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Registration number: 08635354

Lapwing UK. Ltd

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Lapwing UK. Ltd

Contents

Company Information

1

Strategic Report

2

Directors' Report

3 to 4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 8

Profit and Loss Account

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12 to 24

 

Lapwing UK. Ltd

Company Information

Directors

Dwayne Ball

James Richard Ball

Registered office

Unit 3 Dadge Road
Keytec East Business Park
Pershore
WR10 2NX

Auditors

Hazlewoods LLP
Staverton Court
Staverton
Cheltenham
GL51 0UX

 

Lapwing UK. Ltd

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is wholesale of machine tools.

Fair review of the business

The company provides top-quality construction tools, site suppliers and consumables across the UK. The company benefits from a broad customer base of businesses within the civil engineering, utilities, ground working and highway maintenance industries.

The results for the year which are set out in the profit and loss account show turnover of £18,152,772 (2022 - £18,077,638) and an operating profit of £1,351,578 (2022 - £1,706,440). At 31 December 2023, the company had net assets of £7,291,758 (2022 - £7,067,247). The directors consider the performance for the year and the financial position at the year end to be satisfactory.

The company's key financial and other performance indicators during the year were as follows:

 

Unit

2023

2022

Revenue

£

18,152,772

18,077,638

Operating profit

£

1,351,578

1,706,440

Net assets

£

7,291,758

7,067,247

Principal risks and uncertainties

The principal risks to the company are set out below. A risk management policy has been established and the directors are closely involved in running the business and are proactive in identifying and responding to relevant risks.

Competition
The company operates in a competitive market which is subject to pricing pressure from customers as well as their competitors. The company adapts accordingly to changes in the market place and seeks new markets to reduce the threat of competition.

Supply chain management
Inventory management is key to the business and it must continue to ensure it maintains a responsive and flexible supply chain. The company have a large product portfolio and number of suppliers which aids in minimising supply chain disruption.

Foreign exchange
The company acquires a proportion of its inventory in both Euros and US Dollars. The company in part mitigates this risk by matching receipts and payments in currency and through short- and medium-term cash flow planning.

Approved by the Board on 1 August 2024 and signed on its behalf by:


Dwayne Ball
Director

 

Lapwing UK. Ltd

Directors' Report for the Year Ended 31 December 2023

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

Directors of the company

The directors who held office during the year were as follows:

Dwayne Ball

James Richard Ball

Financial instruments

Objectives and policies

The company's financial instruments comprise cash and liquid resources, and various other items such as trade debtors, trade creditors etc. that arise directly from its operations. The main purpose of these financial instruments is to finance the operations of the company. The main risks arising from the company's operations are set out below:

Price risk, credit risk, liquidity risk and cash flow risk

Price risk
Price risk is the risk that price changes will cause financial losses for the company. Through careful monitoring of the company's market place and competitors the company's exposure to price risk is kept to a minimum.

Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation. The company makes sales on credit terms to a number of its customers. Before such terms are agreed an assessment of the customers credit rating is undertaken to ensure that customers do not represent a major credit risk to the company. Credit limits are then set accordingly. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company held cash of £1,771,566 at the year end date. The directors constantly monitor cash flows to ensure that the company has sufficient liquid resources to meet its operational requirements.

Cash flow risk
Cash flow risk is the risk that inflows and outflows of cash and cash equivalents will not be sufficient to finance day-to-day operations of the company. The company manages cash flow by active management of working capital and negotiating terms with customers and suppliers to maintain available funds to meet its liabilities as they fall due.

Future developments

The directors remain hopeful that the business can grow and that the business performance can be maintained, despite the challenging economic headwinds.

The government has indicated it will support infrastructure investment, which in turn should benefit the construction market. A potential stagnation in sales of residential property from increased interest rates may have a knock on effect for many areas of the construction industry.

Interest rates could increase further, but the impact of the cost of borrowing for the business is expected to be limited.

Going concern

Forecasts have been prepared that reflect estimates of future performance. As at 31 December 2023, the company had net assets of £7,291,758 (2022 - £7,067,247) and access to cash reserves of £1,771,566 (2022 - £1,226,191). Based on forecasts prepared and the funds available, the directors believe that there are sufficient resources for the company to continue business for at least 12 months post signing of the financial statements. As such, the directors believe it is appropriate for the financial statements to be prepared on the going concern basis.

 

Lapwing UK. Ltd

Directors' Report for the Year Ended 31 December 2023

Directors' liabilities

The company has indemnified, by means of directors’ and officers’ liability insurance, the directors of the company against liability in respect of proceedings brought by third parties, subject to the conditions set out in section 234 of the Companies Act. Such qualifying third party indemnity provision was in force during the year and is in force at the date of approving the Directors’ Report.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

The auditors Hazlewoods LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved by the Board on 1 August 2024 and signed on its behalf by:


Dwayne Ball
Director

 

Lapwing UK. Ltd

Statement of Directors' Responsibilities

The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.

