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Registration number: 00785952

Barnwood Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Barnwood Limited

Contents

Company Information

1

Strategic Report

2 to 6

Directors' Report

7 to 9

Statement of Directors' Responsibilities

10

Independent Auditor's Report

11 to 13

Profit and Loss Account

14

Balance Sheet

15

Statement of Changes in Equity

16

Notes to the Financial Statements

17 to 26

 

Barnwood Limited

Company Information

Directors

S W Carey

P F Evans

D N Piper

S M Pearce

M J Williams

G F Cook

A A B McKenna

J W Bennett

C Preece

Company secretary

M J Williams

Registered office

203 Barnwood Road
Gloucester
GL4 3HS

Auditors

Hazlewoods LLP
Staverton Court
Staverton
Cheltenham
GL51 0UX

 

Barnwood Limited

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is that of contracting work for the construction industry.

Fair review of the business

The company had an successful year as we successfully navigated through a difficult phase for the industry. Inflationary pressures and material availability has led to several high profile insolvencies in the sector in the past 12 months. Despite these pressures, we have successfully addressed and managed these risks during the period, primarily thanks to our people, who continue to go above and beyond with their commitment and performance.

As a result, the company is pleased to announce robust financial results, establishing a solid foundation for us to achieve our strategic objectives.

Cashflow continues to be effectively managed across the business. Our healthy cash resources allowed us to maintain our excellent payment performance to our supply chain.

Results for the year show increased turnover of £122.3m (2022 - £95.8m) and an increased net profits before tax of £4.3m (2022 - £1.5m).

Long term strategy and vision
In response to the challenges faced by the UK economy, the business conducted a comprehensive reassessment of its long-term strategic plan in 2022. We believe what distinguishes us from our competitors is our emphasis on collaboration and innovation. We strive to establish partnerships with our customers, prioritising long-term value over immediate gains. It has been our experience that we have often been successful in retaining customers once we have engaged with them.

The company views the main drivers for its success as follows:
• Delivering projects to the highest standard and in a timely fashion - Excellence in execution remains at the core of our operations, ensuring we consistently meet and exceed client expectations.
• Retain strong ethos across its employees and supply chain - Fostering a culture of integrity and reliability to ensure consistent delivery and performance.
• Maintain a healthy financial standing - Robust financial management to support stability and growth, enabling us to invest in new opportunities.
• Uphold and develop a strong health and safety framework - Prioritising the well-being of our employees and stakeholders across the company, ensuring a safe and productive work environment
• Develop innovative and flexible solutions - Using our collaborative approach with clients to foster innovation, adaptability, and customised solutions that meet their unique needs.
• Regularly assessing the economic landscape - Staying informed and agile in relation to the industries we operate in, allowing us to proactively address challenges and seize opportunities.
• Invest in the training and development programmes - Enhancing the skills and capabilities of our workforce, ensuring we remain at the forefront of industry advancements and best practices.

The long-term plan reflects the company’s strategy to simplify its structure which is designed to ensure that the company remains a thriving, resilient, innovative and respected contracting business. The review has highlighted the importance of strengthening certain processes and systems to ensure efficient management of our anticipated growth over the next five years. We believe that we are well placed to react to changes in the market place and the macroeconomic environment.

To communicate these strategic priorities effectively, we will hold regular briefing sessions with our employees, ensuring everyone is aligned with our long-term vision and goals.

Additionally, we are exploring opportunities to integrate advanced technologies and sustainable practices into our operations. By embracing digital transformation and sustainability, we aim to improve efficiency, reduce environmental impact, and drive long-term growth.

The company takes its relationships with its supply chain very seriously. We are proud of our payment performance and are always committed to pay subcontractors and suppliers on time, even when the credit terms of our clients exceed theirs. This commitment not only strengthens our supply chain relationships but also enhances our reputation as a reliable and trustworthy partner.
 

 

Barnwood Limited

Strategic Report for the Year Ended 31 December 2023

Employee Ownership Trust
The transition to employee ownership has gone from strength to strength and is designed to support the long-term sustainability of the organisation and to secure the legacy of the founding directors.

The employee ownership trust continues to bring us advantages to the long-term sustainability of the group, and the retention of employees.

By sharing responsibility, opportunities and rewards we continue to build our already strong culture across the business and develop better outcomes for our customers and other stakeholders.

