The directors present the strategic report for the year ended 31 January 2024.
The company's principal activities during the year continued to be the supply of road planing contracting services to the Highways Infrastructure Industry and Local Authorities. There was a 13.5% increase in turnover during the year with the gross profit margin improving to 26.24%. Administrative expenses have been controlled to a similar level as 2023 resulting in an improvement in Operating Profit to £1,176,374 and Net Profit before tax of £970,763 for the year.
The war in Ukraine continued to impact all areas of our business with increased fuel prices and driving inflation to high levels throughout the Highways Infrastructure Industry. As a result highway maintenance budgets were stretched and there was a great deal of uncertainty throughout our industry. The Directors are pleased that in this difficult environment we were able to increase our turnover significantly and improve Gross Profit margins from the previous year.
Inflation started to fall in the latter part of the year and this brought with it some certainty on costs and an increased confidence throughout the highways infrastructure sector to invest in maintaining the highways network.
We continued to invest in capital equipment to support our operations with the latest technology and with a focus on sustainability. In line with our growth strategy we are now operating 30 Wirtgen cold milling machines and this investment allowed for our sales growth of 13.5% while also improving our gross profit margins.
During the year we have strengthened our board with Simon Bithell joining as Transport Director (he has subsequently taken responsibility for all Operations) and Ian Mitchell as Non-Executive Director. Both have a wealth of experience operating at board level in large and multinational business and will drive our ambitious growth plans for the coming years.
Our ESG strategy has been determined over the past months and is focussed on addressing the environmental, social and governance challenges facing our stakeholders, and the wider community. We are focussed on long term business sustainability and maintaining ethical and compliant business practices. We created a baseline in 2021 of our emissions and formulated an ambitious strategy on how we support the global target from COP26 of no more than a 1.5 degree rise in climate temperatures. 2023/4 has put a few obstacles in our way with the war in Ukraine and the impact this had on global energy prices but we have continued to drive towards our targets with a relative reduction of 14% in CO2 emissions compared with our baseline of 2021. All of our roadplaners are now being fuelled with ethically and sustainably certificated HVO which is having a big impact in reducing our well to wheel CO2 emissions.
We made a commitment to donate 1% of our Net Profits to local charities chosen by our employees and these included St Richards Hospice, The Dogs Trust, Caring Hands in The Vale, Campden Home Nursing, John Martin, Rowcroft Hospice, HITS and Animals in Distress.
The board has a proactive approach to risk management with the aim of protecting its employees and customers, and safeguarding the interests of the group and its stakeholders. The group has specific policies to ensure that risks are properly evaluated and managed at appropriate levels in the business. The key risks affecting the group are considered to be competitive pressures and any changes in the Government's and Local Authorities' short and long term highways infrastructure maintenance budgets.
The group's principal financial instruments comprise long term bank loans, finance lease contracts and cash and short-term deposits. The group also has trade debtors and trade creditors which arise directly from its operations. The company does not enter into derivative contracts.
The main risks arising from the financial instruments are interest rate risk, credit risk and liquidity risk.
Interest rate risk
The group's exposure to market risk for changes in the interest rates relates primarily to its long term bank loans. The group's exposure to interest rate fluctuations on its borrowing is managed by the use of commercial rates linked to LIBOR.
Credit risk
The group only trades with recognised creditworthy third parties. It is group policy that all customers who wish to trade on credit terms are subject to credit vetting procedures. Credit accounts are monitored on an ongoing basis with the result that the group's exposure to bad debts is not significant.
Liquidity risk
The group mitigates liquidity risk by managing cash generation by its operations and applying cash collection targets
The directors have monitored the performance of the group against key performance indicators including those below:
2024 2023
Turnover (£s) 18,480,321 16,276,845
Gross profit percentage - % 26.24 24.70
Profit before taxation (£s) 852,276 717,014
Future Developments
In September 2024 the property was demerged from the trading entity so it now sits in Ickarus Limited. The company entered into a 10 year lease to continue operating from its existing premises in Evesham and Newton Abbot.
In July 2024 a new labour government was elected. They have pledged to increase funding on highway maintenance and as part of their manifesto cancelled the A27 Arundel Bypass and Stonehenge A303 tunnel to divert those funds to maintaining the existing network. We are confident that with these measures and their pledge to tackle potholes nationally, local authorities will have enhanced budgets to spend on highways infrastructure maintenance.
