IRIS Accounts Production v24.1.0.578 07775730 Board of Directors 31.12.23 1.1.23 31.12.23 31.12.23 hiring out plant and machinery. true true false true true false false false true false Ordinary 0 Preference 0 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Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2023

for

City Tool Hire Limited

City Tool Hire Limited (Registered number: 07775730)

Contents of the Consolidated Financial Statements
for the Year Ended 31 December 2023










Page

Company Information 1

Group Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Consolidated Statement of Comprehensive Income 8

Consolidated Balance Sheet 9

Company Balance Sheet 10

Consolidated Statement of Changes in Equity 11

Company Statement of Changes in Equity 12

Consolidated Cash Flow Statement 13

Notes to the Consolidated Cash Flow Statement 14

Notes to the Consolidated Financial Statements 16


City Tool Hire Limited

Company Information
for the Year Ended 31 December 2023







DIRECTORS: W Burgess
R Burgess
L Burgess





SECRETARY: Mrs R Burgess





REGISTERED OFFICE: 5-6 Boeing Way
International Trading Estate
Southall
Middlesex
UB2 5LB





REGISTERED NUMBER: 07775730 (England and Wales)





AUDITORS: Williams & Co Epsom LLP
Statutory Auditors
8-10 South Street
Epsom
Surrey
KT18 7PF

City Tool Hire Limited (Registered number: 07775730)

Group Strategic Report
for the Year Ended 31 December 2023


The directors present their strategic report of the company and the group for the year ended 31 December 2023.

REVIEW OF BUSINESS
The group has enjoyed another successful year with turnover of £20.65m (2022: £15.79m) resulting in the group reporting a profit before tax of £2.91m (2022 £2.02m). The growth in business levels has continued after the year end as the group expands its market share and wins new business.

Despite the increased turnover and gross profit earned by the group, there has also been an increase in costs also, mainly salaries, as the group builds a solid infrastructure as it expands.

PRINCIPAL RISKS AND UNCERTAINTIES
The group continues to operate in a very competitive environment and it continues to monitor both its cost base and pricing strategy to generate profits

The group maintained its objectives to ensure its liquidity and net asset value will be used to fund any expansion in activities in this financial year. To remain competitive, the group needs to invest in new equipment to replace heavy duty use and also keep in with technological changes.

The group and the whole industry have been met with the ongoing challenge that the Ukraine crises has brought to the supply chain, but have managed to remain largely unaffected.

GROUP STRATEGY
The group's mission is to revolutionize the future of tool hire and provide excellent customer experience. World-class operations is key to our value proposition, and providing a frictionless, fast & accurate service standard that drives retention and loyalty whilst increasing the market share.

Our ESG plan drives our commitment to keeping colleagues and customers safe. We are committed to delivering the highest-quality services with all applicable laws and standards. We aim to be the best place to work for our employees, providing opportunities for learning and development, embracing diversity and inclusion, and assuring a safe and healthy work environment.

The group plans to consolidate its present position and will continue to increase its retained reserves, so it is able to finance necessary investment without third party debt. The group continues to look for expansion opportunities, acquiring a subsidiary in August 2023.

KEY PERFORMANCE INDICATORS
The group monitors carefully its KPIs on a monthly basis and the directors use these measures to assess how the business is performing as well as identifying any potential risks.

NPS: The group is committed to maintain its Net Promoter Score (NPS) above 82, measuring how likely our customers are to recommend City Hire, and continues to strengthen its position in the hire industry.

GER: The group constantly monitors and tracks Gross Error Rate KPI to be 98% or above to eliminate delayed deliveries, breakdowns on faulty equipment, errors in site address and incomplete or wrong equipment selections.

POLICY ON PAYMENT OF CREDITORS
The group has strong relationships with its suppliers and ensures that payment is made in line with the terms of that supplier.

ON BEHALF OF THE BOARD:





W Burgess - Director


30 September 2024

City Tool Hire Limited (Registered number: 07775730)

Report of the Directors
for the Year Ended 31 December 2023


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

DIVIDENDS
No interim dividends were paid during the year ended 31 December 2023.

The directors recommend final dividends per share as follows:

Ordinary £1 shares £308
Preference £1 shares NIL

The total distribution of dividends for the year ended 31 December 2023 will be £ 615,000 .