The Trustees that continue to oversee the work of the work are as follows:

• Peter F Evans - Director
• Gemma Cox - HR Manager
• Nigel Tillott - Independent Advisor

An Employee Representative Group is in place and takes in consideration views from across the business which are communicated back to the board through the Employee Representatives. This company continues to spearhead initiatives to ensure that the business remains agile, drives innovation and strives towards a more sustainable future. Alongside this they have also implemented several positive changes to our work with local communities such as initiating a variety of social value initiatives.
 

Summary of performance indicators

• Turnover and the future order book
• Margins on projects across the company
• Maintaining high levels of staff retention
• Monitoring monthly movements in cash flows
• Ensuring that they achieve and maintain the highest standards of Health and Safety at all of their sites.

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

Turnover
Turnover has increased by 27.6% in the year. This is primarily due to there being several large projects in our construction division. We are expecting turnover in 2024 to be significantly lower as a result of several key projects being slightly delayed.

Gross Profit
The company’s gross profit margin in the year was 12.29% (2022 10.7%). During the year, the company experienced an improvement in margins as we enhanced our strategies to mitigate inflationary risks. In light of the economic slowdown and increased competition, we expect our margins to remain competitive in the short term.

Employee Retention
The company recognises that employees are their biggest asset. During the year the business has continued to invest in training and development through apprenticeships and collaborations with professional bodies. The high level of employee retention allows a consistent service to their clients to be maintained. With the implementation of the employee ownership trust we anticipate employee retention will continue to be strong in the future.

Cash flow
The cashflows of the business remains strong with no bank borrowings. The year end balances increased from £6.2m to £6.8m. The company takes its payment performance very seriously and are always committed to pay subcontractors and suppliers on time.

Occupational Health and Safety and IT Security
Our continued dedication to Occupational Health and Safety has been acknowledged with our 9th successive ROSPA Gold Award for 2024.

The safety and well-being of our employees, contractors, and visitors continue to be our paramount concern. We actively promote Barnwood’s robust safety culture through employee briefings, regular updates to the Employee Representative Group, and monthly discussions with the Board. Our objective is to keep everyone within the organisation aware of our progress, which is primarily focused on managing high-level risks within the construction sector, performance metrics, Health & Safety bulletins, and highlighting key areas of growth. The Trustees are also updated on these matters quarterly.

 

Barnwood Limited

Strategic Report for the Year Ended 31 December 2023

Barnwood continues to uphold and enhance our ISO 45001 certification, which is externally verified by UKAS accredited auditors. We also retain our SSIP certifications: Chas, Constructionline, Safecontractor, Achilles, Altius.

Our commitment to IT security remains steadfast. We have successfully renewed our Cyber Essentials certification and continue to prioritise IT security training for our employees.


Section 172 (1) Statement
The directors of the company must act in accordance with the duties detailed in section 172 of the Companies Act 2006 which is summarised as follows:

A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

a) The likely consequences of any decision in the long term;
b) The interest of the company’s employees;
c) The need to foster the company’s business relationships with suppliers, customers and others;
d) The impact of the company’s operations on the community and the environment;
e) The desirability of the company maintaining a reputation for high standards of business conduct; and
f) The need to act fairly as between members of the company.

Employees
The company strives to create a working environment where people enjoy working for the company, share in our successes and maintain high levels of productivity.

Our company ethos or the ‘Barnwood Way’ is the cornerstone of this:
• Trust - Our ethos of fairness, respect and openness as well as the honourable way of conducting our business creates trusting and confident relationships with our clients, subcontractors and suppliers.
• Support - We look after each and every one of our people with warmth, respect and courtesy, and continually invest in their personal development.
• Reputation - Our positive image and good name is a testament to the way we do business, lives our values and support our local communities.
• Quality - We strive for quality in everything that we do, earning us a high level of repeat business and making our work interesting and rewarding.
• Collaboration - By working transparently, willingly and collaboratively with our client, supply chain and employees, we build strong long term relationships and achieve best value for our stakeholders.
• Reliability - Providing a reliable and consistent service and always honouring our commitments mean our clients, supply chain and employees know that they can depend on us.

We prioritise effective communication to ensure our employees feel engaged and informed about our performance and projects. To achieve this, we employ various initiatives, including a quarterly employee newsletter, an employee representative board, and biannual group-wide communication sessions led by the board of directors. These efforts underscore our commitment to transparency and engagement across the company.

