Storskogen UK Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 13142215 (England and Wales)
Storskogen UK Limited
Company Information
Directors
H James
J M P Lofgren
L Glader
B C Hansson
(Appointed 19 February 2024)
Company number
13142215
Registered office
Sweden House
5 Upper Montagu Street
London
England
W1H 2AG
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Storskogen UK Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 30
Storskogen UK Limited
Strategic Report
For the year ended 31 December 2023
Page 1

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

Fair review of the business

The company continued to increase its portfolio of companies via the acquisition of AC Electrical Services Group during the year ended 31 December 2023. The company acquired a majority (80%) stake in AC Electrical, a leading electrical contractor in the UK, which specialises in commercial building fit-outs, LED installation and refurbishments.

 

The company is funded by way of loans from its ultimate parent company, Storskogen Group AB. The company made pre-tax losses of £13,768,760 for the period and at 31 December 2023 had net liabilities of £4,839,876.

Principal risks and uncertainties

The principal risks and uncertainties facing the company relate to the general uncertainty as to the level of economic activity going forward, continued high inflation and interest rates which will effect the company and its subsidiary businesses, the availability of quality acquisition targets and the availability of capital with which to fund future acquisitions.

Key performance indicators

The Directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the business at the present time.

Promoting the success of the company

The Directors consider that in conducting the business of the company over the course of the year they have complied with section 172(1) (a) to (f) of the Companies Act 2006 (“S172(A)”) by fulfilling their duty to promote the success of the company, When making decisions, each director ensures that they act in the way that would most likely promote the company’s success for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following matters:

 

The company’s strategy is to acquire businesses for long-term growth. The directors do not intend to divest businesses and make investments with an infinite ownership horizon in mind. Therefore the long term consequences are firmly within the sights of the Board when all material decisions are made.

 

 

People are a key factor to the success of the company. The directors seek to retain people for the long term and our recruitment strategy is based on offering our employees both fulfilling careers and balanced lives. We look to our employees to contribute ideas for our future growth, and share the rewards of the business through our long term incentive plan.

 

 

The directors seek to promote strong, long term, mutually beneficial relationships with suppliers and its subsidiary undertakings. Such general principles are critical in the delivery of the company’s strategy.

Storskogen UK Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2

 

The directors take overall responsibility for the company’s impact on the local communities in which the company operates and the environment. Storskogen’s approach to sustainability is detailed in the annual report of Storskogen Group AB for the year ended 31 December 2023, which details the key priority areas of responsible business, minimised environmental impact and being a sustainable employer.

 

 

The directors recognise the importance of acting in ways which promote high standards of business conduct. The board periodically reviews and approves clear operating frameworks, to ensure that its high standards are maintained both within the businesses and the business relationships the company has with stakeholders.

 

 

The company is a wholly owned subsidiary of Storskogen Group International AB.

On behalf of the board

J M P Lofgren
Director
24 September 2024
Storskogen UK Limited
Directors' Report
For the year ended 31 December 2023
Page 3

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

Principal activities

The principal activity of the company continues to be that of acquiring and holding investments in a diversified group of profitable companies with strong market positions.

Results and dividends

The results for the year are set out on page 11.

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:

H James
J M P Lofgren
L Glader
D Kaplan
(Resigned 19 February 2024)
B C Hansson
(Appointed 19 February 2024)
Financial instruments
Risks

The principal risks facing the business relate to the following:

Liquidity risk

Liquidity risk is the risk that the company will be unable to meet its payment obligations when they become due.

 

The company monitors its liquidity position regularly and maintains sufficient liquidity facilities to conduct its business.

Interest rate risk

Interest rate risk is the risk that fair value or future cash flows from a financial instrument will vary due to changes in market interest rates.

 

The company is primarily exposed to interest rate risk regarding the company’s intercompany loans at variable interest rates. At the balance sheet date, all the company’s intercompany loans are at variable interest rates.

