Company registration number 05357617 (England and Wales)
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
COMPANY INFORMATION
Director
Mr. D P O'Toole
Secretary
Mr. C J O'Toole
Company number
05357617
Registered office
10 Drake Walk
Brigantine Place
Cardiff
United Kingdom
CF10 4AN
Auditor
Azets Audit Services
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 33
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
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 group was incorporated on 8th February 2005 and provides project management, installation, and merchandising services to the retail sector, supporting a number of the UK and Ireland's largest retailers. RMS has consistently delivered high-quality services, building long-term relationships with its clients.

For much of the early part of 2023, the UK economy provided a difficult trading environment for many businesses. Following economic instability in the final quarter of 2022, UK inflation was 9% during Q1 of 2023, with interest rates rising to a peak of 5.25% to combat inflationary pressures. This economic backdrop caused significant disruptions to the retail sector, which had a marked impact on RMS.

During the first half of 2023, numerous projects were postponed or cancelled, and turnover fell to an average of £600k per month, leading to a loss before interest, tax, depreciation, and amortisation (LBITDA) in the period of £343k. However, the second half of the year saw a strong recovery, with turnover increasing to £980k per month between June and December, driven by an uptick in client demand and a return to more stable trading conditions. RMS reported a positive EBITDA of £239k during this period, with gross profit margins also improving to 15.49%.

Key Financial Highlights

 

Dec '23

Dec '22

Apr '22

Turnover

£9,859,512

£8,448,572

£12,011,549

Turnover growth

(22.2%)

5.51%

8.38%

Gross profit margin

15.61%

14.06%

14.15%

Profit before tax

 

First half vs second half 2023 performance

 

 

Dec '23

Dec '22

Turnover

£9,859,512

£8,448,572

Turnover per month

(22.2%)

5.51%

Gross profit margin

15.61%

14.06%

(LBITDA)/EBITDA

 

(3.41%)

(0.55%)

 

(3.41%)

 

 

 

 

Jan to May'23

£3,009k

£602k

13.74%

(£343k)

 

(0.55%)

 

 

 

 

Jun to Dec '23

£6,850k

£979k

15.49%

£239k

 

3.34%

 

 

In addition to financial recovery, RMS made strong progress in expanding its customer base. Having provided services to 14 clients in 2022, the group grew this number to 26 in 2023, reflecting its expanding footprint in the UK and Irish retail sectors.

RMS has made significant strides in its transition from being a provider of transactional merchandising services to becoming a strategic partner for its clients. Historically, RMS focused on short-term, task-based merchandising services, but the group has since expanded its portfolio to include installation, retail construction, project management, and principal contractor services. This transformation enables RMS to offer comprehensive, end-to-end retail transformation solutions to its clients, building deeper, more integrated partnerships. The addition of complex services such as retail construction and project management further demonstrates RMS’s capability to manage larger, more strategic initiatives.

The group's long-term growth strategy has been further supported by refinancing with Aldermore Bank during the period, securing the financial stability necessary to underpin RMS’s continued growth and investment in expanded service offerings.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal Risks and Uncertainties

The group’s principal financial instruments comprise cash, bank borrowings, trade debtors, and trade creditors. These instruments expose RMS to a number of risks, including liquidity risk, credit risk, and interest rate risk.

RMS manages its liquidity risk by carefully monitoring cash borrowing requirements and ensuring that sufficient resources are available to meet operational needs. The company aims to maximise interest income while minimising interest expenses through effective cash flow management.

The group manages credit risk through a robust customer verification process for those seeking credit terms. Trade debtors are monitored closely, and provisions are made for doubtful debts where necessary to mitigate the risk of non-payment.

RMS is exposed to fluctuations in interest rates on its borrowings. The group actively monitors market conditions to minimise exposure to variable rates, working closely with financial partners to manage borrowing costs.

Economic volatility in the retail sector presents a risk to the group, particularly in the form of delayed or cancelled estate development programs. While the turbulence in the retail market poses challenges, RMS’s diversification into a broader range of services—such as installation and retail construction—helps to mitigate against the potential impact of these fluctuations.

The Group recognises a balance within Intangible assets of £2.1m. The Directors have reviewed the carrying value of this balance and initiated a joint venture to commercialise a significant intangible asset owned by the subsidiary, RMS Technology Ltd. The current business plan projects that the balance will be fully recoverable over the next 5-10 years, providing long-term financial stability.

By managing these risks effectively, RMS is positioned to maintain its operational and financial stability, even in the face of external uncertainties. The company’s broader service offering allows it to be more resilient to economic shocks and market turbulence, supporting long-term growth and value creation.

