered office
Enviro House
Spartan Road
Low Moor
Bradford
BD12 0RY
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
MCP ENVIRONMENTAL HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9 - 10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 32
MCP ENVIRONMENTAL HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Principal activities

MCP Environmental Holdings Ltd serves as the parent company to Mchale Contracts and Plant Environmental LLP. Specializing in Asbestos and Compliance Services, as well as Civil Engineering, our diverse portfolio helps buffer against market fluctuations.

 

Asbestos and Compliance Services

Our division excels in asbestos-related services, encompassing surveying, laboratory analysis, safe removal, environmentally sound disposal, Radon mitigation works, EPC surveys, as well as gas and electrical surveys, facilitated by trusted specialist subcontractors.

 

Civil Engineering

Operating nationally in the power transmissions sector, the group boasts a strong presence in civil engineering, particularly within high voltage substations and related power operations. Our extensive experience spans over two decades, marked by long-term framework contracts across the UK. Additionally, we actively pursue opportunities with local authorities and educational institutions, offering general civil engineering and groundworks services.

Review of the business

During this period, the primary focus of the group has been on providing Asbestos and Compliance Services alongside Civil Engineering works. Our operational model thrives on a skilled workforce, robust supply chain, and enduring partnerships with clients and collaborators.

Principal risks and uncertainties

Navigating a highly regulated industry presents ongoing challenges, particularly in maintaining essential accreditations and licenses. Additionally, securing financial support and retaining key personnel remain pivotal concerns. External factors, such as shifts in government policies and local authority spending, also pose potential risks to our operations.

Development and performance

Our Strategy

Focused on cultivating and sustaining long-term client relationships, we target opportunities aligned with our expertise. By prioritizing quality, safety, and talent acquisition, we aim to deliver unparalleled service, fostering client loyalty and organic growth.

 

Moving forward, our strategic focus includes consolidating existing client relationships, expanding into new commercial sectors to diversify our client base, prioritizing employee retention and development, and ensuring comprehensive training programs for our trainees.

Key performance indicators

Key Performance Indicators

The group's performance in the year ending December 2023 has been notably positive, buoyed by revenue stability from framework agreements and strategic rate adjustments.

 

 

2023

2022

Turnover

£11,987,342

£11,386,954

Gross Profit Margin

28.93%

20.25%

Staff Numbers

123

122

 

MCP ENVIRONMENTAL HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Other performance indicators

Our Resources

A Skilled Workforce with approximately 120 directly employed staff members and an average staff retention rate of 6.7 years, we prioritize investing in training to maintain the highest industry standards, crucial within our highly regulated domain.

 

Safety & Accreditations

Safety remains paramount in our operations, as reflected in our continuous investment in refining procedures and upholding rigorous training standards. We hold several accreditations, externally assessed by leading organizations, underscoring our commitment to excellence and safety.

 

Client Relationships

Leveraging our skilled workforce and robust safety credentials, we consistently deliver safe, efficient, and high-quality services that align with our clients' objectives. Our dedication has fostered enduring client relationships, enhancing the likelihood of repeat business and long-term growth.

 

Financial Management

We adopt a disciplined approach to financial management, closely monitoring cash flow and cultivating strong relationships with financial institutions. Monthly board meetings with investors ensure transparency and strategic alignment.

 

Our Culture

Central to our operational ethos are core values emphasizing employee development, empowerment, and the delivery of exceptional service. We foster a culture of pride in workmanship, prioritizing safety and sustainability across all endeavours, guided by our board.

On behalf of the board

Ms M Chappell Dixon
Director
10 September 2024
MCP ENVIRONMENTAL HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mr A Stubbs
Mr L R Litwinowicz
(Resigned 28 September 2023)
Mr R Banham
(Resigned 25 March 2024)
Ms C Blackshaw
(Resigned 11 August 2023)
Ms M Chappell Dixon
(Appointed 4 August 2023)
Mr S Osina
(Appointed 4 August 2023)
Mr G Other
(Appointed 21 December 2023)
Post reporting date events

On 24th March 2024, GIL Investments waived all their rights to outstanding interest payments totalling £120,000 that was included in trade creditors at the year end. They also waived their rights to accrued interest included in creditors: other borrowings totalling £472,212.

Auditor

Azets Audit Services Limited were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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
Ms M Chappell Dixon
Director
10 September 2024
MCP ENVIRONMENTAL HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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:

 

 

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.