Foreign currency risk

Currency risk is the risk that fair values and cash-flows relating to financial instruments may fluctuate when the value of foreign currencies changes.

 

The company is not exposed to any significant currency risk.

Storskogen UK Limited
Directors' Report (Continued)
For the year ended 31 December 2023
Page 4
Employee involvement

As the parent company of a large group with over 250 employees within the group, Storskogen UK Limited recognises the importance of engaging with our workforce and ensuring that the interests and well-being of employees are considered in decision-making. Most employees are employed by our subsidiaries and each subsidiary company operates its own employee engagement and communication processes independently. The Board, however, oversees and monitors the effectiveness of these processes at the Group level.

 

During the financial year ended 31 December 2023, the Company ensured that each subsidiary was responsible for managing its own employee communication and engagement activities. These initiatives were tailored to the specific needs of the workforce within each subsidiary and included, but were not limited to:

 

Although employee engagement and communication are handled at the subsidiary level, Storskogen UK Limited remains involved in monitoring and overseeing these processes to ensure that the Group’s overall standards and values are upheld.

Post reporting date events

Following the year end, Storskogen Group AB assigned £86,782,933 of its loans outstanding from Storskogen UK Limited to Storskogen Group International AB. On 28 March 2024, Storskogen UK Limited issued 60 new ordinary shares to Storskogen Group International AB for an aggregate subscription price of £86,782,933, which was settled by the release of the loan liability outstanding to Storskogen Group International AB to the same amount.

 

Since the balance sheet date the company has received dividend income of £2.5m from its subsidiary undertakings.

 

Following the balance sheet date, the Company has entered into a parent company guarantee on behalf of one of its subsidiaries. The guarantee relates to the performance of that subsidiary in a third party contract and is limited to a maximum of £5.5m.This guarantee is not expected to result in any material outflow of resources.

Future developments

The company continues to look at further acquisition opportunities with a view to diversifying its portfolio of well-managed and profitable small and medium-sized companies.

Auditor

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

Storskogen UK Limited
Directors' Report (Continued)
For the year ended 31 December 2023
Page 5
Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
J M P Lofgren
Director
24 September 2024
Storskogen UK Limited
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 6

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 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.

Storskogen UK Limited
Independent Auditor's Report
To the Member of Storskogen UK Limited
Page 7
Opinion

We have audited the financial statements of Storskogen UK Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity 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 FRS 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.

Storskogen UK Limited
Independent Auditor's Report (Continued)
To the Member of Storskogen UK Limited
Page 8

Opinions on other matters prescribed by the Companies Act 2006

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

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 Directors' Report.

 

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

 

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the 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.

Storskogen UK Limited
Independent Auditor's Report (Continued)
To the Member of Storskogen UK Limited
Page 9
Auditor's responsibilities for the audit of the financial statements

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

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

 

Storskogen UK Limited
Independent Auditor's Report (Continued)
To the Member of Storskogen UK Limited
Page 10

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.

Use of our 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 the member 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.

Andrew Barford
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
24 September 2024
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Storskogen UK Limited
Statement of Comprehensive Income
For the year ended 31 December 2023
Page 11
2023
2022
Notes
£
£
Turnover
3
1,096,660
710,002
Administrative expenses
(4,087,138)
(3,882,300)
Impairment of investment in subsidiaries
(5,000,000)
-
0
Operating loss
4
(7,990,478)
(3,172,298)
Income from shares in group undertakings
7
14,288,924
5,600,000
Other interest receivable and similar income
7
68,950
-
0
Interest payable and similar expenses
8
(20,136,156)
(8,589,739)
Loss before taxation
(13,768,760)
(6,162,037)
Tax on loss
9
2,673,307
1,701,304
Loss for the financial year
(11,095,453)
(4,460,733)

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

The notes on pages 14 to 30 form part of these financial statements.

