REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
WATKINS DISTRIBUTION UK LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
WATKINS DISTRIBUTION UK LIMITED |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Statement of Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
WATKINS DISTRIBUTION UK LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
Chartered Accountants |
and Statutory Auditors |
34-40 High Street |
Wanstead |
London |
E11 2RJ |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
2023 was another difficult year for the company, with adverse trading conditions, driven by the UK cost of living crisis, leading to a decline in turnover to £7.7m from £10.6m, a fall of 27.8%. |
Due to a change in sales mix and the decline in retail customer sales, gross profit fell by 4.51%. |
During the year the company closed 3 of its branches, taking to total number to 8. |
The key performance indicators during the year were as follows: |
2023 | 2022 |
£ | £ |
Turnover | 7,691,858 | 10,646,654 |
Gross profit | 1,826,953 | 3,008,511 |
Gross profit margin | 23.75% | 28.26% |
Operating (loss)/profit | (1,666,911) | (652,395) |
At the balance sheet date the company had net current liabilities of £607,504 (2022: Net Current Assets £1,342,174) and a balance sheet deficit of £361,192 (2022: Net Assets £1,523,628). |
Further information in relation to this and going concern is provided on page 4. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The management of the business and the nature of the company's strategy are subject to a number of risks. |
The Directors are of the opinion that a thorough risk management process is adopted which involves a formal review of all risks identified below. Where possible, processes are in place to mitigate such risks. |
Loss of sales volume |
Whilst the company has a diverse customer base, there is an ongoing risk that a decline in sales volumes has an adverse impact on the company's trading results. The company attempts to mitigate this risk by establishing long term relationships with its key customers. These relationships are strengthened through a focus on providing exceptional levels of customer service, comprehensive and reliable after sales support and attractive products that are designed to meet the needs of the end user. |
Loss of key manufacturing partner |
The company has an exclusive relationship with Watkins Manufacturing Corporation which falls within the Masco Corporation group of companies; and the failure of this key manufacturing partner could lead to a temporary shortage of certain products. The company also holds appropriate levels of safety stock to mitigate any manufacturing failures of the key manufacturing partner if required. |
Market changes |
The company operates in a competitive environment and is dependent on the level of Wellness Products required by it's customer base. If market conditions worsened then the demand for our products would reduce and have an adverse effect on our profitability. The management continually review the products and strategy of the business in light of changing market conditions. |
Financial risks |
The company is exposed to a variety of financial risks, including the effect of changes in exchange rates. The company does not forward buy foreign currency to manage this risk and so is exposed to volatility in the profit and loss account due to rate changes. |
Inflation and the cost of living crisis |
Global inflationary pressures that have arisen following the outbreak of the war in Ukraine continue to represent the |
largest risk to the business. These pressures are seen most clearly in relation to wages costs, utilities and general cost price inflation. |
Liquidity risk |
The Company makes use of a group cash pooling facility with its fellow group companies in order to mitigate short term liquidity risk. The Directors continually monitor cash flow forecasts in order to further manage this risk over the short and medium term. |
ON BEHALF OF THE BOARD: |
17 September 2024 |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company during the year was to retail Spas and Aquatic Fitness Systems (AQF) to the general public and trade customers. |
GOING CONCERN |
The accounts have been prepared on a going concern basis despite the trading loss for the year and balance sheet deficit. |
The company is party to a cashpooling arrangement with fellow group companies that provides up to £5,000,000 of funding until 31 December 2028. Based on the worst case scenario forecasts produced for the years ending 31 December 2024 and 31 December 2025, the company is expected to have significant cash headroom and will therefore have sufficient resources to meet its liabilities as they fall due. |
The company has also received a letter of support from its parent company, Masco Corporation Limited, to continue |
to provide financial assistance as required. |
The Directors are also reviewing the business and its operations to explore the potential for new revenue streams and address the losses. |
In light of this, the accounts have been prepared on a going concern basis. |
DIVIDENDS |
There were no dividends paid in the year (2022: £nil) and the Directors do not recommend the payment of a final dividend (2022: £nil). |
FUTURE DEVELOPMENTS |
With regards to addressing future developments; the company has reacted to sales fall and losses by carrying out a review of its sales staff and offices. This has included: |
- Closure of the Reading office in November which had a 6 month break clause on the lease. |
- Reduction of headcount at the Ashford and Nottingham Showrooms. |
- Brand new freshwater IQ product that has been trialled with some of our Dealer customers and has received positive feedback. |
- Launching a new product range called "White Label" which will be our own in-house branding and logo with the products manufactured by a third party. |