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

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards has been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

 

Lapwing UK. Ltd

Independent Auditor's Report to the Members of Lapwing UK. Ltd

Opinion

We have audited the financial statements of Lapwing UK. Ltd (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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

Conclusions relating to going concern

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

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

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

 

Lapwing UK. Ltd

Independent Auditor's Report to the Members of Lapwing UK. Ltd

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of 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 Statement of Directors' Responsibilities set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We considered the nature of the company’s industry and its control environment and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the company operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

In common with all audits carried out in accordance with ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

 

Lapwing UK. Ltd

Independent Auditor's Report to the Members of Lapwing UK. Ltd

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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

Use of this 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.





Paul Fussell (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Staverton Court
Staverton
Cheltenham
GL51 0UX

2 August 2024

 

Lapwing UK. Ltd

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
 £

2022
 £

Turnover

3

18,152,772

18,077,638

Cost of sales

 

(13,092,959)

(13,136,395)

Gross profit

 

5,059,813

4,941,243

Administrative expenses

 

(3,725,431)

(3,284,803)

Other operating income

4

17,196

50,000

Operating profit

5

1,351,578

1,706,440

Other interest receivable and similar income

6

27,164

68,692

Interest payable and similar charges

7

(29,356)

(31,118)

Profit before tax

 

1,349,386

1,744,014

Taxation

11

(368,875)

(358,512)

Profit for the financial year

 

980,511

1,385,502

The above results were derived from continuing operations.

The company has no other comprehensive income for the year.

 

Lapwing UK. Ltd

(Registration number: 08635354)
Balance Sheet as at 31 December 2023

Note

2023
 £

2022
 £

Fixed assets

 

Intangible assets

12

23,146

29,761

Tangible assets

13

2,490,134

2,295,452

 

2,513,280

2,325,213

Current assets

 

Stocks

14

2,260,858

2,089,711

Debtors

15

3,333,955

4,665,953

Cash at bank and in hand

1,771,566

1,226,191

 

7,366,379

7,981,855

Creditors: Amounts falling due within one year

16

(2,294,690)

(2,461,369)

Net current assets

 

5,071,689

5,520,486

Total assets less current liabilities

 

7,584,969

7,845,699

Creditors: Amounts falling due after more than one year

16

-

(586,068)

Provisions for liabilities

(293,211)

(192,384)

Net assets

 

7,291,758

7,067,247

Capital and reserves

 

Called up share capital

19

115

600,115

Capital redemption reserve

20

600,000

-

Profit and loss account

20

6,691,643

6,467,132

Total equity

 

7,291,758

7,067,247

Approved and authorised by the Board on 1 August 2024 and signed on its behalf by:
 


Dwayne Ball
Director

 

Lapwing UK. Ltd

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Capital redemption reserve
£

Profit and loss account
£

Total
£

At 1 January 2023

600,115

-

6,467,132

7,067,247

Profit for the year

-

-

980,511

980,511

Dividends

-

-

(156,000)

(156,000)

Deferred share capital redeemed in the year

(600,000)

600,000

(600,000)

(600,000)

At 31 December 2023

115

600,000

6,691,643

7,291,758

Share capital
£

Profit and loss account
£

Total
£

At 1 January 2022

600,115

5,241,630

5,841,745

Profit for the year

-

1,385,502

1,385,502

Dividends

-

(160,000)

(160,000)

At 31 December 2022

600,115

6,467,132

7,067,247

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Unit 3 Dadge Road
Keytec East Business Park
Pershore
WR10 2NX
United Kingdom

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Summary of disclosure exemptions

Lapwing UK. Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect of its financial statements. Exemptions have been taken in relation to the preparation of a statement of cash flows and financial instruments.

Name of parent of group

These financial statements are consolidated in the financial statements of Lapwing Holdco Ltd.

The financial statements of Lapwing Holdco Ltd may be obtained from the company's registered office.

Going concern

Forecasts have been prepared that reflect estimates of future performance. As at 31 December 2023, the company had net assets of £7,291,758 (2022 - £7,067,247) and access to cash reserves of £1,771,566 (2022 - £1,226,191). Based on forecasts prepared and the funds available, the directors believe that there are sufficient resources for the company to continue business for at least 12 months post signing of the financial statements. As such, the directors believe it is appropriate for the financial statements to be prepared on the going concern basis.

Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Judgements

No significant judgements have been made by management in preparing these financial statements.