The training of new employees and the continual upskilling of existing employees is integral to the Barnwood approach. We prioritise the training and development of all our employees, encompassing both job-specific training and the enhancement of soft skills. Through our annual appraisal system, we identify individual training needs, ensuring tailored development plans for each employee. We have a robust apprenticeship program, demonstrating our commitment to nurturing young talent and addressing the skills shortage within the construction industry.

We recognise that a number of Directors will be retiring within the next five to ten years, and therefore, we have implemented a comprehensive management training program to support our succession planning.

Over the last year we have enhanced our wellbeing support for employees, we became supporters of the Construction industry lighthouse charity, which provides emotional, physical, financial and wellbeing support to those working in the construction industry.

The group recognises its responsibility relating to modern slavery and to ensure that no element is present within the company itself or its supply chain. A statement of modern slavery can be found within our company website.

 

Barnwood Limited

Strategic Report for the Year Ended 31 December 2023

Customers
The company recognises that engagement through listening, understanding and responding to customers is critical to our long-term success and our collaborative approach is the cornerstone of this.

The Directors engage with customers through regular meetings and dedicated account management. This is a key measure of the business’ success and helps us capture ‘lessons learned’ which helps drive performance in the future

The feedback from the customer engagement helps to inform the company on its long-term strategy, budgets and business plans. This often includes the way in which we communicate as a business, collaborate, structure our teams and maintain our continuous drive for outstanding quality.

Supply chain partners
The company's success and reputation are inextricably linked to its relationship with its supply chain partners. As noted above, Barnwood Limited is proud of its payment performance. This is fundamental as the company seeks to maintain and develop strong, open, collaborative and positive relationship across its supply chain. Our commitment to this has led us to join the Prompt Payment Code during 2020. We are proud to be part of this government initiative.

Engagement with supply chain partners takes many forms across the group including but not limited to annual meetings, surveys and regular design team meetings. Our supply chain partners are considered an extension of the company's internal teams. As such the Directors will regularly attend annual meetings with key supply chain partners to ensure that the group's overall strategy and vision is communicated effectively.
 

Environment
Our Energy Efficiency Actions and Carbon Emissions Management.

Barnwood are proud that our management of emissions go beyond legal and regulatory standards because we are accredited to ISO 14001:2015. We have adopted a best-practice approach to environmental management, and often we are assessed by either BREEAM or LEED assessors on our projects.

Over the last 5 years, we have continued to make good progress in both our carbon management and reporting, more detail has been included in the Directors' Report

Community and social responsibility
The company is committed to support various local and national charities. We also provide support to various charities and voluntary organisations with voluntary work. We are committed to promoting careers within the construction and partner for several esteemed institutions within the local area.

Innovation
The company places great pride that we are problem solvers, and our ability to meet project challenges, however complex, is what differentiates us. Capable, resourceful and adaptable, we think things through, use our knowledge and experience, and find practical solutions no matter how tough the challenge is.

We are exploring the integration of advanced technologies to enhance our operational efficiency and service delivery. Our commitment to sustainability remains a priority, and we are actively seeking opportunities to implement environmentally friendly practices across all aspects of our business.

The company places great emphasis on constant improvement and we offer our employees the opportunity to engage with business improvement initiatives and issues affecting the wide construction industry.
 

 

Barnwood Limited

Strategic Report for the Year Ended 31 December 2023

Safety
Occupational Health & Safety considerations, as well as concern for the environment, apply to everything we do. All works are carried out in strict compliance with regulatory provisions. We are certified to ISO 45001 and ISO 14001 and are accredited members of the Contractors Health & Safety Assessment Scheme (CHAS), Construction Line, Exor Safe Contractor and Achillies.

Shareholders
As the Board of Directors, our intention is to behave responsibly towards our employees via the Employee Ownership Trust and treat them fairly and equally so they too may benefit from the successful delivery of our plan. We report to the Trust on a bi-annual basis reporting the performance of the business against agreed budgets and forecasts.

Other stakeholders
Other major stakeholder groups include the company's insurers, bankers, surety providers, advisors, auditors, regulators and HMRC.

With all these stakeholder groups, the Directors maintain regular and open dialogue to ensure that all parties are kept informed and are listed to. The Directors believe this is essential to building strong working relationships.

Principal risks and uncertainties

The directors have established business processes that seek to identify, mitigate and manage a variety of risks at all levels of the business.

