Company registration number 01993494 (England and Wales)
NORTH WEST TIMBER TREATMENT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NORTH WEST TIMBER TREATMENT LIMITED
COMPANY INFORMATION
Directors
Mr R W Mayor
Mr S W Mayor
Mr T M Mayor
Mr A P Foster
Company number
01993494
Registered office
NWTT House
Lockett Road
South Lancs Industrial Estate
Wigan
WN4 8DE
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
NORTH WEST TIMBER TREATMENT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 24
NORTH WEST TIMBER TREATMENT 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

The principal activity of the company during the year 2023 has been the supply of timber, garden products and timber treatment along with machining timber and the manufacturing of fence panels.

Fair review of the business

Trading conditions in 2023 have been tough, the cost-of-living crisis, the war in Ukraine, political turmoil in the UK have all contributed to a difficult environment. Despite losses in the year the Directors are pleased with the integration of the two new branches purchased in the prior year.

 

The board has kept close to the marketplace and is planning for the future carefully with prudent caution.

 

Despite difficult trading conditions the company maintained a turnover of £10.1M and a gross margin of 24.2%. A trading loss of £465k has been reported.

 

The company remains compliant with all national living wage requirements. The directors monitor all economic trends.

 

Key performance indicators

The Directors monitor several key performance indicators which are reported regularly in the Management Information pack.

 

These include turnover trends, gross margin which is reported as 24% (2022: 28%) for the year.  Debtor days, with an average of 30 (2022: 32) in the year and stockturn which was every 106 days (2022: 108 days) in the year.

 

Principal risks and uncertainties

The company’s operations are exposed to a variety of financial and environmental risks that could cause actual results to differ materially year on year. Some of these factors are set out below.

 

Business conditions and general economy

The 2023 profitability has been affected by the major downturn in retail sales due to the cost-of-living crisis. The impact of high inflation, growing interest rates and higher energy prices is having a detrimental effect.

 

Commercial risk

The company trades with a number of customers, many either in or contracting too, the construction industry. The failure of customers would impact on the business and possibly its financial position. The company closely monitors its accounts and debtor days to minimise risk.

 

Development and performance

The Ukraine and Russian war continues to have an impact on the timber trade with uncertain energy and fuel costs remaining. This market turbulence has had an impact on profits. However, during 2023 the company has had no problem in maintaining stock levels.

 

The two depot additions in the previous year have now started to perform and contribute to the overall results. They have been fully integrated at all levels including IT systems, management and trading. These branches now sell the full range of product line available across the Group.

 

The company is aware of its environmental responsibility and continues to make significant investments to improve efficiencies in re-cycling and waste management whilst maintaining its ISO14001 accredited system. All managers and Directors have taken ownership to help with the aim of reducing the overall carbon footprint wherever possible.

NORTH WEST TIMBER TREATMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Business conditions and the general economy

The profitability of the company could be adversely affected by the general economic conditions worsening. There is uncertainty surrounding the policies of a new UK government. Although turbulence in global conditions and economics, should not significantly adversely affect profitability, a sustained downturn over several years would likely impact the level of demand for timber and other construction products and therefore potentially impact the company's turnover and profitability. Supply issues from eastern Europe remains risk.

 

Commercial risk

The company trades with several customers, the loss of any of which could cause an impact on future trading. The company works closely with all major customers to maintain relationships and reduces this risk by having a broad customer base.

 

Credit risk

The company derived its income from a variety of customers. The failure of customers could materially impact on the company's financial position. The company closely monitors levels of debt and seeks to keep trade debtor days low to reduce this risk.

Other key performance indicators

The company has the ability to hold appropriate levels of stock and monitors stock usage and market prices along with availability to ensure it remains profitable and agile.

 

The company is aware of its environmental responsibilities and continues to make significant investment to improve efficiency in recycling and waste management. The directors realise their responsibility and continue to improve the company's systems in waste minimisation which can be reflected by the company maintaining its ISO14001 accreditation. All directors have taken ownership of the continuous aim to be a greener, cleaner company in all areas of operation.

Future developments

After the growth in the portfolio of depots in 2022 the company will remain at this level in the immediate future, although the Directors will keep a watching eye on the market for strategically attractive acquisitions. The priority, however, is stability in the current portfolio. Our aim for 2024 is to keep and improve profitability and remain a strong player in our business sector.

