Registered number:
For the year ended
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F.M. BIRCH LIMITED
Company Information
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F.M. BIRCH LIMITED
Contents
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F.M. BIRCH LIMITED
Strategic report
For the year ended 31 January 2024
The directors present their strategic report for the year ended 31 January 2024.
F M Birch Limited specialises in the wholesale distribution of floorcoverings such as carpets, carpet tiles, matting, decorative vinyls, safety flooring, laminates, underlays and associated accessories, to trade customers.
Our principal customer base is in Yorkshire and the bordering counties and is serviced from our three trade counter locations in Sheffield (HQ), Hull & Leeds. We supply to several national projects and framework agreements through a well-established logistics network. During the year the company delivered a solid financial performance, despite the unsettled economic climate caused by the ongoing war in Ukraine, which then led to the energy crisis and spiralling raw material costs. Given the circumstances, the yearend financial position was satisfactory, with the company achieving its highest turnover figure to date. That said, growth in turnover was bolstered by unprecedented levels of supply side inflation, and margin was diminished by pressure on margins as competitors sought to maintain market share in a depressed market, underpinned by an economy that fell into technical recession towards the calendar year end. International shipping costs, though stabilised, remained high for much of the period which rendered some product lines uncompetitive. Q4 saw some normalisation of these rates which allowed us to bring some imported products back on stream. The potential ill effects of the cost of living crisis on household spending, were mitigated to a degree by the energy bill support scheme but we still saw a fall in demand for our retail product lines. This was offset by increased demand from the construction industry for flooring materials for new build and refurbishment projects throughout the year. The company continues to explore opportunities for increased bulk purchasing, as a way of mitigating inflationary pressures and maintaining a competitive edge. The development of own brand and exclusive product lines will continue to be central to our strategy, to shelter us from increasing price pressure on generic and universal brands.
Although predictions for the UK recession seem to have receded, it looks likely that growth for our business will need to come from new product lines and improving our service levels and overall competitiveness.
Overwhelming geopolitical volatility, including ongoing conflicts in the Middle East and Europe, and looming elections worldwide suggests the challenges of this year will offset the likely benefits in any growth in GDP and consumer demand. Whilst some of the volatility of raw material prices has diminished, and shipping rates have reverted to lower norms, inflationary pressure have continued to be present which will continue to supress demand in some sectors, such as retail, for the remainder of this year. Competitive flux within our marketplace continues, driven by consolidation and significant new entrants. There is particular focus on distribution into retail which, because of the reduction in household spending, is likely to mean continuing price pressure at the lower end of the value scale. Growth in activity in general construction and house building has been inconsistent and was only at levels which backfilled diminished demand from households.
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F.M. BIRCH LIMITED
Strategic report (continued)
For the year ended 31 January 2024
Turnover for the year was up by just 1%, and gross margin and operating profit were adversely affected by competitive pressure and an increased cost base.
The current ratio is 3.7 which is positive, and the bank balance has increase by £217K. The Stock has increased by £359K driven by bulk buying on exclusive lines, but we have continued our practice of making full provision for the disposal of slow moving and obsolete product lines. Current working capital is £4.3m.
We continue to focus on the ESG profile of the business.
It is our intention for the coming year to derive all our gas and electricity requirements from renewable resources, and we have an ongoing commitment to reduce the reliance of our fleet on fossil fuels. To this end we’ve completed the installation of four EV chargers as well as developing a project for the installation of solar panels at our freehold sites. We continue to maintain accreditation for both ISO 9001:2015 and ISO 14001:2015 and have appointed a project team to continue to challenge and improve on current performance on resource consumption and environmental best practice.
This report was approved by the board on 27 September 2024 and signed on its behalf.
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F.M. BIRCH LIMITED
Directors' report
For the year ended 31 January 2024
The directors present their report and the financial statements for the year ended 31 January 2024.
The directors are responsible for preparing the Strategic report, the Directors' report 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 of the profit or loss of the Company for that period.
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;
∙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 £640,680 (2023 -£932,219).
No final dividend is proposed.
The directors who served during the year were:
Certain matters required by regulation to be dealt with in the annual report have been dealt with in the strategic report rather than the Directors' report. These include future developments.
There have been no significant events affecting the Company since the year end.
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F.M. BIRCH LIMITED
Directors' report (continued)
For the year ended 31 January 2024
The auditors, J S Bethell & Co, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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F.M. BIRCH LIMITED
Independent auditors' report to the members of F.M. Birch Limited
We have audited the financial statements of F.M. Birch Limited (the 'Company') for the year ended 31 January 2024, which comprise the Profit and loss account, the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, 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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F.M. BIRCH LIMITED
Independent auditors' report to the members of F.M. Birch Limited (continued)
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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F.M. BIRCH LIMITED
Independent auditors' report to the members of F.M. Birch Limited (continued)
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:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of such regulations, including fraud. We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including but not limited to, the Companies Act 2006 and UK tax legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated whether there was evidence of management override of internal controls and bias by the directors in determining accounting estimates that represented a risk of material misstatement due to fraud. Audit procedures performed by the engagement team included, discussions with management including consideration of known or suspected instances of non-compliance with laws and regulations, challenging assumptions and judgments made by management in their significant accounting estimates, identifying and testing journal entries and review of the nominal ledger and reviewing the financial statement disclosures and agreeing to underlying supporting documentation. We have considered the risk of fraud in revenue and have carried out audit procedures to ensure that revenue is being recognised in accordance with appropriate accounting standards and therefore not materially misstated.
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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F.M. BIRCH LIMITED
Independent auditors' report to the members of F.M. Birch Limited (continued)
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
Chartered Accountants
Registered Auditor
70 Clarkehouse Road
S10 2LJ
Date:
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F.M. BIRCH LIMITED
Profit and loss account
For the year ended 31 January 2024
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F.M. BIRCH LIMITED
Statement of comprehensive income
For the year ended 31 January 2024
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F.M. BIRCH LIMITED
Registered number: 00196854
Balance sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 15 to 28 form part of these financial statements.
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