Company registration number 02478452 (England and Wales)
BROWNS BUILDERS MERCHANTS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BROWNS BUILDERS MERCHANTS LTD
COMPANY INFORMATION
Director
Mr J A Wheeler
Company number
02478452
Registered office
123a Old Nottingham Road
Derby
DE1 3QQ
Auditor
Xeinadin Audit Ltd
i2 Mansfield, Office Suite 0.3
Hamilton Court
Oakham Business Park
Mansfield
Nottinghamshire
NG18 5FB
BROWNS BUILDERS MERCHANTS LTD
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 20
BROWNS BUILDERS MERCHANTS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 31 December 2023.

Review of the Business

The company's principal activities continue to be the supply of building, roofing, bathroom and plumbing materials to both the UK trade (mainly house builders, commercial construction and RMI customers) and retail sector.

Our sales are split into two distinct categories, 'direct' and 'depot'. Direct goods are delivered from a supplier to a site/customer. The split in sales over the period was approximately 70% to 30% respectively.

Principal Risks and Uncertainties

The company is continually striving to expand its products and services to ensure it spreads any risks to future sustainability of the business for all stakeholders. Continued demand across the industry helps support this despite any continual uncertainty regarding the strength of the UK economy.

Development and Performance

The company's overall sales reduced by £8m compared to the previous year's increase of £10m, due to a reduction in activity across the industry during the year, with an overall gross profit of 14.3% (2022: 14.3%). Net profit after tax for the year was £203,975.

The company remains committed to supporting customers with good products and quality of service.

On behalf of the board

Mr J A Wheeler
Director
20 September 2024
BROWNS BUILDERS MERCHANTS LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The director presents his annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of builders merchants.

Results and dividends

The results for the year are set out on page 7.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr J A Wheeler
Auditor

In accordance with the company's articles, a resolution proposing that Xeinadin Audit Ltd be reappointed as auditor of the company will be put at a General Meeting.

Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

BROWNS BUILDERS MERCHANTS LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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
Mr J A Wheeler
Director
20 September 2024
BROWNS BUILDERS MERCHANTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BROWNS BUILDERS MERCHANTS LTD
- 4 -
Opinion

We have audited the financial statements of Browns Builders Merchants Ltd (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, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

Our responsibilities and the responsibilities of the director 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 director is 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.

Opinions on other matters prescribed by the Companies Act 2006

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

BROWNS BUILDERS MERCHANTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BROWNS BUILDERS MERCHANTS LTD
- 5 -
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 director's 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 director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

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

We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were The Companies Act 2006 and relevant taxation compliance regulations.

 

In addition, we also concluded that there are certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements, being those laws relating to environmental and occupational health and safety regulations, Coronavirus regulations, data protection and GDPR guidelines. The company also has to follow regulations from the Programme for the Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC) in respect of the timber that is purchases.

We understood how the company is complying with these frameworks and regulations by making enquiring of management and those responsible for compliance and corroborated these enquiries with reviews of board minutes and any available correspondence with legal advisors.

 

We assessed that there were risks of material impact on the financial statements from irregularities, including fraud from the overide of controls by management, timing and recognising of income and in the manipulation of the company's key performance indicators to meet targets.

BROWNS BUILDERS MERCHANTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BROWNS BUILDERS MERCHANTS LTD
- 6 -

Audit response to risks identified

 

We carried out procedures to respond to these risks, including enquiries of management about their systems and controls to identify these risks of irregularities, testwork to review a sample of journal entries made during the year, reviewing and testing assumptions made on accounting estimates for management biases and testing the timing and recognition of revenue.

 

Our audit procedures were designed to respond to risks of material misstatements 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 more sophisticated acts, including concealment, collusion or deliberately failing to record transactions through intentional misrepresentation.