Storskogen UK Limited
Balance Sheet
As at 31 December 2023
Page 12
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
41,516
65,474
Investments
11
333,488,156
287,976,558
333,529,672
288,042,032
Current assets
Debtors
13
3,053,864
2,955,124
Creditors: amounts falling due within one year
14
(13,173,679)
(5,926,677)
Net current liabilities
(10,119,815)
(2,971,553)
Total assets less current liabilities
323,409,857
285,070,479
Creditors: amounts falling due after more than one year
15
(328,234,647)
(290,714,535)
Provisions for liabilities
Deferred tax liability
17
(15,086)
(15,086)
(15,086)
(15,086)
Net liabilities
(4,839,876)
(5,659,142)
Capital and reserves
Called up share capital
20
108
100
Share premium account
11,761,984
-
0
Profit and loss reserves
(16,601,968)
(5,659,242)
Total equity
(4,839,876)
(5,659,142)

The notes on pages 14 to 30 form part of these financial statements.

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:
H  James
Director
Company Registration No. 13142215
Storskogen UK Limited
Statement of Changes in Equity
For the year ended 31 December 2023
Page 13
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
100
-
0
(1,305,132)
(1,305,032)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(4,460,733)
(4,460,733)
Credit to equity for equity settled share-based payments
19
-
-
106,623
106,623
Balance at 31 December 2022
100
-
0
(5,659,242)
(5,659,142)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(11,095,453)
(11,095,453)
Issue of share capital
20
8
11,761,984
-
11,761,992
Credit to equity for equity settled share-based payments
19
-
-
152,727
152,727
Balance at 31 December 2023
108
11,761,984
(16,601,968)
(4,839,876)

The notes on pages 14 to 30 form part of these financial statements.

Storskogen UK Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 14
1
Accounting policies
Company information

Storskogen UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sweden House, 5 Upper Montagu Street, London, England, W1H 2AG.

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, except where modified in the accounting policies below. 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 company has used the right of exemption from preparing consolidated financial statements under the terms of section 401 of the Companies Act 2006. These financial statements are therefore separate financial statements.

 

The financial statements of the company are consolidated in the financial statements of Storskogen Group AB. These consolidated financial statements are available from its registered office, Hovslagargatan 3, 111 48 Stockholm, Sweden.

1.2
Going concern

The company is dependent on the support of its ultimate parent company, Storskogen Group AB. The company has received a letter of support from Storskogen Group AB confirming that it will continue to provide sufficient financial support to the company for at least twelve months from the date of this report.true

 

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 15
1.3
Turnover

Turnover relates to management fees from subsidiary undertakings and is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

1.4
Tangible fixed assets

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

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

Plant and equipment
3 years straight line
Fixtures and fittings
3 years straight line

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.

1.5
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

Consideration payable for the options over minority interests are initially recognised at the estimated amount payable to be recognised in creditors, and is subsequently remeasured with adjustments made to the cost of the investment in the subsidiary.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.6
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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 16

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
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, 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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 17
Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Interest calculated using the effective interest method on borrowings are recognised in interest payable and similar expenses. Financial liabilities classified as payable within one year are not amortised.

 

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

Derecognition of financial liabilities

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

1.8
Equity instruments

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

1.9
Taxation

The tax credit represents the sum of the tax currently receivable and deferred tax.

Current tax

The tax currently receivable is based on taxable profit for the year. Taxable loss 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 asset for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.10
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.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.11
Retirement benefits

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

1.12
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model or a Monte Carlo simulation, as appropriate.

 

The fair value determined is recognised over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and the company’s estimate of the number of equity instruments that will ultimately vest. The profit and loss account expense or credit for the period represents the movement in cumulative expense recognised as at the beginning and end of the period and is recognised in the employee benefits expense.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
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.