FUTURE DEVELOPMENTS
The group plans to expand operations to additional sites within the UK.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

W Burgess
R Burgess
L Burgess

POLITICAL DONATIONS AND EXPENDITURE
No donations were made in the year of a political nature.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

City Tool Hire Limited (Registered number: 07775730)

Report of the Directors
for the Year Ended 31 December 2023


AUDITORS
The auditors, Williams & Co Epsom LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:



W Burgess - Director


30 September 2024

Report of the Independent Auditors to the Members of
City Tool Hire Limited


Opinion
We have audited the financial statements of City Tool Hire Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2023 and of the group's profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the 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 directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
City Tool Hire Limited


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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept 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.

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

In preparing the financial statements, the directors are responsible for assessing the group's and 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 directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Report of the Independent Auditors to the Members of
City Tool Hire Limited


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

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our assessment of the financial statement's susceptibility to material misstatement, including how fraud may occur, highlighted that revenue recognition and fixed assets would be key areas of focus for the audit.

In determining the audit procedures, we took into account our assessment of the group's control environment and based on our findings our work was predominantly substantive in nature.

The nature of the services provided by the company mean that assets are hired out over a period of time and so revenue should be recognised over the life of the hire period. Therefore, revenue could be misstated by either the early or late recognition of satisfaction of a performance obligation.

The sales cut-off was tested to reduce the risk levels, alongside a review and walkthrough of the systems and controls that the company has in place regarding revenue recognition.

A sample of fixed additions and disposals were tested back to supporting documentation to ensure that the carrying amount of the asset classes was valued correctly and that proceeds are correctly recognised.

Third party confirmations were obtained from suppliers and the company's bankers.

Enquires of management were undertaken to gain an understanding of the laws and regulations that affect the company. Health and safety regulations are a key factor in ensuring that the warehouse is fully operational at all times. The group has adopted OHSAS 18001 standards and undergoes H&S audits.

The group is also bound to comply with FRS 102, and we have undertaken a review of the accounting policies in place for compliance with the relevant standards.

Enquires of management were undertaken with regards the group's policies and procedures surrounding fraud risk. The key focus of management is instilling a strong culture within its workforce and promoting its core values. The are clear chains of command and segregation of duties to reduce the risk of fraud. Furthermore, regular board meetings are held to review monthly management accounts which may highlight variances.

We have tested controls over payment authorisations and sample payments from the bank.

As with any audit there is a higher risk of non-detection of fraud, as these events may involve collusion, forgery, override of controls and misrepresentation. Our audit procedures are designed to detect material misstatement and as such we cannot be expected to detect all non-compliance with all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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




Paul Smith BSc FCA (Senior Statutory Auditor)
for and on behalf of Williams & Co Epsom LLP
Statutory Auditors
8-10 South Street
Epsom
Surrey
KT18 7PF

30 September 2024

City Tool Hire Limited (Registered number: 07775730)

Consolidated
Statement of Comprehensive
Income
for the Year Ended 31 December 2023

2023 2022
Notes £    £   

TURNOVER 3 20,649,345 15,791,828

Cost of sales (11,121,012 ) (8,779,358 )
GROSS PROFIT 9,528,333 7,012,470

Administrative expenses (6,526,296 ) (4,976,746 )
OPERATING PROFIT 5 3,002,037 2,035,724

Interest receivable and similar income 19,870 3,205
3,021,907 2,038,929

Interest payable and similar expenses 6 (116,368 ) (23,812 )
PROFIT BEFORE TAXATION 2,905,539 2,015,117

Tax on profit 7 (801,884 ) (420,805 )
PROFIT FOR THE FINANCIAL YEAR 2,103,655 1,594,312

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

2,103,655

1,594,312

Profit attributable to:
Owners of the parent 2,103,655 1,594,312

Total comprehensive income attributable to:
Owners of the parent 2,103,655 1,594,312

City Tool Hire Limited (Registered number: 07775730)

Consolidated Balance Sheet
31 December 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 609,340 371,336
Tangible assets 11 9,513,293 5,366,012
Investments 12 - -
10,122,633 5,737,348

