Registered number:
FOR THE YEAR ENDED 31 MARCH 2024
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
James Walker UK Limited's ("the Company") strategic focus continues to be core James Walker sealing product sales into new and existing markets.
The Company faced a number of issues during the financial year, including inflation, manufacturing labour shortages and supply chain material shortages. Despite these challenges the Company's sales increased primarily in relation to the Oil & Gas, Power Generation and Defence markets. The Company continues to focus on working capital and credit control. The implementation of a hybrid working policy has proved to be effective and offers employees an improved work life balance with no negative effect on customer relationships. For the financial year ended 31 March 2024 the Company recorded an operating profit of £1,542,000 (2023: £1,196,000).
The following key performance indicators are measured and reviewed on a regular basis and enable the business to set and communicate its performance targets and monitor its performance against these targets:
Revenue growth - annual growth rate of revenue decreased by: 1.7% (2023: Growth - 23.4%). Operating margin - operating profit before special items as a percentage of revenue: 6.2% (2023: 4.8%). Average working capital levels - trade and other receivables less trade and other payables as a percentage of revenue: 3.9% (2023:2.6%). Shareholders' funds: £2,569,000 (2023: £2,449,000). Principal risks and uncertainties Product innovation The Company supplies products which include materials that are subject to regulations and in some cases customer certifications. Specifically, there is a risk around poly and perfluoroalkyl substances (PFAS) and if these materials are prohibited or withdrawn this could stop the supply of certain products into the market place. We are identifying materials that could be at risk as well as researching and developing alternative solutions.
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
Supply chain disruption
Disruption of supply of raw and semi-finished materials has improved during the year, partly due to a number of measures which the Company has implemented. We continue to communicate closely with our suppliers, review critical raw material needs and monitor logistics partners. Climate change A warming, changing climate presents both medium and long-term risks and opportunities for the Company. The transition towards net zero, including policies to encourage decarbonisation, will, in future, require us to provide additional support and products to customers as they shift away from fossil fuel based operation. Customers’ environmental expectations of their supply chains are expected to become more demanding. The Company is responding to the UN Sustainable Development Goals and is developing projects to reduce our energy intensity through better energy management, more efficient equipment and investment in sustainable energy sources. Keystone programme The company plans to go live on its new ERP system, with minimal disruption. The project leadership aims to achieve this through rigorous project management controls and system testing. Should the risk materialise, sales could be disrupted.
This report was approved by the Board of Directors on 11 July 2024 and signed on its behalf.
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The Directors present their report and the financial statements for the year ended 31 March 2024.
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,620,000 (2023: £1,228,000).
The Directors have approved the payment of an interim dividend of £1,750,000 (2023: £1,500,000) which was paid on 20 June 2024.
The Directors who served during the year were:
The Directors are confident that the that the Company can continue as a going concern. The Board feels that the Company is in a sound financial position to maximise any opportunities throughout the year as it actively seeks to expand through organic growth.
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The auditors, Haysmacintyre LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the Board of Directors on
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We have audited the financial statements of James Walker UK Limited (the 'Company') for the year ended 31 March 2024, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud. Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory requirements for manufacturing businesses such as health and safety and trade regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included: • Inspecting correspondence with regulators and tax authorities; • Discussion with management including consideration of known or suspected instances of non-compliance with laws and regulations and fraud; • Evaluating managements’ controls designed to prevent and detect irregularities; • Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and • Challenging assumptions and judgements made by management in their critical accounting estimates.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditors' Report.
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This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditors
10 Queen Street Place
EC4R 1AG
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
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STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
The financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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1.Accounting policies
James Walker UK Limited is a private company, limited by shares, registered in England and Wales.
The registered office is: Lion House Oriental Road Woking Surrey GU22 8AP The principal place of business is: Gawsworth House Westmere Drive Crewe Cheshire CW1 6XB
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 2).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of James Walker Group Limited as at 31 March 2024 and these financial statements may be obtained from Companies House.
After reviewing the Company’s forecasts and projections, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing its financial statements.
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Depreciation needs to be assessed for each entity to see whether a material disclosure is required.
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Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Functional and presentation currency
Transactions and balances
Statement of Financial Position date and carried forward to future periods.
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judgements and assumptions that it believes are reasonable based on the information available. These judgements, estimates and assumptions affect the amounts of assets and liabilities at the date of the financial statements and the amounts of revenues and expenses recognised during the reporting periods presented. On an ongoing basis, the Company evaluates its estimates using historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Actual results may differ significantly from the estimates, the effect of which is recognised in the period in which the facts that give rise to the revision become known. The following paragraphs detail the estimates and judgements the Company believes to have the most significant impact on the annual results under FRS 102. Property, plant and equipment (PPE) The estimated useful economic lives of PPE are based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted prospectively. Due to the significance of PPE investment to the Group, variations between actual and estimated useful economic lives could impact operating results both positively and negatively, although historically few changes to estimated useful economic lives have been required. The Company is required to evaluate the carrying values of PPE for impairment whenever circumstances indicate, in management's judgement, that the carrying value of such assets may not be recoverable. An impairment review requires management to make subjective judgements concerning the cash flows, growth rates and discount rates of the cash generating units under review.
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The whole of the turnover is attributable to sales of sealing products and services for a number of the UK manufacturers in the James Walker Group.
Analysis of turnover by country of destination:
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As of April 2023 the standard corporation tax rate in the UK rose to 25%. The Directors have reviewed the Company's anticipated future profitability, and in view of this a deferred tax asset of £10,000 (2023: £10,000) has been recognised in the Statement of Financial Position.
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Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses.
The Company participates in a group defined benefit plan, the James Walker Pension Scheme ("JWPS"). For the purposes of FRS102 s28 the Company cannot identify its share of the underlying assets and liabilities of the defined benefit scheme in which it participates and the Company's pension contributions are assessed in accordance with the advice of a qualified independent actuary whose calculations are based upon total scheme membership. There is no contractual agreement or stated policy for charging the cost of the plan to the individual companies. In overall terms at 31 March 2024 there was nil deficit in respect of the UK scheme. The JWPS was closed to future accrual with effect from 30 April 2016 and active members of the scheme at that date were auto-enrolled into the James Walker Group Personal Pension Plan, a defined contribution scheme. Further information is included in the financial statements of the parent undertaking.
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At 31 March 2024 the Company was party to a multilateral guarantee in respect of the indebtedness of other group companies to the value of £2,000,000 (2023: £2,000,000).
The ultimate parent undertaking is James Walker Group Limited. Its registered office is Lion House, Oriental Road, Woking, Surrey, GU22 8AP.
Group financial statements for James Walker Group Limited are available to the public from Companies House, Crown Way, Cardiff, for which there may be a fee, if applicable.
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