The directors have reviewed the principle risks and uncertainties relating to the company as follows:

Project management risk
Effective project management is a key component in delivering an outstanding service to every client. Poor contract management can lead to both financial and reputational damage.

To achieve an effective service, support systems have been implemented to ensure that the management of contracts deliver a quality service that goes far beyond the project and the obligations under the contract.

Price risk
Price risk is minimised through maintaining a close working relationship with customers and by delivering high quality work. We have had to alter our approach in the face of inflationary pressures and as such we have sought to collaborate with our customers to equitably share this risk. This revised approach means that disputes are kept to a minimum and invoices are generally paid within the agreed terms.

Economic risk
The current weakness in the UK economy has reduced the confidence in both the public and private sectors, particularly those based in the retail sector. Our strategy is to maintain a broadly based client portfolio across a variety of difference sectors, locations and markets.

Approved by the Board on 22 July 2024 and signed on its behalf by:


M J Williams
Company secretary and director

 

Barnwood Limited

Directors' Report for the Year Ended 31 December 2023

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

Directors of the company

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

S W Carey

P F Evans

D N Piper

S M Pearce

M J Williams - Company secretary and director

G F Cook

A A B McKenna

J W Bennett

C Preece (appointed 1 January 2023)

Financial Instruments

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

Credit risk
The company’s principal financial assets are bank balances, cash, trade and other receivables. The company’s credit risk is primarily attributable to its trade receivables. The company's policies are aimed at minimising such losses through satisfactory credit worthiness procedures. The amounts presented in the balance sheet are, where appropriate, net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The credit risk on liquid funds is limited because the counter parties are banks with high credit-ratings assigned by international credit-rating agencies.

Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company aims to mitigate liquidity risk by managing cash generation by its operations, applying cash collection targets throughout the company and constantly monitors the company's trading results to ensure that the company can meet its future obligations as they fall due.

Cash flow risk
Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability such as future interest payments on variable rate loans.

The company has limited exposure both to interest rate risk, as there is no third party funding within the company, and exchange rate risk, by virtue of the limited transactions in foreign currency.

Employment of disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as afar as possible, be identical to that of other employees.

 

Barnwood Limited

Directors' Report for the Year Ended 31 December 2023

Employee involvement

The company's policy is to actively engage with employees by fostering open communication and ensuring their involvement in matters that affect their interests. We achieve this through regular meetings and transparent discussions, promoting a collaborative environment.

To keep employees well-informed, we distribute information bulletins and reports that cover areas of concern and interest. These communications aim to enhance collective awareness among all employees regarding the financial and economic factors influencing the company's performance. We strive to align the group's objectives with employee expectations and foster a sense of shared purpose and commitment.


Matters covered in the strategic report
Information on the engagement with suppliers, customers and others is shown in the strategic report.

Future developments

The company continues to maintain a robust order book for the next twelve months, supported by existing profitable work streams and frameworks.

The high levels of insolvency in the Constructor sector has put pressure on the surety insurance market and our ability to secure performance bonds for certain clients. As such, we anticipate potential challenges in securing new projects during the latter half of 2024.

Over the past five years, our strategic focus on diversifying into new sectors has significantly bolstered our resilience. This diversification, coupled with our involvement in several high-quality frameworks, positions us strongly for the future. In light of ongoing economic fluctuations in the UK, we plan to reinvigorate and intensify our efforts in these new sectors over the next year. To mitigate these challenges, our strategy will concentrate on targeting clients who serve as end users, as we believe they are more likely to continue with their investment plans.

In addition to these efforts, we are exploring the integration of advanced technologies to enhance our operational efficiency and service delivery. Our commitment to sustainability remains a priority, and we are actively seeking opportunities to implement environmentally friendly practices across all aspects of our business.

We are also focused on strengthening our partnerships and collaborations, to expand our market presence and access new opportunities. These initiatives are aimed at not only sustaining our current performance but also driving innovation and long-term growth.

By staying agile and proactive, we aim to turn potential challenges into opportunities, ensuring that the company remains at the forefront of the industry.

2023 Streamlined Energy and Carbon report
Information concerning carbon and energy matters, including emissions, energy consumption and intensity metrics relating to the Company are disclosed on a group basis in the directors; report contained in the annual report and consolidated financial statements of Barnwood Group Limited, the most senior parent preparing consolidated financial statements.