CURRENT ASSETS
Stocks 13 190,070 188,003
Debtors 14 4,937,789 3,636,551
Cash at bank and in hand 806,485 1,244,453
5,934,344 5,069,007
CREDITORS
Amounts falling due within one year 15 5,543,051 2,786,375
NET CURRENT ASSETS 391,293 2,282,632
TOTAL ASSETS LESS CURRENT
LIABILITIES

10,513,926

8,019,980

CREDITORS
Amounts falling due after more than one
year

16

(1,454,522

)

(693,938

)

PROVISIONS FOR LIABILITIES 19 (723,949 ) (479,242 )
NET ASSETS 8,335,455 6,846,800

CAPITAL AND RESERVES
Called up share capital 20 1,002,000 1,002,000
Retained earnings 21 7,333,455 5,844,800
SHAREHOLDERS' FUNDS 8,335,455 6,846,800

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2024 and were signed on its behalf by:




W Burgess - Director



L Burgess - Director


City Tool Hire Limited (Registered number: 07775730)

Company Balance Sheet
31 December 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 321,288 371,336
Tangible assets 11 8,874,400 5,366,012
Investments 12 1,000,000 -
10,195,688 5,737,348

CURRENT ASSETS
Stocks 13 190,070 188,003
Debtors 14 4,937,789 3,636,351
Cash at bank and in hand 806,485 1,244,453
5,934,344 5,068,807
CREDITORS
Amounts falling due within one year 15 5,543,251 2,786,376
NET CURRENT ASSETS 391,093 2,282,431
TOTAL ASSETS LESS CURRENT
LIABILITIES

10,586,781

8,019,779

CREDITORS
Amounts falling due after more than one
year

16

(1,454,522

)

(693,938

)

PROVISIONS FOR LIABILITIES 19 (698,401 ) (479,242 )
NET ASSETS 8,433,858 6,846,599

CAPITAL AND RESERVES
Called up share capital 20 1,002,000 1,002,000
Retained earnings 21 7,431,858 5,844,599
SHAREHOLDERS' FUNDS 8,433,858 6,846,599

Company's profit for the financial year 2,202,259 1,580,703

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2024 and were signed on its behalf by:





W Burgess - Director


City Tool Hire Limited (Registered number: 07775730)

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

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2022 1,002,000 4,676,488 5,678,488

Changes in equity
Dividends - (426,000 ) (426,000 )
Total comprehensive income - 1,594,312 1,594,312
Balance at 31 December 2022 1,002,000 5,844,800 6,846,800

Changes in equity
Dividends - (615,000 ) (615,000 )
Total comprehensive income - 2,103,655 2,103,655
Balance at 31 December 2023 1,002,000 7,333,455 8,335,455

City Tool Hire Limited (Registered number: 07775730)

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

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2022 1,002,000 4,689,896 5,691,896

Changes in equity
Dividends - (426,000 ) (426,000 )
Total comprehensive income - 1,580,703 1,580,703
Balance at 31 December 2022 1,002,000 5,844,599 6,846,599

Changes in equity
Dividends - (615,000 ) (615,000 )
Total comprehensive income - 2,202,259 2,202,259
Balance at 31 December 2023 1,002,000 7,431,858 8,433,858

City Tool Hire Limited (Registered number: 07775730)

Consolidated Cash Flow Statement
for the Year Ended 31 December 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 5,452,310 3,026,327
Interest paid (54,520 ) -
Interest element of hire purchase payments
paid

(61,848

)

(23,812

)
Tax paid (256,830 ) (217,741 )
Net cash from operating activities 5,079,112 2,784,774

Cash flows from investing activities
Purchase of intangible fixed assets (79,818 ) -
Purchase of tangible fixed assets (4,388,912 ) (2,931,293 )
Sale of tangible fixed assets 672,246 788,840
Acquisition of subsidiary (1,445,255 ) -
Interest received 19,870 3,205
Net cash from investing activities (5,221,869 ) (2,139,248 )

Cash flows from financing activities
Loans to group companies (364,080 ) (89,000 )
Capital repayments in year (370,503 ) (320,692 )
Amount introduced by shareholders 999,999 2,621
Amount withdrawn by shareholders 3,458 -
Equity dividends paid (564,085 ) (377,939 )
Net cash from financing activities (295,211 ) (785,010 )