 

The Directors would like to thank all the committed employees for making 2023 a positive and productive year

 

On behalf of the board

Mr R W Mayor
Director
24 September 2024
NORTH WEST TIMBER TREATMENT 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.

Principal activities
Results and dividends

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

No ordinary 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 R W Mayor
Mr S W Mayor
Mr T M Mayor
Mr A P Foster
Financial instruments
Risk management

The company's operations expose it to a variety of financial risks that include the effects of changes in debt market prices, credit risk, liquidity risk cash flow risk and interest rate risk. Where relevant the company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs. The company does not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting is applied.

 

Given the size of the company, the director has not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board are implemented by the company's finance department.

 

The director will revisit the appropriateness of this policy should the company's operations change in size or nature.

Auditor

The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as the director is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as director in order to make himself aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Information referred to in the strategic report

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

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

NORTH WEST TIMBER TREATMENT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
Mr R W Mayor
Director
24 September 2024
NORTH WEST TIMBER TREATMENT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

 

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

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him 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.

NORTH WEST TIMBER TREATMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF NORTH WEST TIMBER TREATMENT LIMITED
- 6 -
Opinion

We have audited the financial statements of North West Timber Treatment Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

NORTH WEST TIMBER TREATMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF NORTH WEST TIMBER TREATMENT LIMITED (CONTINUED)
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

 

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

Matters on which we are required to report by exception

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 director determines 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.

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 procedures we carried out and the extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

NORTH WEST TIMBER TREATMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF NORTH WEST TIMBER TREATMENT LIMITED (CONTINUED)
- 8 -

 

Because of the field in which the client operates we identified that employment law, health and safety legislation and compliance with the UK Companies Act are the areas most likely to have a material impact on the financial statements.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

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.

Use of this report

This report is made solely to the company’s member 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 member those matters we are required to state to it 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 member for our audit work, for this report, or for the opinions we have formed.

Paul Locker BSc(Hons) FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
24 September 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
NORTH WEST TIMBER TREATMENT LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
10,118,972
11,369,100
Cost of sales
(7,674,928)
(8,240,713)
Gross profit
2,444,044
3,128,387
Administrative expenses
(2,893,600)
(2,757,419)
Other operating income
500
750
Operating (loss)/profit
4
(449,056)
371,718
Interest receivable and similar income
7
1,032
1,518
Interest payable and similar expenses
8
(17,281)
(11,039)
(Loss)/profit before taxation
(465,305)
362,197
Tax on (loss)/profit
9
98,171
(72,956)
(Loss)/profit for the financial year
(367,134)
289,241
Retained earnings brought forward
5,672,106
5,532,865
Dividends
-
0
(150,000)
Retained earnings carried forward
5,304,972
5,672,106

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

NORTH WEST TIMBER TREATMENT LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
40,897
26,043
Tangible assets
11
3,684,225
3,497,721
3,725,122
3,523,764
Current assets
Stocks
12
1,709,459
1,956,547
Debtors
13
2,044,561
1,715,462
Cash at bank and in hand
300
270,535
3,754,320
3,942,544
Creditors: amounts falling due within one year
14
(1,746,539)
(1,302,129)
Net current assets
2,007,781
2,640,415
Total assets less current liabilities
5,732,903
6,164,179
Creditors: amounts falling due after more than one year
15
(174,173)
(140,144)
Provisions for liabilities
Deferred tax liability
18
253,658
351,829
(253,658)
(351,829)
Net assets
5,305,072
5,672,206
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
5,304,972
5,672,106
Total equity
5,305,072
5,672,206

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
Mr R W Mayor
Director
Company registration number 01993494 (England and Wales)
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

North West Timber Treatment Limited is a private company limited by shares incorporated in England and Wales. The registered office is NWTT House, Lockett Road, South Lancs Industrial Estate, Wigan, WN4 8DE.

1.1
Accounting convention

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

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

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

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

 

 

The financial statements of the company are consolidated in the financial statements of NWTT Holdings Limited. These consolidated financial statements are available from its registered office, NWTT House, Lockett Road, South Lancs Industrial Estate, Ashton-In-Makerfield, WN4 8DE.