1.15

Put and call options

The company holds put and call options over the purchase of the residual non-controlling interests in its subsidiary undertakings. These put and call options are initially recognised at fair value against the valuation of investment together with a corresponding liability. At each reporting date, the options are revalued with any movement in fair value recognised against the investment and liability.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 19
1.16

Interest

Interest receivable

Interest income is recognised when it is probable that economic benefits will flow to the company and can be measured reliably.

 

Interest payable

Interest is charged to profit and loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.

1.17

Dividend

Dividend income from investments is recognised when the shareholders right to receive payment has been established.

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.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 20
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.

Option to purchase holdings of minority interests

Options to purchase non-controlling interests are valued using a discounted cash flow model based on expected future cash flows and an appropriate discount rate, and are revalued at each balance sheet date. The uncertainty in this revaluation lies in the applied discount rate and future profitability of the entities over which the options are held, which is based on the same estimates and assumptions as those made in the company's impairment reviews detailed below.

Impairment losses on non-financial assets

To assess the need for impairment, the recoverable amount for each asset or cash generating entity is calculated based on expected future cash flows and using an appropriate interest rate to be able to discount the cash flows. Uncertainties lie in assumptions about future operating profit and the determination of an appropriate discount rate. The rate used to discount the forecast cash flows from the investments is between 10.8% and 11.4% (2022: 8.4% and 9.0%) and long-term growth rates are set around 2% (2022: 2%).

 

During its valuation, the company ran sensitivity analysis for key assumptions including the discount rate, the terminal growth rate, and the margin. In the sensitivity analysis performed, an adverse change of 1% in either of these estimates would not cause any investments' carrying amount to exceed its recoverable amount by a material amount.

 

Although management believes that its judgements, assumptions and estimates are appropriate, actual results may differ from these estimates under different assumptions or market or macro-economic conditions.

 

A total impairment charge of £5.0m (2022: £nil) has been recognised during the year and recognised in profit and loss.

3
Revenue
2023
2022
£
£
Turnover analysed by class of business
Management of investments
1,096,660
710,002
4
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Exchange losses
50
196
Fees payable to the company's auditor for the audit of the company's financial statements
23,000
28,000
Depreciation of owned tangible fixed assets
28,798
16,485
Operating lease charges
208,615
179,648
Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 21
5
Employees

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

2023
2022
Number
Number
Employees
8
8

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,136,162
1,636,972
Social security costs
298,200
213,255
Pension costs
163,807
192,961
2,598,169
2,043,188
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
807,716
541,315
Company pension contributions to defined contribution schemes
52,000
41,063
859,716
582,378

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
591,847
356,000
Company pension contributions to defined contribution schemes
10,000
4,000
Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 22
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
68,950
-
0
Income from fixed asset investments
Income from shares in group undertakings
14,288,924
5,600,000
Total income
14,357,874
5,600,000
Disclosed on the profit and loss account as follows:
Income from shares in group undertakings
14,288,924
5,600,000
Other interest receivable and similar income
68,950
-
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
20,136,156
8,589,739

Interest payable to group undertakings includes interest on group borrowings of £19,777,493 and interest on overdrawn cash pool balances of £358,663.

9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(2,673,307)
(1,773,946)
Deferred tax
Origination and reversal of timing differences
-
0
72,642
Total tax credit
(2,673,307)
(1,701,304)
Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
9
Taxation
(Continued)
Page 23

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

2023
2022
£
£
Loss before taxation
(13,768,760)
(6,162,037)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(3,238,412)
(1,170,787)
Tax effect of expenses that are not deductible in determining taxable profit
2,621,224
53,184
Fixed asset differences
6,481
(4,672)
Exempt distributions
(3,360,833)
(1,064,000)
Transfer pricing adjustments
1,298,623
481,350
Deferred tax for changes in tax rates
(390)
3,621
Taxation credit for the year
(2,673,307)
(1,701,304)
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
33,189
48,770
81,959
Additions
4,840
-
0
4,840
At 31 December 2023
38,029
48,770
86,799
Depreciation and impairment
At 1 January 2023
-
0
16,485
16,485
Depreciation charged in the year
-
0
28,798
28,798
At 31 December 2023
-
0
45,283
45,283
Carrying amount
At 31 December 2023
38,029
3,487
41,516
At 31 December 2022
33,189
32,285
65,474
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
333,488,156
287,976,558
Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
11
Fixed asset investments
(Continued)
Page 24
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
287,976,558
Additions
50,511,598
At 31 December 2023
338,488,156
Impairment
At 1 January 2023
-
Impairment losses
5,000,000
At 31 December 2023
5,000,000
Carrying amount
At 31 December 2023
333,488,156
At 31 December 2022
287,976,558

