Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
for |
City Tool Hire Limited |
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: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
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: |
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. |
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: |
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. |
for and on behalf of |
Statutory Auditors |
8-10 South Street |
Epsom |
Surrey |
KT18 7PF |
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 |
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 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Stocks | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 19 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS |
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 |
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 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2023 |
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 |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
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 |
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. |
Tangible fixed assets |
Freehold property | - |
Improvements to property | - |
Plant and machinery | - |
Fixtures fittings tools and equipment | - |
Motor vehicles | - |
Computer equipment | - |
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 |
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 |
Additions |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
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 |
Additions |
Disposals | ( |
) |
Reclassification/transfer |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
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 |
Additions |
Disposals | ( |
) | ( |
) |
Reclassification/transfer |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
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 |
Additions |
Transfer to ownership | (229,625 | ) | - | (229,625 | ) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Transfer to ownership | (144,934 | ) | - | (144,934 | ) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
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 |
Dividends received | (153,011 | ) |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
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 |
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 4,178,336 | 3,375,373 |
Amounts owed by group undertakings | 324,037 | 41,139 |
Other debtors | 85,956 | 10,825 |
Prepayments | 349,460 | 209,214 |
4,937,789 | 3,636,551 |
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 | - |
Hire purchase contracts (see note 18) | 446,504 | 339,368 |
Trade creditors | 2,087,773 | 1,026,317 |
Amounts owed to group undertakings | - | - |
Tax | 597,168 | 252,240 |
Social security and other taxes | 154,545 | 128,535 |
VAT | 363,551 | 428,535 | 363,551 | 428,535 |
Other creditors | 1,023,308 | 218,008 |
Directors' current accounts | 265,332 | 292,959 | 265,332 | 292,959 |
Accrued expenses | 580,703 | 90,413 |
Deferred government grants | - | 10,000 |
5,543,051 | 2,786,375 |
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 |
Other creditors | 503,333 | 303,949 |
Directors' loan accounts | 666,666 | - | 666,666 | - |
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 | - |
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 |
Between one and five years |
Finance charges repayable: |
Within one year |
Between one and five years |
Net obligations repayable: |
Within one year |
Between one and five years |
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 |
Between one and five years |
19. | PROVISIONS FOR LIABILITIES |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Deferred tax |
Accelerated capital allowances | 725,621 | - |
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 |
Provided during year |
Balance at 31 December 2023 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 2,000 | 2,000 |
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 |
Profit for the year |
Dividends | ( |
) |
At 31 December 2023 |
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. |