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

Turnover is recognised when its value can be measured reliably, it is probable that future economic benefits will flow to the entity and the cost incurred in relation to the transaction can be specific measured reliably.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Motor vehicles

33% reducing balance

Furniture, fittings and equipment

25% reducing balance

Land

Not depreciated

Long leasehold property improvements

10 years straight line

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Intangible assets

Software developments costs are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10 years straight line

Software development costs

5 years straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the average cost method.

The cost of finished goods and work in progress comprises direct materials and those overheads that have been incurred in bringing the inventories to their present location and condition.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

A non-financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

3

Turnover

The analysis of the company's turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

18,152,772

18,077,638

The analysis of the company's turnover for the year by market is as follows:

2023
£

2022
£

UK

18,152,772

18,077,638

 

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
£

2022
£

Miscellaneous other operating income

17,196

50,000

 

5

Operating profit

Arrived at after charging:

2023
 £

2022
 £

Depreciation expense

436,782

360,761

Amortisation expense

6,615

3,313

Operating lease expense - other

19,782

16,093

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

6

Other interest receivable and similar income

2023
£

2022
£

Interest income on loans to related parties

12,169

67,627

Interest income on bank deposits

14,995

1,065

27,164

68,692

 

7

Interest payable and similar expenses

2023
£

2022
£

Interest expense on other finance liabilities

29,356

31,118

 

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

2,541,801

1,934,728

Social security costs

282,753

232,954

Pension costs, defined contribution scheme

29,569

25,114

2,854,123

2,192,796

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Sales, marketing and distribution

63

50

 

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

180,000

179,500

Contributions paid to money purchase schemes

1,321

1,321

181,321

180,821

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

10

Auditor's remuneration

2023
£

2022
£

Audit of the financial statements

24,375

25,000

Other fees to auditors

Taxation compliance services

4,725

4,500

All other non-audit services

1,650

1,650

6,375

6,150


 

 

11

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

269,690

294,785

UK corporation tax adjustment to prior periods

(1,643)

(6,637)

268,047

288,148

Deferred taxation

Arising from origination and reversal of timing differences

89,634

62,485

Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods

11,194

7,879

Total deferred taxation

100,828

70,364

Tax expense in the profit and loss account

368,875

358,512

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 23.52% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

1,349,386

1,744,014

Corporation tax at standard rate

317,383

331,363

Effect of expense not deductible in determining taxable profit (tax loss)

5,607

7,254

UK deferred tax expense relating to changes in tax rates or laws

5,305

3,905

Decrease in current tax from unrecognised temporary difference from a prior period

(1,643)

(6,637)

Deferred tax expense from unrecognised temporary difference from a prior period

11,194

7,879

Tax increase from effect of capital allowances and depreciation

31,029

14,748

Total tax charge

368,875

358,512

Deferred tax

Deferred tax assets and liabilities

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

2023

Liability
£

Fixed asset timing difference

293,653

Short term timing differences

(442)

293,211

2022

Liability
£

Fixed asset timing difference

192,384

 

12

Intangible assets

Goodwill
 £

Software development costs
 £

Total
£

Cost

At 1 January 2023

670,000

33,074

703,074

Amortisation

At 1 January 2023

670,000

3,313

673,313

Amortisation charge

-

6,615

6,615

At 31 December 2023

670,000

9,928

679,928

Carrying amount

At 31 December 2023

-

23,146

23,146

At 31 December 2022

-

29,761

29,761

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

13

Tangible assets

Furniture, fittings and equipment
 £

Motor vehicles
 £

Long leasehold property
 £

Total
£

Cost

At 1 January 2023

791,376

475,396

1,903,716

3,170,488

Additions

22,500

574,925

-

597,425

Acquired through business combinations

24,161

23,000

-

47,161

Disposals

-

(25,000)

-

(25,000)

At 31 December 2023

838,037

1,048,321

1,903,716

3,790,074

Depreciation

At 1 January 2023

525,151

147,559

202,326

875,036

Charge for the year

72,296

212,742

151,744

436,782

Eliminated on disposal

-

(11,878)

-

(11,878)

At 31 December 2023

597,447

348,423

354,070

1,299,940

Carrying amount

At 31 December 2023

240,590

699,898

1,549,646

2,490,134

At 31 December 2022

266,225

327,837

1,701,390

2,295,452

A loan in Lapwing Holdco Limited with a carrying amount of £1,279,454 (2022 - £1,345,728) is secured by a fixed charge over the long leasehold property of the Lapwing UK. Ltd.