Conclusion

2023 was a year of challenges and recovery for RMS. Despite a difficult start, the group demonstrated resilience and adaptability, successfully positioning itself for long-term success. By expanding its service offerings, growing its client base, restructuring its management team and securing long-term financial stability, RMS is well-placed to continue its evolution into an important strategic partner for its customers, leading reliable retail transformations across the UK and Ireland.

On behalf of the board

Mr. D P O'Toole
Director
28 September 2024
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

 

The prior year financial statements represent a 8 month period. The prior period end was shortened from 30 April to 31 December. As a result the comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.

Principal activities

The principal activity of the company continued to be that of providing merchandising services to the retail sector, supporting a number of the largest UK retailers.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The director does not recommend payment of a further 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. D P O'Toole
Auditor

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

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
Mr. D P O'Toole
Director
28 September 2024
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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 group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
- 5 -

Qualified opinion

We have audited the financial statements of Retail Merchandising Services Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

Basis for qualified 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 group and parent 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.

 

Parent company

Included within other debtors falling due after more than one year, is an amount of £2.113m from a subsidiary company. The subsidiary company is not currently actively trading and recovery of this balance is dependent on the subsidiary being able to generate profits and cash from its investment in a joint venture which the subsidiary is a member of. That joint venture is currently developing its business and currently has no confirmed revenue streams. In this context there is material uncertainty as to the recoverability of this balance.

 

Group

Included within fixed assets is £2.1m of Intangible Assets. The recovery of the carrying value of this asset is dependent on the Group’s ability to derive income from the exploitation of the asset. The group currently has no potential income stream other than charging the joint venture described above for the use of the assets. Given the uncertainty as to the future revenue streams of that joint venture it is considered that there is also material uncertainty as to the recoverability of this balance.

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 group's and parent 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.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
- 6 -

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:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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 parent 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 parent 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.

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.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
- 7 -

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Craig Yearsley FCCA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
30 September 2024
Chartered Accountants
Statutory Auditor
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,859,512
8,448,573
Cost of sales
(8,320,755)
(7,260,350)
Gross profit
1,538,757
1,188,223
Administrative expenses
(1,810,694)
(1,238,593)
Operating loss
4
(271,937)
(50,370)
Interest receivable and similar income
8
-
0
3
Interest payable and similar expenses
9
(66,540)
(15,911)
Loss before taxation
(338,477)
(66,278)
Tax on loss
10
31,705
70,178
(Loss)/profit for the financial year
(306,772)
3,900
(Loss)/profit for the financial year is all attributable to the owners of the parent company.
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
(Loss)/profit for the year
(306,772)
3,900
Other comprehensive income
-
-
Total comprehensive income for the year
(306,772)
3,900
Total comprehensive income for the year is all attributable to the owners of the parent company.
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
2,326,414
2,378,231
Tangible assets
12
12,149
14,924
2,338,563
2,393,155
Current assets
Stocks
15
1,500
1,500
Debtors
16
3,641,863
2,926,164
Cash at bank and in hand
181,903
79,526
3,825,266
3,007,190
Creditors: amounts falling due within one year
17
(3,735,206)
(2,518,275)
Net current assets
90,060
488,915
Total assets less current liabilities
2,428,623
2,882,070
Creditors: amounts falling due after more than one year
18
(299,733)
(412,133)
Provisions for liabilities
Deferred tax liability
20
-
0
34,275
-
(34,275)
Net assets
2,128,890
2,435,662
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
2,128,790
2,435,562
Total equity
2,128,890
2,435,662
The financial statements were approved and signed by the director and authorised for issue on 28 September 2024
28 September 2024
Mr. D P O'Toole
Director
Company registration number 05357617 (England and Wales)
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
218,414
270,231
Tangible assets
12
12,149
14,924
Investments
13
1
1
230,564
285,156
Current assets
Stocks
15
1,500
1,500
Debtors
16
5,754,673
5,039,164
Cash at bank and in hand
178,118
75,150
5,934,291
5,115,814
Creditors: amounts falling due within one year
17
(3,733,117)
(2,518,276)
Net current assets
2,201,174
2,597,538
Total assets less current liabilities
2,431,738
2,882,694
Creditors: amounts falling due after more than one year
18
(299,733)
(412,133)
Provisions for liabilities
Deferred tax liability
20
-
0
34,275
-
(34,275)
Net assets
2,132,005
2,436,286
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
2,131,905
2,436,186
Total equity
2,132,005
2,436,286

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £304,281 (2022 - £4,005 profit).