MCP ENVIRONMENTAL HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MCP ENVIRONMENTAL HOLDINGS LIMITED
- 5 -
Opinion

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

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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

MCP ENVIRONMENTAL HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MCP ENVIRONMENTAL HOLDINGS LIMITED
- 6 -
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:

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.

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.

MCP ENVIRONMENTAL HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MCP ENVIRONMENTAL HOLDINGS LIMITED
- 7 -

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.

Chris Woodroffe (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
10 September 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
MCP ENVIRONMENTAL HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
11,987,342
11,386,954
Cost of sales
(8,519,759)
(9,081,254)
Gross profit
3,467,583
2,305,700
Administrative expenses
(3,722,333)
(2,838,890)
Other operating income
500
-
Exceptional item
4
(70,863)
(128,421)
Operating loss
5
(325,113)
(661,611)
Interest receivable and similar income
9
2,241
449
Interest payable and similar expenses
10
(1,005,237)
(1,307,846)
Loss before taxation
(1,328,109)
(1,969,008)
Tax on loss
11
90,479
87,263
Loss for the financial year
(1,237,630)
(1,881,745)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
MCP ENVIRONMENTAL HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
342,951
557,160
Other intangible assets
12
656,084
1,018,010
Total intangible assets
999,035
1,575,170
Tangible assets
13
242,282
306,369
1,241,317
1,881,539
Current assets
Stocks
16
177,479
130,201
Debtors
17
2,289,076
2,631,979
Cash at bank and in hand
644,760
188,889
3,111,315
2,951,069
Creditors: amounts falling due within one year
18
(11,101,568)
(13,220,523)
Net current liabilities
(7,990,253)
(10,269,454)
Total assets less current liabilities
(6,748,936)
(8,387,915)
Creditors: amounts falling due after more than one year
19
-
(31,010)
Provisions for liabilities
Deferred tax liability
22
164,021
254,502
(164,021)
(254,502)
Net liabilities
(6,912,957)
(8,673,427)
Capital and reserves
Called up share capital
24
3,320,767
322,667
Profit and loss reserves
(10,233,724)
(8,996,094)
Total equity
(6,912,957)
(8,673,427)
MCP ENVIRONMENTAL HOLDINGS LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
10 September 2024
Mr A Stubbs
Ms M Chappell Dixon
Director
Director
Mr S Osina
Director
Company registration number 09757284 (England and Wales)
MCP ENVIRONMENTAL HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Current assets
Debtors
17
3,437,071
443,862
Cash at bank and in hand
1,818
3,092
3,438,889
446,954
Creditors: amounts falling due within one year
18
(121,900)
(122,641)
Net current assets
3,316,989
324,313
Capital and reserves
Called up share capital
24
3,320,767
322,667
Profit and loss reserves
(3,778)
1,646
Total equity
3,316,989
324,313

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 £5,424 (2022 - £6 loss).

The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
10 September 2024
Mr A Stubbs
Ms M Chappell Dixon
Director
Director
Mr S Osina
Director
Company registration number 09757284 (England and Wales)
MCP ENVIRONMENTAL HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
322,667
(7,114,349)
(6,791,682)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(1,881,745)
(1,881,745)
Balance at 31 December 2022
322,667
(8,996,094)
(8,673,427)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(1,237,630)
(1,237,630)
Issue of share capital
24
2,998,100
-
2,998,100
Balance at 31 December 2023
3,320,767
(10,233,724)
(6,912,957)
MCP ENVIRONMENTAL HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
322,667
1,652
324,319
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(6)
(6)
Balance at 31 December 2022
322,667
1,646
324,313
Year ended 31 December 2023:
Profit and total comprehensive income
-
(5,424)
(5,424)
Issue of share capital
24
2,998,100
-
2,998,100
Balance at 31 December 2023
3,320,767
(3,778)
3,316,989
MCP ENVIRONMENTAL HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
119,839
272,124
Income taxes paid
(3,220)
(2)
Net cash inflow from operating activities
116,619
272,122
Investing activities
Purchase of tangible fixed assets
(15,602)
(28,932)
Interest received
2,241
449
Net cash used in investing activities
(13,361)
(28,483)
Financing activities
Proceeds from issue of shares
2,998,100
-
Repayment of borrowings
(2,998,100)
-
Movement on borrowings
754,161
-
Payment of finance leases obligations
(44,098)
(50,775)
Interest paid
(357,450)
(478,757)
Net cash generated from/(used in) financing activities
352,613
(529,532)
Net increase/(decrease) in cash and cash equivalents
455,871
(285,893)
Cash and cash equivalents at beginning of year
188,889
474,782
Cash and cash equivalents at end of year
644,760
188,889
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

MCP Environmental Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of MCP Environmental Holdings Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

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

The 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 for parent company information presented within the consolidated financial statements:

 

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.

