REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
Birchman Solutions Limited |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
Birchman Solutions Limited |
Birchman Solutions Limited (Registered number: 02862196) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Income Statement | 7 |
Other Comprehensive Income | 8 |
Statement of Financial Position | 9 |
Statement of Changes in Equity | 10 |
Statement of Cash Flows | 11 |
Notes to the Financial Statements | 12 |
Birchman Solutions Limited |
COMPANY INFORMATION |
for the Year Ended 31 December 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors and Chartered Accountants |
Units SCF 1 & 2 |
Western International Market |
Hayes Road |
Southall |
Middlesex |
UB2 5XJ |
Birchman Solutions Limited (Registered number: 02862196) |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
The directors present their Strategic Report as required by the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 Chapter 4A Section 414A, as updated in Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) 2016 for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
The principal activities of the company continue to be management and IT consultancy and software sales. The business is principally related to services around Digital Transformation, Business Change, Solution Implementation, Managed Services, Continuous Business Improvement, and sales of SAP software. |
The business continued to strengthen its market position in 2023, and overall, the directors are satisfied with the performance of the company. Throughout the year, the company continued to maintain and build on the relationships with its existing customer base whilst also adding significant new customers and increasing investment in sales, marketing and the development of intellectual property. |
A close relationship with SAP is essential as the company continues as a leading Value-Added Reseller (VAR) of their software licences and cloud services in the UK. During 2021 the company became a member of United VARs and this membership has strengthened the company's relationship with SAP and provided additional revenue. Through this membership the company is recognised as an SAP Platinum Partner with particular focus on RISE with SAP, GROW with SAP and the use of the SAP Business Technology Platform for integrations and innovations. |
Consulting services revenue remained steady and has shown significant growth potential as customers move to the latest version of ERP software (SAP S/4HANA), and customers increase investment in digital transformation. The company's focus on technology business change and transformation continues to support new consulting service engagements. |
FUTURE DEVELOPMENTS |
The directors expect the business to continue to be profitable in 2024. |
The business is well-placed to support the following industry trends and continue to grow: |
- Companies' strategy to become more agile through digital transformation. |
- Companies' IT strategy to move to cloud services, adopt new innovations and increase protection from cyber security threats. |
- For the SAP install base, the move from legacy SAP ERP to SAP S/4HANA. |
- Strong outlook for SAP S/4HANA Public Cloud as customers replace alternative legacy ERP solutions with SAP ERP and growing mid-market companies choose SAP ERP. |
- Companies' demand for continuous business improvement through process and solution optimisation, automation and the adoption of best practices. |
RESULTS AND KEY PERFORMANCE INDICATORS |
Revenues for the year to 31 December 2023 were £22,670,031 (2022: £20,479,518) and the profit for the year before taxation amounted to £6,459,833 (2022: £7,049,560). The company finished the year with net assets of £3,879,568 (2022: £4,938,690). |
The directors have a number of key performance indicators by which they measure the ongoing activities of the company. These measures include revenue, gross margin, operating margin, cash balances, aged receivables, staff utilisation and customer service level agreements. |
The company maintains a balance of permanent employees and external partners to ensure that the business is both adaptable to accommodate growth and flexible in terms of cost base. The resource mix allows the directors to manage any fluctuations in revenue, should they occur. |
Birchman Solutions Limited (Registered number: 02862196) |
STRATEGIC REPORT |
for the Year Ended 31 December 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The global economic challenges arising from the situation in and with Ukraine, the Middle East and China; and the increased rate of inflation continue to present challenges for the company and its customers. However, the company continues to be agile and competitive as a business. |
Despite the wider economic disruption caused by the challenges above, the directors believe that the business is well protected for the medium and long-term. |
The company has annuity revenue from a wide range of customers for both managed services and software licences. |
The business is modestly exposed to fluctuations in the exchange rate with the US dollar. However, a hedge is created by ensuring that any external costs related directly to a revenue contract in US dollars are in the same currency. |
ON BEHALF OF THE BOARD: |
Birchman Solutions Limited (Registered number: 02862196) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
The total distribution of dividends for the year ended 31 December 2023 will be £ |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Cooper Dawn Jerrom Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BIRCHMAN SOLUTIONS LIMITED |
Opinion |
We have audited the financial statements of Birchman Solutions Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BIRCHMAN SOLUTIONS LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We plan our audit procedures thoroughly prior to conducting fieldwork which includes data analytic techniques, sampling income and expenditure transactions, reviewing classes of transactions in the balance sheet in accordance with audit methodology as well as making enquiries with senior management and directors. Additional audit procedures are undertaken if we come across information that is inconsistent or we are unable to corroborate the information that we have been provided. |