Going concern

After reviewing the group and company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources available to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Directors' liabilities

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

Disclosure of information to the auditors

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

 

Barnwood Limited

Directors' Report for the Year Ended 31 December 2023

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 22 July 2024 and signed on its behalf by:


M J Williams
Company secretary and director

 

Barnwood Limited

Statement of Directors' Responsibilities

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

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

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

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

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

 

Barnwood Limited

Independent Auditor's Report to the Members of Barnwood Limited

Opinion

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

In our opinion the financial statements:

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

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

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

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 original financial statements were authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

 

Barnwood Limited

Independent Auditor's Report to the Members of Barnwood Limited

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

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

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 10, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor’s responsibilities for the audit of the financial statements

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

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

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

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

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

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

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

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

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

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

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

reading minutes of meetings of those charged with governance.

 

Barnwood Limited

Independent Auditor's Report to the Members of Barnwood Limited

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

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

Use of this report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.





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

Staverton Court
Staverton
Cheltenham
GL51 0UX

22 July 2024

 

Barnwood Limited

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

122,345,768

95,829,814

Cost of sales

 

(107,309,021)

(85,611,412)

Gross profit

 

15,036,747

10,218,402

Administrative expenses

 

(10,752,600)

(8,722,441)

Operating profit

4

4,284,147

1,495,961

Other interest receivable and similar income

5

4,040

672

Interest payable and similar expenses

6

(15,805)

(8,358)

Profit before tax

 

4,272,382

1,488,275

Taxation

9

(1,001,991)

(180,249)

Profit for the financial year

 

3,270,391

1,308,026

The above results were derived from continuing operations.

The company has no other comprehensive income for the year.

 

Barnwood Limited

(Registration number: 00785952)
Balance Sheet as at 31 December 2023

Note

2023
 £

2022
 £

Fixed assets

 

Tangible assets

10

1,463,599

935,455

Current assets

 

Stocks

11

105,809

110,913

Debtors

12

20,835,735

19,165,848

Cash at bank and in hand

6,848,933

6,194,250

 

27,790,477

25,471,011

Creditors: Amounts falling due within one year

13

(24,273,775)

(24,222,321)

Net current assets

 

3,516,702

1,248,690

Total assets less current liabilities

 

4,980,301

2,184,145

Provisions for liabilities

14

(686,235)

(160,470)

Net assets

 

4,294,066

2,023,675

Capital and reserves

 

Called up share capital

15, 16

6,794

6,794

Other reserves

16

14,147

14,147

Retained earnings

16

4,273,125

2,002,734

Total equity

 

4,294,066

2,023,675

Approved and authorised by the Board on 22 July 2024 and signed on its behalf by:
 


M J Williams
Company secretary and director

 

Barnwood Limited

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

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 January 2023

6,794

14,147

2,002,734

2,023,675

Profit for the year

-

-

3,270,391

3,270,391

Dividends

-

-

(1,000,000)

(1,000,000)

At 31 December 2023

6,794

14,147

4,273,125

4,294,066

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 January 2022

6,794

14,147

1,694,708

1,715,649

Profit for the year

-

-

1,308,026

1,308,026

Dividends

-

-

(1,000,000)

(1,000,000)

At 31 December 2022

6,794

14,147

2,002,734

2,023,675

 

Barnwood Limited

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

 

1

General information

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

The address of its registered office is:
203 Barnwood Road
Gloucester
GL4 3HS

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

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

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

Summary of disclosure exemptions

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

Going concern

After reviewing the group and company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources available to continue in operational existence for the forseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Name of parent of group

These financial statements are consolidated in the financial statements of Barnwood Group Limited.

The financial statements of Barnwood Group Limited may be obtained from the company's registered office, 203 Barnwood Road, Gloucester, GL4 3HS.

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

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

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

 

Barnwood Limited

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

Key sources of estimation uncertainty

Determining the value of amounts recoverable under contracts requires an estimation of the total expected turnover and costs associated with a contract and its stage of completion at the accounting reference date.
The carrying amount is a net creditor £4,434,392 (2022 - £1,086,402) which represents the net of amounts due to/from customers as disclosed in notes 12 and 13 to the financial statements.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable in respect of construction contracts and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where a contract has only been partially completed at the balance sheet date, turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the balance sheet date.

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. Costs are calculated as that proportion of contract value which turnover to date bears to total expected turnover for that contract. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable they will be recoverable.