- Plans to open a new store location in Derby are still on-going; it is hoped that the process will be completed in November 2024. |
DIRECTORS |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | 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. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, THP Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
WATKINS DISTRIBUTION UK LIMITED |
Opinion |
We have audited the financial statements of Watkins Distribution Uk Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, 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 loss 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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 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 the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
WATKINS DISTRIBUTION UK LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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. |
Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the Company through discussions with Directors and other |
management, and from our commercial knowledge and experience of the sector in which the Company operates; |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation, GDPR and data protection, anti-money laundering and anti-bribery, contract and employment law. |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of |
management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to |
instances of non-compliance throughout the audit. |
We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of |
actual, suspected and alleged fraud; and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of |
potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC and any other relevant regulators as required. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
WATKINS DISTRIBUTION UK LIMITED |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants |
and Statutory Auditors |
34-40 High Street |
Wanstead |
London |
E11 2RJ |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
STATEMENT OF COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
OPERATING LOSS | 5 | ( |
) | ( |
) |
Interest payable and similar expenses | 6 |
LOSS BEFORE TAXATION | ( |
) | ( |
) |
Tax on loss | 7 | ( |
) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 |
Tangible assets | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT (LIABILITIES)/ASSETS | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
( |
) |
CAPITAL AND RESERVES |
Called up share capital | 14 |
Share premium | 15 |
Retained earnings | 15 | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) |
The financial statements were approved by the Board of Directors and authorised for issue on |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2023 | ( |
) | ( |
) |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Watkins Distribution Uk Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | STATEMENT OF COMPLIANCE |
3. | ACCOUNTING POLICIES |
Basis of preparing the financial statements and going concern |
The accounts have been prepared on a going concern basis despite the trading loss for the year and balance sheet deficit. |
The company is party to a cashpooling arrangement with fellow group companies that provides up to £5,000,000 of funding until 31 December 2028. Based on the worst case scenario forecasts produced for the years ending 31 December 2024 and 31 December 2025, the company is expected to have significant cash headroom and will therefore have sufficient resources to meet its liabilities as they fall due. |
The company has also received a letter of support from its parent company, Masco Corporation Limited, to continue to provide financial assistance as required. |
The Directors are also reviewing the business and its operations to explore the potential for new revenue streams and address the losses. |
In light of this, the accounts have been prepared on a going concern basis. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 3.17(d). |
Critical accounting judgements and key sources of estimation uncertainty |
Judgements in applying accounting policies and key sources of estimation uncertainty |
The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The key estimate of the company is as follows: |
Stock provisioning |
The company sources hot tubs and related accessories from a related company in the US. Although the business is virtually supply to order it is still subject to changing consumer demands. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of finished goods. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Revenue recognition |
Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Sales of goods are recognised on sale to the customer, which is considered to be the point of delivery and when the significant risks and rewards of the goods have been passed to the customer. |
Goodwill |
On 30 November 2016, the company acquired two showrooms from Hot Tub Barn Limited. Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's Interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. |
Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life of 10 years. |
Tangible fixed assets |
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
Depreciation is provided on the following basis: |
Long term leasehold property - Term of the lease |
Plant and machinery - 15% straight line |
Motor vehicles - 4 years |
Fixtures and fittings- 15% straight line |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount |
and are recognised in profit or loss. |
Stocks |
Stocks are stated at the lower of cost and selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. |
At each reporting date, stocks are assessed for impairment. If stock is 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. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred taxation |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Operating leases: the company as lessee |