There will be inherent limitations within an audit assignment and there could be a risk that we will not be able to identify irregularities which could lead to a material mis-statement on the financial statements or non-compliance with laws or regulations. There is an increased risk, in that the more compliance with a law or regulations are removed from events and transactions reflected within the financial statements, will result in ourselves being less likely to become aware of instances of non-compliance. There is a much greater risk of irregularities occurring due to fraud rather than error as fraud involves an act of deliberate concealment, forgery, collusion, omissions or misrepresentations. |
We have reviewed the entity's internal controls that directors and senior management oversee on a day-to-day basis, the strong internal controls implemented would be effective in allowing the detection of irregularities on a timely basis. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors and Chartered Accountants |
Units SCF 1 & 2 |
Western International Market |
Hayes Road |
Southall |
Middlesex |
UB2 5XJ |
Birchman Solutions Limited (Registered number: 02862196) |
INCOME STATEMENT |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
6,453,057 | 6,569,862 |
Other operating income |
OPERATING PROFIT | 5 |
Interest receivable and similar income |
6,459,833 | 7,055,783 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
Birchman Solutions Limited (Registered number: 02862196) |
OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Birchman Solutions Limited (Registered number: 02862196) |
STATEMENT OF FINANCIAL POSITION |
31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
CURRENT ASSETS |
Debtors | 10 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 12 |
Retained earnings | 13 |
SHAREHOLDERS' FUNDS |
3,879,568 | 4,938,690 |
The financial statements were approved by the Board of Directors and authorised for issue on |
Birchman Solutions Limited (Registered number: 02862196) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2023 |
Birchman Solutions Limited (Registered number: 02862196) |
STATEMENT OF CASH FLOWS |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 17 |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year | 18 | 7,608,103 |
Cash and cash equivalents at end of year | 18 | 11,922,113 | 12,019,538 |
Birchman Solutions Limited (Registered number: 02862196) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Birchman Solutions Limited is a |
2. | STATEMENT OF COMPLIANCE |
3. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Tangible fixed assets |
Fixtures and fittings | - |
Computer equipment | - |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Presentation currency |
The presentation currency is £ sterling. The figures in the financial statements are rounded to the nearest £ sterling. |
4. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
Administration | 9 | 3 |
Consultants | 26 | 23 |
31.12.23 | 31.12.22 |
£ | £ |
Directors' remuneration |
Birchman Solutions Limited (Registered number: 02862196) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
31.12.23 | 31.12.22 |
£ | £ |
Depreciation - owned assets |
Auditors' remuneration |
Foreign exchange differences | ( |
) |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.23 | 31.12.22 |
£ | £ |
Interest payable |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Current tax: |
UK corporation tax |
Tax on profit |
UK corporation tax has been charged at 25% (2022 - 19%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.23 | 31.12.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Apportionment of Tax Differences for 2022 and 2023 | (95,544 | ) | - |
Total tax charge | 1,518,955 | 1,337,831 |
8. | DIVIDENDS |
31.12.23 | 31.12.22 |
£ | £ |
Final |
Birchman Solutions Limited (Registered number: 02862196) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade debtors |
Other debtors |
Prepayments and accrued income |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
12. | CALLED UP SHARE CAPITAL |
Allotted and issued: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | £ | £ |
Share capital 1 | £1 | 100 | 100 |
Birchman Solutions Limited (Registered number: 02862196) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
13. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Profit for the year |
Dividends | ( |
) |
At 31 December 2023 |
14. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme. Contributions payable for the year are charged in the profit and loss accounts. |
15. | ULTIMATE PARENT COMPANY |
Birchman ESP Limited is regarded by the directors as being the company's ultimate parent company. |
16. | ULTIMATE CONTROLLING PARTY |
The controlling party is The Birchman Group Limited. |
The ultimate controlling party is |
The registered office for both The Birchman Group Limited and Birchman ESP Limited is located at Units SCF 1&2, Western International Market, Hayes Road, Southall, Middlesex, UB2 5XJ. |
17. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.12.23 | 31.12.22 |
£ | £ |
Profit before taxation |
Depreciation charges |
Finance costs | - | 6,223 |
Finance income | (6,776 | ) | - |
6,458,200 | 7,059,759 |
(Increase)/decrease in trade and other debtors | ( |
) |
Increase in trade and other creditors |
Cash generated from operations |
18. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 11,922,113 | 12,019,538 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 12,019,538 | 7,608,103 |
Birchman Solutions Limited (Registered number: 02862196) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2023 |
19. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank | 12,019,538 | (97,425 | ) | 11,922,113 |
12,019,538 | ( |
) | 11,922,113 |
Total | 12,019,538 | (97,425 | ) | 11,922,113 |