Costs associated with contracts are included within work in progress to the extent that they cannot be matched with contract work accounted for as turnover.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Tax

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

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

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

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

Tangible assets

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

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

Depreciation

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

Asset class

Depreciation method and rate

Land and buildings

15 year straight line

Plant and machinery

15% to 25% straight line

Motor vehicles

20% to 25% straight line

 

Barnwood Limited

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

Trade debtors

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

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

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

Trade creditors

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

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

Borrowings

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

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

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

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee, they are otherwise classified as operating leases. Payments made under
operating leases are charged to the profit or loss account on a straight-line basis over the period of the lease.

Share capital

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

Dividends

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

Employee benefits
Short-term employee benefits are recognised as an expense in the period in which they are incurred.

Provisions for terminations benefits are recognised only when the company is demonstrably committed to terminate the employment of an employee or of a group of employees before their normal retirement date or to provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.

 

Barnwood Limited

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

Defined contribution pension obligation

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

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

Financial instruments

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

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

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

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

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

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

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

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

 

Barnwood Limited

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

 

3

Turnover

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

2023
 £

2022
 £

Rendering of services

122,345,768

95,829,814

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

2023
£

2022
£

United Kingdom

122,345,768

95,829,814

The amount of contract revenue recognised as revenue in the year was £122,345,768 (2022 - £95,829,814).

 

4

Operating profit

Arrived at after charging/(crediting)

2023
 £

2022
 £

Auditor's remuneration - audit of the financial statements

40,500

36,000

Auditor's remuneration - tax compliance services

8,800

8,500

Auditor's remuneration - other non-audit services

2,000

1,500

Profit on sale of tangible fixed assets

(71,744)

(32,817)

Depreciation

391,066

318,180

Operating lease expense - property

115,000

121,000

 

5

Other interest receivable and similar income

2023
 £

2022
 £

Other interest receivable

4,040

672

 

6

Interest payable and similar charges

2023
 £

2022
 £

Bank interest

10,897

8,358

Other interest payable

4,908

-

15,805

8,358

 

Barnwood Limited

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

 

7

Staff costs

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

2023
£

2022
£

Wages and salaries

12,173,718

10,003,161

Social security costs

1,117,320

1,038,773

Pension costs, defined contribution scheme

592,042

548,057

Compensation for loss of office

-

79,450

13,883,080

11,669,441

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

2023
 No.

2022
 No.

Site staff

99

82

Manufacturing

22

24

Administration and management staff

93

92

214

198

 

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
 £

2022
 £

Remuneration

1,768,648

1,182,134

Contributions paid to money purchase schemes

283,526

406,791

Compensation for loss of office

-

79,450

2,052,174

1,668,375

During the year the number of directors who were receiving benefits was as follows:

2023
No.

2022
No.

Accruing benefits under money purchase pension scheme

9

9

In respect of the highest paid director:

2023
£

2022
£

Remuneration

517,871

200,057

Company contributions to money purchase pension schemes

31,766

96,667

 

Barnwood Limited

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

 

9

Taxation

Tax on profit on ordinary activities

2023
 £

2022
 £

Current taxation

UK corporation tax

893,296

92,125

UK corporation tax adjustment to prior periods

94,201

(68,663)

987,497

23,462

Deferred taxation

Arising from origination and reversal of timing differences

134,494

105,571

Arising from changes in tax rates and laws

-

51,216

Arising from adjustments to prior periods

(120,000)

-

Total deferred taxation

14,494

156,787

Tax charge in the profit and loss account

1,001,991

180,249

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

The differences are reconciled below:

2023
£

2022
£

Profit before tax

4,272,382

1,488,275

Corporation tax at standard rate

1,013,625

282,772

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

11,321

11,894

Deferred tax expense relating to changes in tax rates or laws

-

51,216

Increase/(decrease) from adjustments to prior periods

94,201

(68,663)

Deferred tax credit from unrecognised tax loss or credit

-

(56,611)

Deferred tax credit from adjustments to tax charge in respect to prior periods

(120,000)

-

Tax decrease from other short-term timing differences

(3,798)

(6,542)

Tax decrease arising from group relief

-

(33,500)

Tax decrease from other tax adjustments, relief and transfers

(1,317)

-

Other tax effects for reconciliation between accounting profit and tax expense (income)

7,959

(317)

Total tax charge

1,001,991

180,249

A UK corporation tax rate of 25% (effective 1 April 2023) was substantively enacted on 24 May 2021, increasing from 19%. This will increase the group's future current tax charge accordingly. Deferred tax at 31 December 2023 has been calculated at a substantively enacted rate of 25% (2022 - 25%).

