The company’s business activities, together with the factors affecting and likely to affect its performance and financial position, its cash flows, liquidity and borrowings are set out in the Directors’ Report and Chairman’s Statement. At 31 March 2024 the company had cash deposits of £1,263,561 with total debt of £1,403,539 and an undrawn overdraft facility of £100,000.
The company’s principal debt is a Medium Term Loan, repayable in monthly instalments to 2038, with 5-yearly reviews, the next in 2028. The principal outstanding at year-end was £1,403,539 (2023 £1,675,832). The company’s increased profitability has enabled several lump sum prepayments to be made, and the Directors intend to continue this, subject to ongoing requirements for capital expenditure and working capital. This would result in the Medium Term Loan being repaid several years early.
The Directors prepare a detailed budget annually, including financial projections with associated cash flows. The Directors have had regard to reasonably possible trends in trading performance during the current financial year 2024-25, in particular, possible future levels of interest rates and the economic environment. Market demand has continued the previous year’s encouraging performance. However, there remains considerable uncertainty regarding the level of future demand.
The company has considered various downside scenarios in preparing budgets, and their impact on cash reserves. Mitigating actions would be available to the company should any adverse eventuality arise, to moderate cash outflows. The directors are satisfied, based on the business plan and regular reviews with the bank, that the provision of further financial resources in the form of additional borrowing would be available to the company should this be required.
Accordingly, the Directors have formed the judgement, taking into account the financial resources available, the range of reasonably possible future trading scenarios and potential mitigating actions, that the company has adequate resources to continue to operate for a period of at least 12 months from the date of approval of the financial statements and have therefore adopted the going concern basis in the preparation of the financial statements.