Decrease in cash and cash equivalents (437,968 ) (139,484 )
Cash and cash equivalents at beginning
of year

2

1,244,453

1,383,937

Cash and cash equivalents at end of year 2 806,485 1,244,453

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 31 December 2023


1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Profit before taxation 2,905,539 2,015,117
Depreciation charges 2,190,457 2,023,790
Profit on disposal of fixed assets (282,964 ) (228,824 )
Finance costs 116,368 23,812
Finance income (19,870 ) (3,205 )
4,909,530 3,830,690
Decrease/(increase) in stocks 37,014 (96,406 )
Increase in trade and other debtors (992,003 ) (864,554 )
Increase in trade and other creditors 1,497,769 156,597
Cash generated from operations 5,452,310 3,026,327

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2023
31.12.23 1.1.23
£    £   
Cash and cash equivalents 806,485 1,244,453
Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 1,244,453 1,383,937


3. ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

Other
non-cash
At 1.1.23 Cash flow changes At 31.12.23
£    £    £    £   
Net cash
Cash at bank
and in hand 1,244,453 (437,968 ) 806,485
1,244,453 (437,968 ) 806,485
Debt
Finance leases (729,357 ) 132,830 - (731,027 )
Debts falling due
within 1 year - (24,167 ) - (24,167 )
(729,357 ) 108,663 - (755,194 )
Total 515,096 (329,305 ) - 51,291

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 31 December 2023


4. ACQUISITION OF BUSINESS

Net Assets acquired:

Plant and machinery 710,807
Stocks 449,669
Debtors 253,769
Cash 162,841
Creditors (712,127 )
864,959

Goodwill 580,296

1,445,255

Satisfied by:

Cash 1,445,255

City Tool Hire Limited (Registered number: 07775730)

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


1. STATUTORY INFORMATION

City Tool Hire Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Critical accounting judgements and key sources of estimation uncertainty
1. Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is based on managements estimate as to the economic lives of the assets. Assets are depreciated and varying rates depending on the estimate made and this is largely based on the nature of the asset.

Note 2 contains the depreciation policies for each class of asset and note 9 shows the carrying values of each class of asset.


2. Impairment of debtors

It is management's policy that debtors are only deemed impaired if the customer has entered into administration or liquidation. All other debts, regardless of age are treated as recoverable. General provisions are not made against old debts. See note 11 for the carrying value of debtors.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2021, is being amortised evenly over its estimated useful life of five years.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of nil years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
Freehold property - 2% on cost
Improvements to property - in accordance with the property
Plant and machinery - 50% on reducing balance, 20% on cost, at varying rates on cost and at variable rates on reducing balance
Fixtures fittings tools and equipment
-
25% on reducing balance, 20% on cost and 15% on reducing balance
Motor vehicles - 25% on cost and 25% on reducing balance
Computer equipment - 25% on cost and Straight line over 3 years

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

The stock valuation is done so on the average cost method.

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


2. ACCOUNTING POLICIES - continued

Financial instruments
Financial assets:

Basic financial instruments, including trade and other debtors, cash and bank balances are initially recognised at the transaction price.

At the end of each reporting period financial assets are reviewed for evidence of impairment, with any impairment losses recognised in profit or loss.


Financial liabilities:

Basic financial liabilities, including trade and other creditors, and loans are initially recognised at the transaction price and for those not classed as financing transactions, are subsequently measured at amortised cost, being the transaction price less any amounts settled.

Trade creditors are classified as current liabilities where they are due within one year. If they are not, they are classified as non-current liabilities.

Where an arrangement constitutes a financing arrangement, the creditor is initially measured at the present value of future payments discounted at a market rate of interest for a similar instrument, and subsequently measured at amortised cost.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the group.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Hire 20,649,345 15,791,828
20,649,345 15,791,828

An analysis of turnover by geographical market is given below:

2023 2022
£    £   
United Kingdom 20,649,345 15,791,828
20,649,345 15,791,828

The Group's activities consist of supplying the hire of plant and machinery within the UK. Turnover is measured based on the consideration specified in a customer contract and excludes value added tax.