 

There are inherent limitations within an audit, even though it has been properly planned and carried out in accordance with auditing standards and we cannot be responsible for preventing non-compliance and cannot be expected to detect non compliance with all laws and regulations.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

Christopher Holder BA BFP FCA (Senior Statutory Auditor)
For and on behalf of Xeinadin Audit Ltd
24 September 2024
Accountants &
Statutory Auditor
i2 Mansfield, Office Suite 0.3
Hamilton Court
Oakham Business Park
Mansfield
Nottinghamshire
NG18 5FB
BROWNS BUILDERS MERCHANTS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
2
47,208,271
55,433,693
Cost of sales
(40,466,931)
(47,516,698)
Gross profit
6,741,340
7,916,995
Distribution costs
(475,803)
(485,598)
Administrative expenses
(5,551,207)
(6,443,504)
Operating profit
3
714,330
987,893
Interest receivable and similar income
6
2,356
-
0
Interest payable and similar expenses
7
(434,640)
(213,577)
Profit before taxation
282,046
774,316
Tax on profit
8
(78,071)
(171,870)
Profit for the financial year
203,975
602,446
Other comprehensive income
Revaluation of tangible fixed assets
-
0
319,033
Total comprehensive income for the year
203,975
921,479

The profit and loss account has been prepared on the basis that all operations are continuing operations.

BROWNS BUILDERS MERCHANTS LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,411,110
1,559,786
Current assets
Stocks
12
2,442,404
2,887,347
Debtors
13
7,961,006
13,402,235
Cash at bank and in hand
415,861
687,919
10,819,271
16,977,501
Creditors: amounts falling due within one year
14
(8,477,614)
(14,598,847)
Net current assets
2,341,657
2,378,654
Total assets less current liabilities
5,752,767
3,938,440
Creditors: amounts falling due after more than one year
15
(1,648,916)
(15,089)
Provisions for liabilities
Deferred tax liability
17
54,314
77,789
(54,314)
(77,789)
Net assets
4,049,537
3,845,562
Capital and reserves
Called up share capital
19
160,000
160,000
Revaluation reserve
427,060
429,075
Profit and loss reserves
3,462,477
3,256,487
Total equity
4,049,537
3,845,562

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

The financial statements were approved and signed by the director and authorised for issue on 20 September 2024
Mr J A Wheeler
Director
Company registration number 02478452 (England and Wales)
BROWNS BUILDERS MERCHANTS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
160,000
111,282
3,777,801
4,049,083
Year ended 31 December 2022:
Profit
-
-
602,446
602,446
Other comprehensive income:
Revaluation of tangible fixed assets
-
319,033
-
319,033
Total comprehensive income
-
319,033
602,446
921,479
Dividends
9
-
-
(1,125,000)
(1,125,000)
Transfers
-
(1,240)
1,240
-
Balance at 31 December 2022
160,000
429,075
3,256,487
3,845,562
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
203,975
203,975
Transfers
-
(2,015)
2,015
-
Balance at 31 December 2023
160,000
427,060
3,462,477
4,049,537
BROWNS BUILDERS MERCHANTS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
6,352,998
(2,760,484)
Interest paid
(434,640)
(213,577)
Income taxes paid
(158,751)
(98,319)
Net cash inflow/(outflow) from operating activities
5,759,607
(3,072,380)
Investing activities
Purchase of tangible fixed assets
(2,085,771)
(93,643)
Proceeds from disposal of tangible fixed assets
24,094
2,050
Interest received
2,356
-
0
Net cash used in investing activities
(2,059,321)
(91,593)
Financing activities
Movement on invoice discounting account
(5,646,236)
4,582,006
Proceeds from new bank loans
1,750,000
-
0
Repayment of bank loans
(40,159)
-
0
Payment of finance leases obligations
(35,949)
(63,478)
Dividends paid
-
0
(1,125,000)
Net cash (used in)/generated from financing activities
(3,972,344)
3,393,528
Net (decrease)/increase in cash and cash equivalents
(272,058)
229,555
Cash and cash equivalents at beginning of year
687,919
458,364
Cash and cash equivalents at end of year
415,861
687,919
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Browns Builders Merchants Ltd is a private company limited by shares incorporated in England and Wales. The registered office address can be found on the Company information page.