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company MCP Environmental Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

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.

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

At 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.

 

The directors have prepared forecasts to December 2025 and have taken into consideration know events and conditions falling outside the immediate twelve-month period. The forecasts were approved by the board in May 2024. The directors have adopted the going concern basis in preparing the financial statements after evaluating the impact of the many challenges facing the business including the ongoing conflict between Ukaraine and Russia, the increasing costs of labour and materials during a period of high inflation and labour shortages during times of political uncertainty.

 

Forecasts for the group have been prepared along with a sensitised forcast and tested against covenants and the directors are satisfied that there are adequate headroom to allow business operations to continue for twelve months from the date of signing.

 

The principal oustanding of A loan notes of £2,373,100 and B loan notes of £625,000 (which sit in MCP Environmental Group Ltd registration 09757275; being the immediate controlling party) have been novated to MCP Environmental Holdings Ltd and converted into preferance shares with a zero coupon rate. This reduces the overall interest burden on the group and provides a stable financial basis to build.

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

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
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Customer relationships
5 - 10 years
1.8
Tangible fixed assets

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

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
10% straight line
Plant and equipment
25% reducing balance
Other fixed assets
25% reducing balance
Computers
25% reducing balance
Motor vehicles
25% reducing balance
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

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.

1.9
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
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.

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

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.

1.11
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.

1.12
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.

1.13
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.

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.

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
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 and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.14
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.

1.15
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.

1.16
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.

1.17
Retirement benefits

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

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.18
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 leased asset are consumed.

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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Accrued income

A key area where judgement is required is the revenue recognition on contracts in progress at the year end. Each contract is reviewed on an individual basis and judgement applied to the value of revenue taken to the Consolidated Statement of Comprehensive income by reference to costs incurred to date and the forecast profitability of the contract.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Contracting services and civil engineering works
11,987,342
11,386,954
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,987,342
11,386,954
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 23 -
2023
2022
£
£
Other revenue
Interest income
2,241
449
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional Item
70,863
128,421
70,863
128,421

During the year professional fees of £70,863 (2022: £128,421) were incurred in relation to the ongoing refinancing of the business.

5
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging:
Depreciation of owned tangible fixed assets
79,689
88,744
Amortisation of intangible assets
576,135
576,135
Operating lease charges
264,222
203,056
6
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
15,000
Audit of the financial statements of the company's subsidiaries
25,000
23,000
29,500
38,000
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
7
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 and senior management
10
12
5
5
Administration
34
33
-
-
Site staff
79
77
-
-
Total
123
122
5
5

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
5,472,167
4,779,957
-
0
-
0
Social security costs
557,240
533,868
-
-
Pension costs
112,161
99,536
-
0
-
0
6,141,568
5,413,361
-
0
-
0
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
308,774
237,579
Company pension contributions to defined contribution schemes
1,640
3,464
310,414
241,043
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
104,849
96,360
Company pension contributions to defined contribution schemes
51
324
104,900
96,684

Key management personnel's compensation totalled £310,414 (2022: £241,043)

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,241
449
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
52,775
47,707
Other interest on financial liabilities
945,785
1,260,139
Interest on finance leases and hire purchase contracts
6,677
-
Total finance costs
1,005,237
1,307,846
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
3,218
UK income tax
-
(90,481)
Total current tax
-
0
(87,263)
Deferred tax
Origination and reversal of timing differences
(90,479)
-
0
Total tax credit
(90,479)
(87,263)