 

Barnwood Limited

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

Deferred tax

Deferred tax assets and liabilities

2023

Liability
£

Accelerated tax depreciation

258,000

Short term timing differences

(83,036)

174,964

2022

Liability
£

Accelerated tax depreciation

111,829

Short term timing differences

48,641

160,470

 

10

Tangible assets

Land and buildings
£

Plant and machinery
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 January 2023

138,843

1,384,971

933,866

2,457,680

Additions

139,976

377,572

505,340

1,022,888

Disposals

-

(229,165)

(316,346)

(545,511)

At 31 December 2023

278,819

1,533,378

1,122,860

2,935,057

Depreciation

At 1 January 2023

7,805

1,046,122

468,298

1,522,225

Charge for the year

18,228

132,182

240,656

391,066

Eliminated on disposal

-

(214,772)

(227,061)

(441,833)

At 31 December 2023

26,033

963,532

481,893

1,471,458

Carrying amount

At 31 December 2023

252,786

569,846

640,967

1,463,599

At 31 December 2022

131,038

338,849

465,568

935,455

 

11

Stock

2023
 £

2022
 £

Finished goods

105,809

110,913

 

12

Debtors

2023
 £

2022
 £

Trade debtors

11,299,779

10,514,756

Amounts owed by parent undertaking

4,908,991

1,680,071

Amounts owed by group undertakings

2,097,092

1,628,633

Other debtors

72,341

18,108

Prepayments

269,917

251,820

Gross amount due from customers for contract work

2,187,615

5,072,460

20,835,735

19,165,848

 

Barnwood Limited

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

Amounts due from parent and group undertakings are interest free and receivable on demand.

 

13

Creditors

2023
 £

2022
 £

Due within one year

Trade creditors

10,896,536

11,920,561

Amounts due to group undertakings

3,000

3,000

Social security and other taxes

2,926,685

4,369,924

Outstanding defined contribution pension costs

58,490

62,931

Other payables

-

24,700

Accrued expenses

3,167,114

1,628,078

Corporation tax liability

599,943

54,265

Gross amount due to customers for contract work

6,622,007

6,158,862

24,273,775

24,222,321

Amounts due to group undertakings are interest free and repayable on demand.

 

14

Provisions

Deferred tax
£

Latent defect provision
£

Total
£

At 1 January 2023

160,470

-

160,470

Additional provisions

14,494

511,271

525,765

At 31 December 2023

174,964

511,271

686,235

The latent defect provision is recognised when it is probable that costs will be incurred outside of the defect liability period.

 

15

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

6,794

6,794

6,794

6,794

         
 

16

Reserves

Called up share capital
This represents the nominal value of the issued equity share capital of the company.

Other reserves
This relates wholly to a capital redemption reserve, which represents the amount transferred to this reserve to maintain the company's capital arising from a purchase of own shares.

Retained earnings
This represents the cumulative profits of losses, net of dividends paid and other adjustments.

 

Barnwood Limited

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

 

17

Obligations under leases

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

115,000

115,000

Later than one year and not later than five years

460,000

460,000

Later than five years

1,035,000

1,150,000

1,610,000

1,725,000

The amount of non-cancellable operating lease payments recognised as an expense during the year was £115,000 (2022 - £121,000).

 

18

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £592,042 (2022 - £548,057).

Contributions totalling £58,490 (2022 - £62,931) were payable to the scheme at the end of the year and are included in creditors.

 

19

Related party transactions

The company has taken advantage of section 33 of FRS 102 to not disclose transactions and balances with fellow group companies who are 100% owned. Balances are disclosed in notes 12 and 13.

Transactions with directors:
During the year sales of £37,295 (2022 - £19,658) were made to directors of the company. At the balance sheet date the amount owed by directors totalled £56,953 (2022 - £19,658)

 

20

Parent and ultimate parent undertaking

The company's immediate and ultimate parent is Barnwood Group Limited, incorporated in England and Wales.

 The ultimate controlling party is Barnwood Holdings Limited on behalf of Barnwood Employee Ownership Trust, incorporated in England and Wales.