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, modified to include the revaluation of freehold properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

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

 

 

The financial statements of the company are consolidated in the financial statements of Three Jays Limited. These consolidated financial statements are available from its registered office.

1.2
Going concern

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

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable net of VAT and other sales related taxes.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years. The asset has been fully amortised as at 31 December 2020.

1.5
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:

Freehold land and buildings
2% on cost
Leasehold land and buildings
over the period of the lease
Plant and equipment
33% on cost, 20% on cost and 10% on cost
Motor vehicles
20% on cost
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -

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.

1.6
Impairment of fixed assets

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

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, after making due allowance for obsolete and slow moving stock where appropriate.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

 

Debtors and creditors receivable/payable with a year

Debtors and creditors are recorded at transaction price receivable or payable within one year. Any losses arising from impairment are recognised in the profit and loss account within administrative expenses.

 

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. They are subsequently measured at amortised cost using the effective interest rate method, less impairment.

1.10
Taxation

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

Current tax

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

BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

.

1.12
Retirement benefits

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

1.13
Leases

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

 

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

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

2
Turnover

The turnover and profit before tax are attributable to the one principal activity of the company.

3
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
16,800
16,000
Depreciation of owned tangible fixed assets
181,887
104,178
Depreciation of tangible fixed assets held under finance leases
7,550
43,961
Loss on disposal of tangible fixed assets
20,916
3,799
Other operating lease charges
300,117
347,229
Hire of vehicles
161,676
173,914
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
4
Employees

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

2023
2022
Number
Number
Administration
12
12
Sales
60
61
Direct
11
11
Total
83
84

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,324,252
3,980,714
Social security costs
432,996
555,207
Pension costs
240,687
253,360
3,997,935
4,789,281
5
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
497,917
1,163,270
Company pension contributions to defined contribution schemes
4,000
38,500
501,917
1,201,770
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
497,916
912,220
Company pension contributions to defined contribution schemes
4,000
7,500

 

6
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
2,356
-
0
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank loans
430,829
209,815
Interest on finance leases and hire purchase contracts
3,811
3,762
434,640
213,577
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
101,546
158,867
Deferred tax
Origination and reversal of timing differences
(23,475)
13,003
Total tax charge
78,071
171,870

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

2023
2022
£
£
Profit before taxation
282,046
774,316
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
66,337
147,120
Tax effect of expenses that are not deductible in determining taxable profit
3,488
5,528
Group relief
(2,598)
-
0
Depreciation in excess of capital allowances
34,319
6,219
Deferred tax
(23,475)
13,003
Taxation charge for the year
78,071
171,870
9
Dividends
2023
2022
£
£
Interim paid
-
0
1,125,000
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
70,000
Amortisation and impairment
At 1 January 2023 and 31 December 2023
70,000
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
11
Tangible fixed assets
Freehold land and buildings
Short Leasehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2023
1,175,000
51,937
753,346
83,551
2,063,834
Additions
1,873,610
-
0
158,393
53,768
2,085,771
Disposals
-
0
-
0
(159,715)
(23,420)
(183,135)
Transfers
51,937
(51,937)
-
0
-
0
-
0
At 31 December 2023
3,100,547
-
0
752,024
113,899
3,966,470
Depreciation and impairment
At 1 January 2023
-
0
21,677
427,370
55,001
504,048
Depreciation charged in the year
28,657
30,260
112,981
17,539
189,437
Eliminated in respect of disposals
-
0
-
0
(115,025)
(23,100)
(138,125)
Transfers
51,937
(51,937)
-
0
-
0
-
0
At 31 December 2023
80,594
-
0
425,326
49,440
555,360
Carrying amount
At 31 December 2023
3,019,953
-
0
326,698
64,459
3,411,110
At 31 December 2022
1,175,000
30,260
325,976
28,550
1,559,786

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

2023
2022
£
£
Plant and equipment
32,590
105,951
Motor vehicles
19,756
-
0
52,346
105,951
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 17 -

Included in cost or valuation of land and buildings is freehold land of £1,049,444 (2022: £300,000) which is not depreciated.