The financial statements were approved and signed by the director and authorised for issue on 28 September 2024
28 September 2024
Mr. D P O'Toole
Director
Company registration number 05357617 (England and Wales)
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 May 2022
100
2,431,662
2,431,762
Year ended 31 December 2022:
Profit and total comprehensive income
-
3,900
3,900
Balance at 31 December 2022
100
2,435,562
2,435,662
Year ended 31 December 2023:
Loss and total comprehensive income
-
(306,772)
(306,772)
Balance at 31 December 2023
100
2,128,790
2,128,890
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 May 2022
100
2,432,180
2,432,280
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
4,006
4,006
Balance at 31 December 2022
100
2,436,186
2,436,286
Year ended 31 December 2023:
Profit and total comprehensive income
-
(304,281)
(304,281)
Balance at 31 December 2023
100
2,131,905
2,132,005
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
322,174
2,042,402
Interest paid
(66,540)
(15,911)
Income taxes paid
(19,574)
(2,293)
Net cash inflow from operating activities
236,060
2,024,198
Investing activities
Purchase of intangible assets
(15,984)
(2,165,106)
Purchase of tangible fixed assets
(5,299)
(3,089)
Interest received
-
0
3
Net cash used in investing activities
(21,283)
(2,168,192)
Financing activities
Repayment of bank loans
(112,400)
4,836
Net cash (used in)/generated from financing activities
(112,400)
4,836
Net increase/(decrease) in cash and cash equivalents
102,377
(139,158)
Cash and cash equivalents at beginning of year
79,526
218,684
Cash and cash equivalents at end of year
181,903
79,526
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
28
322,765
(65,471)
Interest paid
(66,540)
(15,911)
Income taxes paid
(19,574)
(2,293)
Net cash inflow/(outflow) from operating activities
236,651
(83,675)
Investing activities
Purchase of intangible assets
(15,984)
(57,106)
Purchase of tangible fixed assets
(5,299)
(3,089)
Interest received
-
0
3
Net cash used in investing activities
(21,283)
(60,192)
Financing activities
Repayment of bank loans
(112,400)
4,836
Net cash (used in)/generated from financing activities
(112,400)
4,836
Net increase/(decrease) in cash and cash equivalents
102,968
(139,031)
Cash and cash equivalents at beginning of year
75,150
214,181
Cash and cash equivalents at end of year
178,118
75,150
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
Company information

Retail Merchandising Services Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of Retail Merchandising Services Limited and all of its subsidiaries.

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 to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Retail Merchandising Services Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

These financial statements are prepared on the going concern basis. The directors have a expectation that the group will continue in operational existence for the foreseeable future. However, the directors are aware of certain uncertainties which may cause doubt on the group's ability to continue as a going concern.

 

The group has generated losses before tax of £338,477 in the current year and losses before tax of £66,278 in the prior year. The group has cash balances of £181,903 (2022: £79,526) and there is a strong reliance on the invoice discounting facility.

 

Post year end, the group has generated profits of £14,895 and secured additional financing capacity on the invoice discounting facility which has enabled additional headroom from a cash perspective.

 

At the date of approval of the financial statements, the director has reviewed the cash flow forecast with reliance expected to last on the invoice discounting facility, however, the group are forecasting this reliance to reduce moving forward. The group has agreed a new contract with one of their key customers and are currently in negotiations for renewal with another key customer, however, at the time of signing, this contract has not been legally agreed. Forecasts for the next 18 months have been prepared and show a profitable position, as well as sufficient cash to pay liabilities as they fall due.

 

The financial statements do not include the adjustments that would result if the group were unable to continue as a going concern. In the event the group ceased to be a going concern, the adjustments would include writing down the carrying value of assets, to their recoverable amount and providing for any further liabilities that might arise.

 

Notwithstanding the uncertainties described above, on the basis that further support can be agreed in the relevant timescale and values, the directors have a reasonable expectation that the group can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report. As such the financial statements have been prepared on a going concern basis.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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

Development costs
8 years
1.7
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:

Computer equipment
10-50% on cost
Fixtures and fittings
25% on cost

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 recognised in the profit and loss account.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.9
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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

 

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

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

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.11
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.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.12
Financial instruments

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

 

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

 

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

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

1.14
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax 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.

 

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.15
Employee benefits

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

 

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

 

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

1.16
Retirement benefits

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

1.17
Leases

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

2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing the impairment of trade and other debtors, management considers factors including the future profitability of the debtor, the ageing profile of debtors and historical experience. See note 16 for the net carrying amount of the debtors.

Intangible assets

Management reviews the carrying value of the intangible assets at each reporting date based on the expected future benefit to the company. There is considerable judgement in terms of future sales of the products as well as the expected margins and cost base related to these sales.