1.2
Going concern

The company has faced increasing fuel / energy prices and rising inflation throughout the year and post the balance sheet date, this has been in conjunction with the implications on supply chain and changed in market demands.

 

The directors have put together a budget for FY24 and FY25 which show a return to profitability at both EBITDA and net profit levels. The company is currently trading as expected against these budgets.

 

The directors are continuously assessing the impact of global issues on the market and are considering the flexibility the company requires to both prepare and react to the ever-changing unprecedented circumstances.

 

After considering the impact of the above, at the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Turnover

Turnover represents amounts receivable for goods net of VAT and trade discounts.

 

Turnover is recognised upon delivery of goods to, or collection by, the customer as at this point the significant risks and rewards of ownership of the goods have passed to the buyer. Additionally, 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.

1.4
Intangible fixed assets - goodwill

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.

 

Goodwill over 10 years

1.5
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:

Software
20% per annum straight line
1.6
Tangible fixed assets

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

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

Freehold land and buildings
2.5% per annum straight line
Leasehold land and buildings
Over life of lease
Plant, machinery and equipment
15% per annum reducing balance
Fixtures & fittings
10% per annum reducing balance or 25% straight line
Motor vehicles
25% per annum reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

Recoverable amount is the higher of fair value less costs to sell and value in use.

 

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.

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.

1.8
Stocks

Stocks are stated at the lower of cost and net realisable value. 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.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

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

 

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

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors 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

All of the company's financial assets are basic financial instruments.

NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets

Financial assets 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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and loans from related companies 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 receipts discounted at a market rate of interest.

 

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

 

Trade payables 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 payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

All of the company's financial liabilities are basic financial instruments.

Derecognition of financial liabilities

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

1.11
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.12
Taxation

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

NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Current tax

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

Deferred tax

Deferred tax is recognised in respect of all timing difference that have originated but not reverse at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exception:

 

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

1.13
Employee benefits

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

 

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

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

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

1.15
Leases

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

 

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease.

1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

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

Impairment of stock

At each balance sheet date, the directors undertake a review of stock balances and estimate which, if any, should either be impaired or provided against.

 

This calculation is based on their knowledge of potential future demand, alternative available stock and any indications of obsolescence.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Attributable to the company's principal activity
10,118,972
11,369,100
2023
2022
£
£
Other revenue
Interest income
1,032
1,518
Grants received
500
750
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
(500)
(750)
Fees payable to the company's auditor for the audit of the company's financial statements
18,500
20,000
Depreciation of owned tangible fixed assets
306,803
311,805
Depreciation of tangible fixed assets held under finance leases
112,318
89,268
Profit on disposal of tangible fixed assets
(25,924)
(36,666)
Operating lease charges
42,202
42,793
5
Employees

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

2023
2022
Number
Number
Production staff
49
54
Administrative staff
24
22
Total
73
76

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,363,649
2,169,338
Social security costs
211,090
196,480
Pension costs
57,920
27,585
2,632,659
2,393,403
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
166,323
204,076
Company pension contributions to defined contribution schemes
6,414
16,547
172,737
220,623
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
56,103

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,032
1,518
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
17,281
11,039
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
18,098
Adjustments in respect of prior periods
-
0
(4,076)
Total current tax
-
0
14,022
Deferred tax
Origination and reversal of timing differences
(98,171)
44,684
Changes in tax rates
-
0
14,110
Adjustment in respect of prior periods
-
0
140
Total deferred tax
(98,171)
58,934
Total tax (credit)/charge
(98,171)
72,956
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 19 -

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

2023
2022
£
£
(Loss)/profit before taxation
(465,305)
362,197
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(109,440)
68,817
Tax effect of expenses that are not deductible in determining taxable profit
20,776
20,304
Tax effect of income not taxable in determining taxable profit
(3,759)
(29,621)
Tax effect of utilisation of tax losses not previously recognised
-
0
(1,136)
Adjustments in respect of prior years
-
0
(3,936)
Effect of change in corporation tax rate
(5,748)
-
0
Group relief
-
0
(811)
Change in deferred tax rate
-
0
19,339
Taxation (credit)/charge for the year
(98,171)
72,956

Factors affecting future tax and charges

In March 2021 the Chancellor confirmed, in the budget, an increase in the corporation tax rate from 19% to 25%. The Finance Bill 2021 had its third reading on 24 May 2021 and is now considered substantively enacted. The timing differences expected to reverse on or after 1 April 2023 have been accounted for at 25%.