Land and buildings with a carrying amount of £1,157,584 (2022 £1,175,000) were revalued on 8th February 2023 by FHP, independent valuer's not connected with the company, on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

Land and buildings are carried at valuation and cost. If revalued land and buildings were measured using the cost model, the carrying amounts would have been approximately £723,084 (2022 £746,018), being cost £964,569 (2022 £964,569 and depreciation £241,485 (2022 £218,551).

 

Land and buildings also include amounts valued at cost of £1,925,547 (2022 £Nil).

12
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,442,404
2,887,347
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,706,889
13,074,737
Amounts owed by group undertakings
7,231
15,240
Prepayments and accrued income
246,886
312,258
7,961,006
13,402,235
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loan
67,874
-
0
Obligations under finance leases
16
21,588
49,397
Trade creditors
4,145,466
4,656,914
Corporation tax
101,662
158,867
Other taxation and social security
230,592
406,867
Other creditors
3,021,075
8,667,311
Accruals and deferred income
889,357
659,491
8,477,614
14,598,847
BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Creditors: amounts falling due within one year
(Continued)
- 18 -

Included within other creditors is a secured debt, being the invoice discounting facility of £3,021,075 (2022: £8,667,311).

 

The invoice discounting facility is secured by a debenture, first legal charge over land and buildings, fixed and floating charges over all assets present and future, and a cross corporate guarantee with Three Jays Limited, the parent company.

 

The bank loan is secured against the property to which it relates.

15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loan
1,641,967
-
0
Obligations under finance leases
16
6,949
15,089
1,648,916
15,089

The bank loan is secured against the property to which it relates.

Amounts included above which fall due after five years are as follows:
Payable by instalments
1,310,626
-
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
21,588
49,397
In two to five years
6,949
15,089
28,537
64,486

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
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
54,314
77,789
2023
Movements in the year:
£
Liability at 1 January 2023
77,789
Credit to profit or loss
(23,475)
Liability at 31 December 2023
54,314
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
253,260
224,542

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.

19
Share capital
2023
2022
Ordinary share capital
£
£
Issued and fully paid
Ordinary shares of £1 each
160,000
160,000
20
Financial commitments, guarantees and contingent liabilities

As at 31 December the company had capital commitments of £178,252 (2022 £Nil) in respect of costs already contracted for capital equipment.

BROWNS BUILDERS MERCHANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
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
319,267
334,302
Between two and five years
739,421
1,062,701
In over five years
50,000
151,728
1,108,688
1,548,731
22
Ultimate controlling party

The ultimate controlling party is the director of the company, who is the director of the parent company, Three Jays Limited.

23
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
203,975
602,446
Adjustments for:
Taxation charged
78,071
171,870
Finance costs
434,640
213,577
Investment income
(2,356)
-
0
Loss on disposal of tangible fixed assets
20,916
3,799
Depreciation and impairment of tangible fixed assets
189,437
148,139
Movements in working capital:
Decrease/(increase) in stocks
444,943
(417,225)
Decrease/(increase) in debtors
5,441,229
(1,653,821)
Decrease in creditors
(457,857)
(1,829,269)
Cash generated from/(absorbed by) operations
6,352,998
(2,760,484)
24
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
687,919
(272,058)
415,861
Borrowings excluding overdrafts
-
(1,709,841)
(1,709,841)
Obligations under finance leases
(64,486)
35,949
(28,537)
623,433
(1,945,950)
(1,322,517)
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