Additions in the year include acquisitions of new subsidiaries and fair value movements on options over minority interests held by the Company.

 

One of the company’s investments has not performed in line with expectations due to a challenging economic environment and a very competitive market. Although the Directors expect the long-term performance of the company to return to pre-acquisition levels, a short-term reduction in profit margins has led the directors to conclude that an impairment of £5m to give a revised carrying value of £27.8m for this investment is appropriate.

12
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
12
Subsidiaries
(Continued)
Page 25
Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
SGS Tool Group Limited
1
Ordinary
80.00
-
S G S Engineering (UK) Limited
1
Ordinary
-
80.00
Julian Bowen Limited
1
Ordinary
80.00
-
Extra (UK) Limited
1
Ordinary
80.00
-
Fabco Sanctuary Limited
1
Ordinary
80.00
-
J&D Pierce (Contracts) Ltd
2
Ordinary
80.00
-
Stop Start Transport Limited
1
Ordinary
80.00
-
Tornado Group Limited
1
Ordinary
80.00
-
Tornado Wire Limited
1
Ordinary
-
80.00
Tornado Wire (Ireland) Limited
4
Ordinary
-
80.00
Cyclex P&A Limited
5
Ordinary
-
80.00
JDP Steel Erection Limited
3
Ordinary
-
80.00
AC Electrical Services Group Limited
6
Ordinary
80.00
-
AC Electrical Services (NW) Limited
6
Ordinary
-
80.00

Registered office addresses (all UK unless otherwise indicated):

1
291 Upper Richmond Road, London, England, SW15 6NP
2
Unit 14, Caledonian Road, Glengarnock, Ayrshire, KA14 3DA
3
Unit 17, Manor Court Manor Garth, Eastfield, Scarborough, YO11 3TU
4
42 Grattan St, Portlaoise, Laois, R32 HR62 Ireland
5
Unit CB, Riverview Business Park, Nangor Rd Bluebev, Dublin 12 Ireland
6
Unit 1, Dakota Court, Amy Johnson Way, Blackpool, FY4 2RP
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
24,001
-
0
Corporation tax recoverable
2,828,665
1,773,946
Amounts owed by group undertakings
-
0
963,781
Other debtors
3,100
(3,083)
Prepayments and accrued income
198,098
220,480
3,053,864
2,955,124
Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 26
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
16
60,000
60,000
Trade creditors
7,579
53,639
Amounts owed to group undertakings
12,933,211
5,650,619
Taxation and social security
118,988
104,042
Other creditors
7,113
5,000
Accruals and deferred income
46,788
53,377
13,173,679
5,926,677

Amounts owed to group undertakings includes accrued interest on group borrowings of £953,671 which is payable quarterly, and overdrawn cash pool balances of £11,981,795.

 

As part of the Storskogen Group's treasury operations, all subsidiary companies participate in an interest-bearing bank account sweeping arrangement whereby cash balances and overdrafts are physically swept to the header accounts on a daily basis. As at year end, interest is charged at 6.78% on overdraft positions and 5.19% on credit positions, depending on the currency in which the cash is held. The overdrawn cash pool position is shown within amounts owed to group undertakings.