There is one main types of service provided and this is outlined below :

Type of Product or Service Nature of Performance Obligation Revenue Recognition
Hire and rehire Equipment hired to customers is under
the customers control from the point
the item is collected or delivered.
Control is restored to the Company
when the asset is returned.Account
customers pay based on agreed credit
terms.Cash customers pay a deposit
before the hire is undertaken.
Revenue is recognised over the
life of the hire contract. The
contract begins when the
customer takes control of the
asset and ends when the asset
is returned.Delivery charges are
recognised at the point the asset
is delivered to the customer.

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 5,155,772 4,197,648
Social security costs 533,122 461,317
Other pension costs 81,989 69,260
5,770,883 4,728,225

The average number of employees during the year was as follows:
2023 2022

Employees 142 113
Directors 3 3
145 116

2023 2022
£    £   
Directors' remuneration 37,499 30,000

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Hire of plant and machinery 3,732,779 2,522,709
Other operating leases 854,428 633,787
Depreciation - owned assets 2,266,796 1,628,416
Depreciation - assets on hire purchase contracts 401,082 271,596
Profit on disposal of fixed assets (282,964 ) (228,824 )
Goodwill amortisation 123,776 123,778
Computer software amortisation 6,090 -
Auditors' remuneration 14,496 13,950
Auditors' remuneration for non audit work 5,565 5,435

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank loan interest 4,030 -
Interest payable 50,490 -
Hire purchase 61,848 23,812
116,368 23,812

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 583,158 252,183

Deferred tax 218,726 168,622
Tax on profit 801,884 420,805

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 2,905,539 2,015,117
Profit multiplied by the standard rate of corporation tax in the UK of 25 %
(2022 - 19 %)

726,385

382,872

Effects of:
Expenses not deductible for tax purposes 13,411 4,524
Income not taxable for tax purposes (70,741 ) (46,062 )
Capital allowances in excess of depreciation (72,476 ) (111,146 )
Gains 25,336 21,995
Deferred tax 218,726 168,622
Effect of change in tax rate (38,757 ) -
Total tax charge 801,884 420,805

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


8. INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements.


9. DIVIDENDS
2023 2022
£    £   
Ordinary shares of £1 each
Final 615,000 426,000

10. INTANGIBLE FIXED ASSETS

Group
Computer
Goodwill software Totals
£    £    £   
COST
At 1 January 2023 618,892 - 618,892
Additions 288,052 79,818 367,870
At 31 December 2023 906,944 79,818 986,762
AMORTISATION
At 1 January 2023 247,556 - 247,556
Amortisation for year 123,776 6,090 129,866
At 31 December 2023 371,332 6,090 377,422
NET BOOK VALUE
At 31 December 2023 535,612 73,728 609,340
At 31 December 2022 371,336 - 371,336

Company
Computer
Goodwill software Totals
£    £    £   
COST
At 1 January 2023 618,892 - 618,892
Additions - 79,818 79,818
At 31 December 2023 618,892 79,818 698,710
AMORTISATION
At 1 January 2023 247,556 - 247,556
Amortisation for year 123,776 6,090 129,866
At 31 December 2023 371,332 6,090 377,422
NET BOOK VALUE
At 31 December 2023 247,560 73,728 321,288
At 31 December 2022 371,336 - 371,336

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


11. TANGIBLE FIXED ASSETS

Group
Improvements
Freehold to Plant and
property property machinery
£    £    £   
COST
At 1 January 2023 - 240,012 10,015,584
Additions 831,847 7,676 5,000,763
Disposals - - (1,754,680 )
Reclassification/transfer - - 1,446,285
At 31 December 2023 831,847 247,688 14,707,952
DEPRECIATION
At 1 January 2023 - 198,464 4,990,904
Charge for year 192,954 4,396 1,984,773
Eliminated on disposal - - (765,960 )
At 31 December 2023 192,954 202,860 6,209,717
NET BOOK VALUE
At 31 December 2023 638,893 44,828 8,498,235
At 31 December 2022 - 41,548 5,024,680