 

Intangible assets include software for future sales. These have not yet been amortised, however there is estimation uncertainty over the future benefit that will be derived from the assets, particularly given there are no binding contracts for future sales. While the company has products which it is able to sell, until sales commence at any volume there is significant estimation as to what amortisation rate is to be utilised.

 

See note 11 for the carrying amount of intangible assets.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
9,859,512
8,448,573
2023
2022
£
£
Turnover analysed by geographical market
9,859,512
8,448,573
2023
2022
£
£
Other revenue
Interest income
-
3
4
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging:
Depreciation of owned tangible fixed assets
8,074
5,616
Amortisation of intangible assets
67,801
47,440
Operating lease charges
52,736
10,931
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
15,350
12,650
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Direct Labour
203
206
203
206
Management & Administration
21
30
21
30
Total
224
236
224
236
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 24 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
5,042,371
4,496,665
5,042,371
4,496,665
Social security costs
460,950
436,675
460,950
436,675
Pension costs
137,961
89,852
137,961
89,852
5,641,282
5,023,192
5,641,282
5,023,192
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
76,665
66,730
Company pension contributions to defined contribution schemes
7,920
3,680
84,585
70,410
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
3
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
-
3
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
66,540
15,911
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
2,570
(102,160)
Adjustments in respect of prior periods
-
0
(2,293)
Total current tax
2,570
(104,453)
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
2023
2022
£
£
(Continued)
- 25 -
Deferred tax
Origination and reversal of timing differences
(34,275)
34,275
Total tax credit
(31,705)
(70,178)

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

2023
2022
£
£
Loss before taxation
(338,477)
(66,278)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(64,311)
(12,593)
Tax effect of expenses that are not deductible in determining taxable profit
13,890
1,861
Unutilised tax losses carried forward
-
0
20
Adjustments in respect of prior years
-
0
(57,422)
Effect of change in corporation tax rate
(16,735)
(1,868)
Group relief
(2)
-
0
35,453
-
0
-
0
(176)
Taxation credit
(31,705)
(70,178)
11
Intangible fixed assets
Group
Development costs
£
Cost
At 1 January 2023
3,215,927
Additions - internally developed
15,984
At 31 December 2023
3,231,911
Amortisation and impairment
At 1 January 2023
837,696
Amortisation charged for the year
67,801
At 31 December 2023
905,497
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Intangible fixed assets
(Continued)
- 26 -
Carrying amount
At 31 December 2023
2,326,414
At 31 December 2022
2,378,231
Company
Development costs
£
Cost
At 1 January 2023
1,107,927
Additions - internally developed
15,984
At 31 December 2023
1,123,911
Amortisation and impairment
At 1 January 2023
837,696
Amortisation charged for the year
67,801
At 31 December 2023
905,497
Carrying amount
At 31 December 2023
218,414
At 31 December 2022
270,231
12
Tangible fixed assets
Group
Computer equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
53,092
40,607
93,699
Additions
2,259
3,040
5,299
At 31 December 2023
55,351
43,647
98,998
Depreciation and impairment
At 1 January 2023
38,567
40,208
78,775
Depreciation charged in the year
7,616
458
8,074
At 31 December 2023
46,183
40,666
86,849
Carrying amount
At 31 December 2023
9,168
2,981
12,149
At 31 December 2022
14,525
399
14,924
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Tangible fixed assets
(Continued)
- 27 -
Company
Computer equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
53,092
40,607
93,699
Additions
2,259
3,040
5,299
At 31 December 2023
55,351
43,647
98,998
Depreciation and impairment
At 1 January 2023
38,567
40,208
78,775
Depreciation charged in the year
7,616
458
8,074
At 31 December 2023
46,183
40,666
86,849
Carrying amount
At 31 December 2023
9,168
2,981
12,149
At 31 December 2022
14,525
399
14,924
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
1
1
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
1
Carrying amount
At 31 December 2023
1
At 31 December 2022
1
14
Subsidiaries