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

2023
2022
£
£
Loss before taxation
(1,328,109)
(1,969,008)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(312,371)
(374,112)
Tax effect of expenses that are not deductible in determining taxable profit
261,496
63,407
Change in unrecognised deferred tax assets
(39,604)
241,940
Adjustments in respect of prior years
-
0
3,218
Effect of change in corporation tax rate
-
(21,716)
Taxation credit
(90,479)
(87,263)
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
12
Intangible fixed assets
Group
Goodwill
Customer relationships
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
2,096,760
4,273,322
6,370,082
Amortisation and impairment
At 1 January 2023
1,539,600
3,255,312
4,794,912
Amortisation charged for the year
214,209
361,926
576,135
At 31 December 2023
1,753,809
3,617,238
5,371,047
Carrying amount
At 31 December 2023
342,951
656,084
999,035
At 31 December 2022
557,160
1,018,010
1,575,170
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Other fixed assets
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
152,428
332,777
97,842
338,576
112,125
1,033,748
Additions
-
0
5,032
-
0
10,570
-
0
15,602
At 31 December 2023
152,428
337,809
97,842
349,146
112,125
1,049,350
Depreciation and impairment
At 1 January 2023
107,274
244,978
78,848
247,808
48,471
727,379
Depreciation charged in the year
15,273
24,778
4,087
21,340
14,211
79,689
At 31 December 2023
122,547
269,756
82,935
269,148
62,682
807,068
Carrying amount
At 31 December 2023
29,881
68,053
14,907
79,998
49,443
242,282
At 31 December 2022
45,154
87,799
18,994
90,768
63,654
306,369

Included in the above value of fixed assets are assets held under finance leases or hire purchase contracts with a net book value of £42,431 (2022: £96,456).

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
-
0
-
0
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
1
Impairment
At 1 January 2023 and 31 December 2023
1
Carrying amount
At 31 December 2023
-
At 31 December 2022
-
15
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
Indirect
MCP Environmental Limited
South Bradford Trading Estate, Spartan Road, Low Moor, Bradford, West Yorkshire, England, BD12 0RY
Payroll Services
Ordinary
0
100.00
MCP Environmental Services Limited
Enviro House, Spartan Road, Low Moor, Bradford, West Yorkshire, England, BD12 0RY
Non-Trading
Ordinary
0
100.00
MCP Environmental Group Limited
Enviro House, Spartan Road, Low Moor, Bradford, West Yorkshire, England, BD12 0RY
Holding Company
Ordinary
100.00
-
McHale Contracts and Plant Environmental LLP
South Bradford Trading Estate, Spartan Road, Low Moor, Bradford, West Yorkshire, England, BD12 0RY
Contract Services
N/A
0
100.00
16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
177,479
130,201
-
-
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,177,577
1,436,386
-
0
-
0
Corporation tax recoverable
2
2
-
0
-
0
Amounts owed by group undertakings
-
-
3,437,071
443,862
Other debtors
711,602
83,649
-
0
-
0
Prepayments and accrued income
399,895
1,111,942
-
0
-
0
2,289,076
2,631,979
3,437,071
443,862
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
21
31,010
44,098
-
0
-
0
Other borrowings
20
8,563,858
10,807,797
-
0
-
0
Trade creditors
824,166
572,742
120,000
122,641
Amounts owed to group undertakings
-
0
-
0
1,900
-
0
Corporation tax payable
-
0
3,218
-
0
-
0
Other taxation and social security
530,253
967,053
-
-
Other creditors
760,199
148,192
-
0
-
0
Accruals and deferred income
392,082
677,423
-
0
-
0
11,101,568
13,220,523
121,900
122,641

Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

 

Other Creditors relate to an invoice discounting balance of £760,199 (2022: £148,192) which is secured on certain trade debtors of the LLP.

19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
21
-
0
31,010
-
0
-
0
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Loans from related parties
5,696,264
5,170,896
-
0
-
0
Other loans
2,867,594
5,636,901
-
0
-
0
8,563,858
10,807,797
-
-
Payable within one year
8,563,858
10,807,797
-
0
-
0

The loans with related parties are with Beechbrook Mezzanine II GP LP, a related party and attracts both cash interest and capitalised accrued interest. Cash interest is charged at a rate of 6.5% plus SONIA rate and is paid quarterly in arrears. Capital accrued interest is charged at a rate of 5.5% and is compounded on a quarterly basis. In the year, the capital repayments against the principal loan were Nil. (2022: Nil)

 

The other loans amount pending relates to interest incurred on the loan agreement that started in October 2015 with Beechbrook Mezzanine II GP LP and GIL Investments Limited. The underlying debt has been converted into preference shares in MCP Environmental Holdings Limited during the year.