Fixtures
fittings
tools and Motor Computer
equipment vehicles equipment Totals
£    £    £    £   
COST
At 1 January 2023 289,179 220,921 219,473 10,985,169
Additions 80,355 405,979 49,823 6,376,443
Disposals (75,629 ) (387,972 ) (14,217 ) (2,232,498 )
Reclassification/transfer - 50,410 - 1,496,695
At 31 December 2023 293,905 289,338 255,079 16,625,809
DEPRECIATION
At 1 January 2023 139,858 151,158 138,773 5,619,157
Charge for year 113,260 330,117 42,378 2,667,878
Eliminated on disposal (75,629 ) (323,215 ) (9,715 ) (1,174,519 )
At 31 December 2023 177,489 158,060 171,436 7,112,516
NET BOOK VALUE
At 31 December 2023 116,416 131,278 83,643 9,513,293
At 31 December 2022 149,321 69,763 80,700 5,366,012

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


11. TANGIBLE FIXED ASSETS - continued

Group

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Plant and Motor
machinery vehicles Totals
£    £    £   
COST
At 1 January 2023 988,926 - 988,926
Additions 134,500 231,646 366,146
Disposals - (193,139 ) (193,139 )
Transfer to ownership (229,625 ) - (229,625 )
At 31 December 2023 893,801 38,507 932,308
DEPRECIATION
At 1 January 2023 254,298 - 254,298
Charge for year 246,450 154,632 401,082
Eliminated on disposal - (154,632 ) (154,632 )
Transfer to ownership (144,934 ) - (144,934 )
At 31 December 2023 355,814 - 355,814
NET BOOK VALUE
At 31 December 2023 537,987 38,507 576,494
At 31 December 2022 734,628 - 734,628

Company
Fixtures
Improvements fittings
to Plant and tools and
property machinery equipment
£    £    £   
COST
At 1 January 2023 240,012 10,015,584 289,179
Additions 7,676 4,799,787 4,726
Disposals - (992,103 ) -
Reclassification/transfer - 884,684 -
At 31 December 2023 247,688 14,707,952 293,905
DEPRECIATION
At 1 January 2023 198,464 4,990,904 139,858
Charge for year 4,396 1,865,466 37,631
Eliminated on disposal - (646,653 ) -
At 31 December 2023 202,860 6,209,717 177,489
NET BOOK VALUE
At 31 December 2023 44,828 8,498,235 116,416
At 31 December 2022 41,548 5,024,680 149,321

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


11. TANGIBLE FIXED ASSETS - continued

Company

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 January 2023 220,921 219,473 10,985,169
Additions 38,507 35,606 4,886,302
Disposals (20,500 ) - (1,012,603 )
Reclassification/transfer 50,410 - 935,094
At 31 December 2023 289,338 255,079 15,793,962
DEPRECIATION
At 1 January 2023 151,158 138,773 5,619,157
Charge for year 23,817 32,663 1,963,973
Eliminated on disposal (16,915 ) - (663,568 )
At 31 December 2023 158,060 171,436 6,919,562
NET BOOK VALUE
At 31 December 2023 131,278 83,643 8,874,400
At 31 December 2022 69,763 80,700 5,366,012

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Plant and Motor
machinery vehicles Totals
£    £    £   
COST
At 1 January 2023 988,926 - 988,926
Additions 134,500 38,507 173,007
Transfer to ownership (229,625 ) - (229,625 )
At 31 December 2023 893,801 38,507 932,308
DEPRECIATION
At 1 January 2023 254,298 - 254,298
Charge for year 246,450 - 246,450
Transfer to ownership (144,934 ) - (144,934 )
At 31 December 2023 355,814 - 355,814
NET BOOK VALUE
At 31 December 2023 537,987 38,507 576,494
At 31 December 2022 734,628 - 734,628

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


12. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
Additions 2,088,105
Dividends received (153,011 )
Reclassification/transfer (935,094 )
At 31 December 2023 1,000,000
NET BOOK VALUE
At 31 December 2023 1,000,000


The entire share capital of Construct-Equip Ltd was acquired on 1st September 2023. The trading assets of this company were hived up to City Tool Hire Limited at 31 December 2023.

The cost of the investment was then split so that £935,094 was recatergorised to Fixed Assets to represent the fair value of the actual assets acquired within the company. The share capital of Construct-Equip Limited was subsequently sold in 2024 so the company is no longer part of the Group.