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term. |
Pensions |
Defined contribution pension plan |
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. |
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds. |
Debtors |
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
Group relief |
Group relief is surrendered to/received from other group companies for no consideration. |
In specific circumstances, individual group companies may reach agreement between themselves to surrender and/or receive group relief for consideration. |
Such agreements usually run for 5 years before being subject to review. |
Should group relief be surrendered to/received from other group companies for consideration, the consideration paid will reflect, at a minimum, the corporation tax amounts surrendered and/or received. |
These amounts are reported as expenses or benefits within the tax on profit/(loss) on ordinary activities within the Statement of Comprehensive Income. |
On a discretionary basis, group companies may agree to compensate for amounts in excess of the corporation tax amounts surrendered and/or received. In this instance, the excess over the corporation -tax amount is shown as a separate movement within the Statement of Comprehensive Income on the Statement of financial position. |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Sales | 16 | 23 |
Distribution | 5 | 5 |
Administration | 9 | 8 |
The Directors are deemed to be the key management for the purposes of disclosure under FRS102. |
All Directors are remunerated by other group companies, with no costs recharged to the company. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
4. | EMPLOYEES AND DIRECTORS - continued |
2023 | 2022 |
£ | £ |
Directors' remuneration |
5. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
(Profit)/loss on disposal of fixed assets | ( |
) |
Goodwill amortisation |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Group undertaking interest |
7. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the loss for the year was as follows: |
2023 | 2022 |
£ | £ |
Deferred tax | ( |
) |
Tax on loss | ( |
) |
UK corporation tax has been charged at 25% (2022 - 19%). |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Loss before tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2022 - |
( |
) |
( |
) |
Effects of: |
Expenses not deductible for tax purposes | ( |
) |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Utilisation of tax losses |
Deferred tax | 42,718 | (900 | ) |
Total tax charge/(credit) | 42,718 | (900 | ) |
All tax losses have been group relieved. |
A deferred tax asset of £9,476 in relation to accelerated depreciation has not been recognised in the accounts due to uncertainty over timing of its receipt. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
8. | INTANGIBLE FIXED ASSETS |
Goodwill |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
Long | Plant and | and | Motor |
leasehold | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
10. | STOCKS |
2023 | 2022 |
£ | £ |
Stocks |
11. | DEBTORS |
2023 | 2022 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Other debtors |
VAT |
Deferred tax asset |
Accelerated capital allowances | - | 42,718 |
Prepayments |
Amounts falling due after more than one year: |
Other debtors |
Aggregate amounts |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | DEBTORS - continued |
Other debtors of £116,533 that were due in more than one year has been reclassified in the comparative figures as they were originally shown within balances due in less than one year. |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
VAT | 23,301 | - |
Other creditors |
Accruals and deferred income |
13. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
The above commitments relate to the showroom and warehouse premises. |
14. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary shares | £1 | 1 | 1 |
15. | RESERVES |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 January 2023 | 1,523,627 |
Deficit for the year | ( |
) | ( |
) |
At 31 December 2023 | ( |
) | (361,193 | ) |
16. | PENSION COMMITMENTS |
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £25,984 (2022: £30,522). Contributions totalling £1,493 (2022: £3,102) were payable to the fund at the reporting date. |
17. | RELATED PARTY DISCLOSURES |
Included in amounts owed to group undertakings is a balance of £3,427,807 (2022: £3,410,000) owed to the parent company under a cash pooling arrangement. The balance is unsecured and repayable on demand or within one year. The outstanding balance is interest bearing at 1% below the relevant base rate, subject to a minimum rate of 0.25%, depending on the denomination of the amount outstanding. |
The facility has a £5,000,000 limit and is due for renewal on or before 31/12/2028. |
WATKINS DISTRIBUTION UK LIMITED (REGISTERED NUMBER: 06667449) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
18. | ULTIMATE CONTROLLING PARTY |
The immediate parent undertaking is Masco Corporation Limited, a company incorporated in the United Kingdom. |
The parent undertaking of the smallest group that prepares group financial statements is Masco Europe S.C.S., a company incorporated in Luxembourg. Copies of the consolidated financial statements may be obtained from the Secretary at Masco Europe S.C.S., Z.I. Rothoicht, JOE Business Center, Entree B, 14, rue Strachen, 6933 Mensdorf, Luxembourg. |
The ultimate parent undertaking is Masco Corporation, a company incorporated in the United States of America, which heads the largest group to consolidate these financial statements. Copies of the consolidated financial statements can be obtained from the Secretary at Masco Corporation,17450 College Pkwy, Livonia, Michigan 48152, United States of America (or via its website at www.masco.com). |
There is no ultimate controlling party. |