15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
16
269,751,232
247,951,232
Taxation and social security
12,499
-
0
Other creditors
58,470,916
42,763,303
328,234,647
290,714,535
16
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
269,811,232
248,011,232
Payable within one year
60,000
60,000
Payable after one year
269,751,232
247,951,232
Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
16
Loans and overdrafts
(Continued)
Page 27

The company has entered into several loan agreements with its ultimate parent undertaking, Storskogen Group AB, to fund the acquisition of subsidiaries and facilitate cash flow.

 

At 31 December 2023, £60,000 was outstanding with an interest rate of 1.6% per annum. Other loans totaling £247,951,232 are outstanding with an interest rate of Sonia + 2.86% and £21,800,000 are outstanding with an interest rate of Sonia + 3.02%. These loans have various repayment dates with the earliest being April 2032.

 

Interest on all loans is payable quarterly in arrears.

17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
15,086
16,368
Short term timing differences
-
(1,282)
15,086
15,086
There were no deferred tax movements in the year.

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
163,807
192,961

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.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 28
19
Share-based payment transactions

During the year ended 31 December 2023 the company’s ultimate holding company, Storskogen Group AB, implemented two share-related incentive programmes for employees in Storskogen UK Limited: a share savings programme and an option programme. The programmes both pertain to the shares of the ultimate holding company.

 

Share savings programme

 

8 employees were offered the opportunity to acquire or allocate already held shares in Storskogen Group AB as savings shares on 16 June 2023.

 

These shares entitled the holders to receive performance shares free of charge if held for a period of three years and depending on the performance of the Group.

 

The savings shares were valued by Optio Incentives at either 6.2 SEK or 10.205 SEK each depending on the performance criteria attached.

 

Option programme

 

8 employees were granted options in Storskogen Group AB on 16 June 2023.

 

Each option entitles the holder to subscribe for 1 share in Storskogen Group AB.

 

The options were valued by Optio Incentives using a Black-Scholes valuation. They were valued at 1.76 SEK each.

 

The resultant share based payment charge recognised in the income statement in the year ended 31 December 2023 for the above programmes and existing programmes was £152,727 (2022: £106,623).

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
108
100
108
100

The company has one class of ordinary shares which carry one vote per share but carry no right to fixed income.

In April 2023, the company issued 8 £1 ordinary shares for cash consideration of £1,400,000 and for the settlement of a loan due to a fellow group undertaking with a fair value of £10,361,992.

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 29
21
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
54,207
210,006
Between two and five years
-
0
52,632
54,207
262,638
22
Events after the reporting date

Following the year end, Storskogen Group AB assigned £86,782,933 of its loans outstanding from Storskogen UK Limited to Storskogen Group International AB. On 28 March 2024, Storskogen UK Limited issued 60 new ordinary shares to Storskogen Group International AB for an aggregate subscription price of £86,782,933, which was settled by the release of the loan liability outstanding to Storskogen Group International AB to the same amount.

 

Since the balance sheet date the company has received dividend income of £2.5m from its subsidiary undertakings.

 

Following the balance sheet date, the Company has entered into a parent company guarantee on behalf of one of its subsidiaries. The guarantee relates to the performance of that subsidiary in a third party contract and is limited to a maximum of £5.5m.This guarantee is not expected to result in any material outflow of resources.

23
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

As at the balance sheet date the following balances were outstanding with related parties:

 

Storskogen UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 30
24
Ultimate controlling party

The immediate parent undertaking as at 31 December 2023 was Storskogen Group International AB, a company incorporated in Sweden.

 

At 31 December 2023 the ultimate parent undertaking and controlling party was Storskogen Group AB (publ), a company incorporated in Stockholm, Sweden. Storskogen Group AB (publ) is the parent undertaking of the smallest and largest group to consolidate these financial statements. Copies of Storskogen Group AB (publ) consolidated financial statements can be obtained from Storskogen Group AB (publ), Hovslagargatan 3, 6fl, 111 48, Stockholm, Sweden.

 

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