 

Loan notes owing to Beechbrook Mezzanine II GP LP amounting to £2,373,100 were converted to preference shares during the year.

 

Loan notes owing to GIL Investments Limited amounting to £625,000 were converted to preference shares during the year.

 

Both Beechbrook Mezzanine II GP LP and GIL Investments Limited are related parties as they hold shares in MCP Environmental Holdings Limtied,

 

21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
31,010
44,098
-
0
-
0
In two to five years
-
0
31,010
-
0
-
0
31,010
75,108
-
-

Finance lease payments represent rentals payable by the limited liability partnership for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
22
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
164,021
254,502
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
254,502
-
Credit to profit or loss
(90,481)
-
Liability at 31 December 2023
164,021
-

The deferred tax liability set out above is expected to reverse within 2 years and relates to accelerated capital allowances that are expected to mature within the same period.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
112,161
99,536

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.

24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Shares of £1 each
200,000
200,000
200,000
200,000
B Shares of £1 each
100,000
100,000
100,000
100,000
C Shares of £1 each
22,667
22,667
22,667
22,667
322,667
322,667
322,667
322,667
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Share capital
(Continued)
- 31 -
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference Shares of £1 each
2,998,100
-
2,998,100
-
Preference shares classified as equity
2,998,100
-
Total equity share capital
3,320,767
322,667

Ordinary Shares A , B & C

Each share has full rights in the company with respect to voting, dividends and distributions.

 

Preference Shares

The Preference shares shall not be entitled to participate in any dividend.

 

On a return of capital of the company on a liquidation of the company or otherwise, the surplus assets and retained profits of the company available for distribution after payment of all liabilities are distributed to the Preference Shareholders first, up to an amount equal to the subscription price of such Preference Shares.

 

The company may at any time with the consent of the Beechbrook Lead Investor redeem all or some of the Preference Shares then outstanding.

 

The Preference Shareholders do not receive notice of or to attend, speak or to vote at any general meeting of the company.

25
Financial commitments, guarantees and contingent liabilities

Beechbrook Mezzanine II GP LP has a fixed and floating charge over the assets of the business. Leszek Litwinowicz has a fixed and floating charge over certain assets of the business.

 

On the 8th February 2023, as part of extending loan facilities to the wider group, Beechbrook Mezzanine II Jersey obtained a fixed and floating charge covering all propertis and undertakings of the ultimate parent company MCP Environmental Holdings Ltd.

26
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
185,781
264,203
185,781
264,203
Between two and five years
187,246
373,206
187,246
373,206
373,027
637,409
373,027
637,409
MCP ENVIRONMENTAL HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
27
Events after the reporting date

On 24 March 2024 GIL Investments waived all their rights to outstanding interest payments totalling £120,000 that was included in trade creditors at the year end. They also waived their rights to accrued interest included in creditors:other borrowings totalling £472,212.

28
Controlling party

The ultimate controlling party of MCP Environmental Holdings Limited is Beachbrook Capital LLP.

29
Parental exemption from audit

For the year ended 31 December 2023, MCP Environmental Limited, MCP Environmental Group Limited, and MCP Environmental Services Limited have taken exemption under Section 479A of the Companies Act 2006 from the requirement to undergo a statutory financial audit of their financial statements.

30
Cash generated from group operations
2023
2022
£
£
Loss for the year after tax
(1,237,630)
(1,881,745)
Adjustments for:
Taxation credited
(90,479)
(87,263)
Finance costs
1,005,237
1,307,846
Investment income
(2,241)
(449)
Amortisation and impairment of intangible assets
576,135
576,135
Depreciation and impairment of tangible fixed assets
79,689
88,744
Movements in working capital:
(Increase)/decrease in stocks
(47,278)
12,656
Decrease/(increase) in debtors
342,903
(7,462)
(Decrease)/increase in creditors
(506,497)
263,662
Cash generated from operations
119,839
272,124
31
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
188,889
455,871
644,760
Borrowings excluding overdrafts
(10,807,797)
2,243,939
(8,563,858)
Obligations under finance leases
(75,108)
44,098
(31,010)
(10,694,016)
2,743,908
(7,950,108)

During the year, £2,998,100 worth of debt as loans within MCP Environmental Group Limited was converted to £2,998,100 preference shares in MCP Environmental Holdings Limited.

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