13. STOCKS

Group Company
2023 2022 2023 2022
£    £    £    £   
Stocks 190,070 188,003 190,070 188,003

14. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Trade debtors 4,178,336 3,375,373 4,178,336 3,375,373
Amounts owed by group undertakings 324,037 41,139 324,037 40,939
Other debtors 85,956 10,825 85,956 10,825
Prepayments 349,460 209,214 349,460 209,214
4,937,789 3,636,551 4,937,789 3,636,351

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Bank loans and overdrafts (see note 17) 24,167 - 24,167 -
Hire purchase contracts (see note 18) 446,504 339,368 446,504 339,368
Trade creditors 2,087,773 1,026,317 2,087,773 1,026,318
Amounts owed to group undertakings - - 200 -
Tax 597,168 252,240 597,168 252,240
Social security and other taxes 154,545 128,535 154,545 128,535
VAT 363,551 428,535 363,551 428,535
Other creditors 1,023,308 218,008 1,023,308 218,008
Directors' current accounts 265,332 292,959 265,332 292,959
Accrued expenses 580,703 90,413 580,703 90,413
Deferred government grants - 10,000 - 10,000
5,543,051 2,786,375 5,543,251 2,786,376

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Hire purchase contracts (see note 18) 284,523 389,989 284,523 389,989
Other creditors 503,333 303,949 503,333 303,949
Directors' loan accounts 666,666 - 666,666 -
1,454,522 693,938 1,454,522 693,938

17. LOANS

An analysis of the maturity of loans is given below:

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts falling due within one year or on demand:
Bank loans 24,167 - 24,167 -

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Hire purchase contracts
2023 2022
£    £   
Gross obligations repayable:
Within one year 468,247 363,412
Between one and five years 296,768 420,449
765,015 783,861

Finance charges repayable:
Within one year 21,743 24,044
Between one and five years 12,245 30,460
33,988 54,504

Net obligations repayable:
Within one year 446,504 339,368
Between one and five years 284,523 389,989
731,027 729,357

Company
Hire purchase contracts
2023 2022
£    £   
Gross obligations repayable:
Within one year 468,247 363,412
Between one and five years 296,768 420,449
765,015 783,861

Finance charges repayable:
Within one year 21,743 24,044
Between one and five years 12,245 30,460
33,988 54,504

Net obligations repayable:
Within one year 446,504 339,368
Between one and five years 284,523 389,989
731,027 729,357

Group
Non-cancellable operating leases
2023 2022
£    £   
Within one year 944,266 439,317
Between one and five years 3,835,920 1,255,900
4,780,186 1,695,217

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


18. LEASING AGREEMENTS - continued

Company
Non-cancellable operating leases
2023 2022
£    £   
Within one year 944,266 439,317
Between one and five years 3,835,920 1,255,900
4,780,186 1,695,217

19. PROVISIONS FOR LIABILITIES

Group Company
2023 2022 2023 2022
£    £    £    £   
Deferred tax
Accelerated capital allowances 725,621 - 700,073 -
Other timing differences (1,672 ) - (1,672 ) -
Deferred tax - 479,242 - 479,242
723,949 479,242 698,401 479,242

Group
Deferred
tax
£   
Balance at 1 January 2023 479,242
Charge to Statement of Comprehensive Income during year 244,707
Balance at 31 December 2023 723,949

Company
Deferred
tax
£   
Balance at 1 January 2023 479,242
Provided during year 219,159
Balance at 31 December 2023 698,401

20. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
2,000 Ordinary £1 2,000 2,000
1,000,000 Preference £1 1,000,000 1,000,000
1,002,000 1,002,000

City Tool Hire Limited (Registered number: 07775730)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023


21. RESERVES

Group
Retained
earnings
£   

At 1 January 2023 5,844,800
Profit for the year 2,103,655
Dividends (615,000 )
At 31 December 2023 7,333,455

Company
Retained
earnings
£   

At 1 January 2023 5,844,599
Profit for the year 2,202,259
Dividends (615,000 )
At 31 December 2023 7,431,858


22. RELATED PARTY DISCLOSURES

The group paid management fees of £151,631 (2022: £143,266) to one of its shareholders, Hire Investments Limited.

At the balance sheet date, the company was owed £326,037 (2022: £40,939) by one of its shareholders, Hire Investments Limited.

23. ULTIMATE CONTROLLING PARTY

The group is under the control of the directors of the parent company by virtue of their shareholdings.