The director presents the strategic report for the year ended 31 December 2023.
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%.
| 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
| (3.41%)
| (0.55%)
| 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.
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
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.
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.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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).
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.
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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
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.
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.
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:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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, 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, 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.
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.
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.
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.
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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 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 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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
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.
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.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
Details of the company's subsidiaries at 31 December 2023 are as follows:
Included in other creditors is £1,743,002 (2022: £1,134,501) advanced in respect of the company's invoice discounting facility.
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.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
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:
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
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.