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

14

Stocks

2023
£

2022
£

Finished goods and goods for resale

2,260,858

2,089,711

 

15

Debtors

Note

2023
 £

2022
 £

Trade debtors

 

2,534,250

2,680,453

Amounts owed by related parties

23

90,977

1,490,072

Amounts owed by group undertakings

 

119,113

119,113

Other debtors

 

19,254

26,097

Prepayments

 

431,764

350,218

Corporation tax asset

11

138,597

-

Total current trade and other debtors

 

3,333,955

4,665,953

 

16

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

17

13,461

287,448

Trade creditors

 

1,689,205

1,443,090

Social security and other taxes

 

285,960

316,642

Outstanding defined contribution pension costs

 

2,472

2,811

Other creditors

 

86,913

64,344

Accrued expenses

 

216,679

143,679

Corporation tax liability

11

-

203,355

 

2,294,690

2,461,369

Due after one year

 

Loans and borrowings

17

-

586,068

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

17

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank borrowings

-

90,233

Other borrowings

13,461

197,215

13,461

287,448

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

-

225,581

Other borrowings

-

360,487

-

586,068

Bank borrowings comprised a Coronavirus Business Interruption Loan ('CBILS') of £nil (2022 - £315,814). The loan was repayable in 59 equal instalments of £8,333 that commenced in July 2021. Following a £35,000 repayment in November 2022, it was repayable in 42 equal instalments of £7,519 as at 31 December 2022. The outstanding loan balance of £249,620 was repaid in full in October 2023. Interest was payable monthly from July 2021 at a rate of 3.99% per annum over the Bank of England base rate.

Other borrowings comprise directors' loan accounts with a carrying amount of £13,461 (2022 - £557,702).

In January 2022, a director advanced the company £575,000 under a specific loan agreement. The loan carried a nominal interest rate of 3.5%. The loan was repayable in monthly instalments of £10,915 with the final instalment due in February 2027. The loan has been voluntarily repaid in full during the year. At the balance sheet date the carrying amount of the loan is £nil (2022 - £486,007).

Director loans of £13,461 (2022 - £71,695) are repayable on demand and carry no interest.

 

18

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £29,569 (2022 - £25,114).

Contributions totalling £2,472 (2022 - £2,811) were payable to the scheme at the end of the year and are included in creditors.

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

19

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

100

100

100

100

Ordinary A shares of £1 each

4

4

4

4

Ordinary B shares of £1 each

1

1

1

1

Ordinary C shares of £1 each

4

4

4

4

Ordinary D shares of £1 each

1

1

1

1

Ordinary E shares of £1 each

5

5

5

5

Deferred shares of £1 each

-

-

600,000

600,000

 

115

115

600,115

600,115

All Ordinary shares rank pari passu in all respects, carry full voting rights and right to distributions.

In September 2023, the company redeemed the 600,000 deferred shares at their par value of £600,000.

Deferred shares redeemed in the year carried no right to vote and were entitled to dividends equal to a sum determined by the directors of the company. The carry right to capital up to the amount paid on each share and are redeemable on notice by the company.

 

20

Reserves

Called up share capital

This represents the nominal value of the issued share capital.

Capital redemption reserve

This represents a non-distributable reserve which comprises amounts transferred following the redemption of the company's own shares.

Profit and loss account

This distributable reserve represents the cumulative profits or losses, net of dividends and other adjustments.

 

21

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

93,729

7,796

Later than one year and not later than five years

341,022

3,898

434,751

11,694

The amount of non-cancellable operating lease payments recognised as an expense during the year was £19,782 (2022 - £16,093).

 

Lapwing UK. Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

 

22

Dividends

2023
 £

2022
 £

Dividends paid

156,000

160,000



 

 

23

Related party transactions

Transactions with directors
At the balance sheet date the directors were owed £13,461 (2022 - £557,702) by the company.

Transactions with related parties
At the balance sheet date the amount due to a shareholder of the wider group and close family member of the directors was £nil (2022 - £nil).

At the balance sheet date the amount due from close family members of the directors was £nil (2022 - £nil).

During the year sales of £724,401 (2022 - £1,811,606), management and interest charges of £12,169 (2022 - £67,127) were made to and purchases of £413,054 (2022 - £591,592) were made from companies under common ownership. Advances of £nil (2022 - £430,000) and repayments of £1,490,114 (2022 - £260,000) were also made during the year. As at the balance sheet date the amount due from these companies was £90,977 (2022 - £1,490,072).

Summary of transactions with key management

Key management personnel are considered to be the directors of the company and key management personnel compensation is disclosed in note 9 to the financial statements.

 

24

Parent and ultimate parent undertaking

The company's immediate parent is Lapwing Holdco Ltd, incorporated in the United Kingdom.

  These financial statements are available upon request from Unit 3 Dadge Road, Keytec East Ind. Est., Pershore, England, WR10 2NX