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

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
RMS Technology Limited
10 Drake Walk, Brigantine Place, Cardiff, Wales, CF10 4AN
Ordinary
100.00
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
1,500
1,500
1,500
1,500
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,031,361
2,438,177
3,031,361
2,438,177
Gross amounts owed by contract customers
391,850
191,000
391,850
191,000
Corporation tax recoverable
4,878
4,725
4,878
4,725
Other debtors
120,770
230,812
120,580
230,812
Prepayments and accrued income
93,004
61,450
93,004
61,450
3,641,863
2,926,164
3,641,673
2,926,164
Amounts falling due after more than one year:
Other debtors
-
0
-
0
2,113,000
2,113,000
Total debtors
3,641,863
2,926,164
5,754,673
5,039,164
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
19
112,400
112,400
112,400
112,400
Trade creditors
535,630
311,992
534,490
311,992
Amounts owed to group undertakings
(1)
(1)
-
0
-
0
Corporation tax payable
184
17,035
184
17,035
Other taxation and social security
345,030
473,749
345,030
473,749
Other creditors
2,300,499
1,206,232
2,300,499
1,206,232
Accruals and deferred income
441,464
396,868
440,514
396,868
3,735,206
2,518,275
3,733,117
2,518,276

Included in other creditors is £1,743,002 (2022: £1,134,501) advanced in respect of the company's invoice discounting facility.

RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
299,733
412,133
299,733
412,133
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
412,133
524,533
412,133
524,533
Payable within one year
112,400
112,400
112,400
112,400
Payable after one year
299,733
412,133
299,733
412,133

In June 2020 the company entered into a loan for £700,000 with Lloyds Bank Commercial Finance Limited.

 

In August 2022, a new loan was taken out with Barclays Bank PLC and the loan with Lloyds was repaid on the 15th of August 2022.

 

Barclays hold a fixed charge over fixed assets, intellectual property, debtors, cash, goodwill and uncalled capital both present and future and a floating charge over all assets and rights not subject to the fixed charge.

 

The loan is repayable in 60 equal monthly instalments of £9,367 with the first instalment being paid in August 2022. The loan incurs interest at a rate of 4.50% above base rate for the duration of the repayment period.

 

20
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
-
41,804
Tax losses
-
(67)
Spare 1
-
(7,462)
-
34,275
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Deferred taxation
(Continued)
- 30 -
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
-
41,804
Tax losses
-
(67)
Spare 1
-
(7,462)
-
34,275
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
34,275
34,275
Credit to profit or loss
(34,275)
(34,275)
Asset at 31 December 2023
-
-

 

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
137,961
89,852

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.

22
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
23
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
191,834
139,534
95,917
69,767
Between two and five years
136,848
193,768
68,424
96,884
328,682
333,302
164,341
166,651
24
Related party transactions
Transactions with related parties

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

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Group
Other related parties
98,737
71,330
323,169
162,090
Company
Other related parties
98,737
71,330
323,169
162,090

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Other related parties
-
63,333
Company
Other related parties
-
63,333

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Other related parties
118,551
222,272
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Related party transactions
(Continued)
- 32 -
Company
Entities over which the company has control, joint control or significant influence
2,113,000
2,113,000
Other related parties
118,511
222,272
25
Directors' transactions

At the year end, the directors owed £10,545 (2022: £0) to the company. These loans bear nil interest, are unsecured and repayable on demand. £10,000 has been repaid post year end.

 

In addition, £12,000 in relation to legal fees was loaned to directors during the year which has been written off.

26
Controlling party

The controlling party is D P O'Toole.

27
Cash generated from group operations
2023
2022
£
£
(Loss)/profit for the year after tax
(306,772)
3,900
Adjustments for:
Taxation credited
(31,705)
(70,178)
Finance costs
66,540
15,911
Investment income
-
0
(3)
Amortisation and impairment of intangible assets
67,801
47,440
Depreciation and impairment of tangible fixed assets
8,074
5,616
Movements in working capital:
(Increase)/decrease in debtors
(715,546)
1,282,909
Increase in creditors
1,233,782
756,807
Cash generated from operations
322,174
2,042,402
RETAIL MERCHANDISING SERVICES LTD (CONSOLIDATION)
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
28
Cash generated from/(absorbed by) operations - company
2023
2022
£
£
(Loss)/profit for the year after tax
(304,281)
4,006
Adjustments for:
Taxation credited
(31,705)
(70,178)
Finance costs
66,540
15,911
Investment income
-
0
(3)
Amortisation and impairment of intangible assets
67,801
47,440
Depreciation and impairment of tangible fixed assets
8,074
5,616
Movements in working capital:
Increase in debtors
(715,356)
(830,090)
Increase in creditors
1,231,692
761,827
Cash generated from/(absorbed by) operations
322,765
(65,471)
29
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
79,526
102,377
181,903
Borrowings excluding overdrafts
(524,533)
112,400
(412,133)
(445,007)
214,777
(230,230)
30
Analysis of changes in net debt - company
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
75,150
102,968
178,118
Borrowings excluding overdrafts
(524,533)
112,400
(412,133)
(449,383)
215,368
(234,015)
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