10
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
50,000
26,043
76,043
Additions
-
0
14,854
14,854
At 31 December 2023
50,000
40,897
90,897
Amortisation and impairment
At 1 January 2023 and 31 December 2023
50,000
-
0
50,000
Carrying amount
At 31 December 2023
-
0
40,897
40,897
At 31 December 2022
-
0
26,043
26,043
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant, machinery and equipment
Fixtures & fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
2,584,853
650,272
1,549,008
651,589
1,262,303
6,698,025
Additions
78,108
1,605
136,128
112,204
367,859
695,904
Disposals
-
0
-
0
(60,750)
-
0
(141,892)
(202,642)
At 31 December 2023
2,662,961
651,877
1,624,386
763,793
1,488,270
7,191,287
Depreciation and impairment
At 1 January 2023
881,844
175,166
894,092
415,174
834,028
3,200,304
Depreciation charged in the year
65,148
16,284
111,768
44,213
181,708
419,121
Eliminated in respect of disposals
-
0
-
0
(5,671)
-
0
(106,692)
(112,363)
At 31 December 2023
946,992
191,450
1,000,189
459,387
909,044
3,507,062
Carrying amount
At 31 December 2023
1,715,969
460,427
624,197
304,406
579,226
3,684,225
At 31 December 2022
1,703,009
475,106
654,916
236,415
428,275
3,497,721

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Plant, machinery and equipment
233,075
274,206
Motor vehicles
281,673
165,341
514,748
439,547

Included within the cost of freehold land and buildings is land of £432,000 which is not depreciated.

12
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,709,459
1,956,547
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
820,970
1,004,033
Corporation tax recoverable
123,405
117,404
Amounts owed by group undertakings
951,865
502,813
Other debtors
97,274
45,709
Prepayments and accrued income
51,047
44,009
2,044,561
1,713,968
Deferred tax asset (note 18)
-
0
1,494
2,044,561
1,715,462
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
244,382
-
0
Obligations under finance leases
17
170,224
136,598
Trade creditors
1,007,871
798,785
Taxation and social security
269,594
319,937
Other creditors
-
0
7,585
Accruals and deferred income
54,468
39,224
1,746,539
1,302,129

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

 

Bank loans and overdrafts are secured by a fixed and floating charge over the assets of the company.

15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
174,173
140,144

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

NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
244,382
-
0
Payable within one year
244,382
-
0
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
190,422
150,595
In two to five years
182,170
149,679
372,592
300,274
Less: future finance charges
(28,195)
(23,532)
344,397
276,742

Finance lease payments represent rentals payable by the company 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

18
Deferred taxation

The following are the major deferred tax liabilities recognised by the company and movements thereon during the current and prior reporting period.

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
ACAs
389,755
350,018
-
-
Tax losses
(139,571)
493
-
1,494
SBAs
3,474
1,318
-
-
253,658
351,829
-
1,494
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 January 2023
350,335
Credit to profit or loss
(96,677)
Liability at 31 December 2023
253,658
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
57,920
27,585

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
21
Financial commitments, guarantees and contingent liabilities

The group's banking facilities require that the company enters into a cross company guarantee covering the debt of its parent company, NWTT Holdings Limited, should any default occur.

 

North West Timber Treatment Limited therefore has a contingent liability of £1,512,661 (2022: £1,720,290) at the balance sheet date, in respect of this cross guarantee.

22
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
41,089
37,185
Between two and five years
84,645
109,009
In over five years
475,125
527,875
600,859
674,069
NORTH WEST TIMBER TREATMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
23
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
136,948
24
Ultimate controlling party

The company is a subsidiary of NWTT Holdings Limited, a company incorporated in England and Wales. The registered office of NWTT Holdings Limited is NWTT House, Lockett Road, South Lancs Industrial Estate, Wigan, United Kingdom, WN4 8DE.

 

Copies of the consolidated financial statements of NWTT Holdings Limited can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

 

The ultimate controlling party is Mr R W Mayor.

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