In May 2024 we launched our Jet School with two new trainees. We recognise our industry has an ageing workforce and the Jet School will bring young workers into our industry with the specialist training needed to continue our growth plans. We will run 2 cohorts of trainees each year with a guaranteed job at the end of the training program.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 January 2024.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £348,068. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's principal financial instruments comprise long term bank loans, finance lease contracts and cash and short term deposits. The group also has trade debtors and trade creditors which arise directly from its operations. The group does not enter into derivative contracts.
The main risks arising from the financial instruments are interest rate risk, credit risk and liquidity risk. These risks are described more fully in the Strategic Report.
In accordance with the company's articles, a resolution proposing that DTL Auditors Limited be reappointed as auditor of the company will be put at a General Meeting.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
We have audited the financial statements of Jet Plant Hire Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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).
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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 group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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.
As explained more fully in the directors' responsibilities statement, 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 is 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 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 parent company or to cease operations, or have no realistic alternative but to do so.
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 auditor's 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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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 acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed 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, FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
As in all our audits, we also addressed the risk of management override of internal controls by testing journal entries and evaluating whether there was evidence of management bias which represented a risk of material misstatement due to fraud.
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 an auditor's 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.
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £317,372 (2023 - £1,870,892 profit).
Jet Plant Hire Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 7c Enterprise Way, Vale Park, Evesham, Worcestershire, WR11 1GS.
The group consists of Jet Plant Hire Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Jet Plant Hire Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 January 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Jet Plant Hire Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group income statement and statement of cash flows include the results and cash flows of Jet Plant Hire Limited for the year ended 31 January 2024 (2023 - year ended 31 January 2023). The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors are confident that the company has performed well during this period and will continue to do so for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.
Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in profit or loss.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Shares acquired by a paper for paper transaction are valued at fair value and recognised by a transfer to revaluation reserve.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Provisions
Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. The remaining useful economic life of the main production plant assets is considered a source of significant estimation uncertainty.
The fair value of the investment property is reviewed annually by the directors. An independent valuation was undertaken and the fair value of £1,500,000 was reflected in the year ended 31 January 2022. The directors believe this valuation remains in place and is accurate at the year ended 31 January 2024.
During the year ended 31 January 2023, land and buildings included within property, plant and equipment were also subject to independent valuations and the fair values totalling £1,915,000 were reflected. The directors believe this valuation remains in place and is accurate at the year ended 31 January 2024.
The directors will review the valuations annually and an independent valuation will be undertaken every five years.
An analysis of the group's revenue is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
At 31 January 2022, the UK corporation tax on profits for the current period relates to a tax refund due.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Assets held under finance leases or hire purchase contracts are pledged as security against the liabilities to which they relate.
Tangible fixed assets are pledged as security for the bank facilities under a fixed and floating charge.
Independent valuations were undertaken during the year by BNP Paribas on 15 August 2022 and Vickery Holman Property Consultants on 18 July 2023 which formed the basis of the fair market valuations of two properties totalling £1,915,000 for the year ended 31 January 2023. The directors consider that at 31 January 2024, the valuations still reflected the fair market value based on commercial properties in the local areas of a similar size, structure and state of repair.
If land and buildings had not been revalued it would, it would have been included at historical costs of £1,242,183 (2023 - £1,242,183) less depreciation of £244,061 (2023 - £231,857).
Details of the company's subsidiaries at 31 January 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The investments are stated at fair value.
Investment property comprises a building erected in 2016 on land already owned by the company. An independent valuation was undertaken by BNP Paribas on 15 August 2022 which formed the basis of the fair market valuation for the year ended 31 January 2022. The directors consider that at 31 January 2024, the valuation continues to reflect the fair market value based on commercial properties in the local area of a similar size, structure and state of repair.
The historical cost of investment property is £1,131,240 (2023: £1,131,240).
Investment properties are pledged as security for the bank facilities under a fixed and floating charge.
Stock is pledged as security for the bank facilities under a fixed and floating charge.
Debtors are pledged as security for the bank facilities under a fixed and floating charge.
The bank loans are secured by a fixed and floating charge over all the assets of the company.
Interest rates range from base rate plus 2.25% to base rate plus 2.75%. Repayments are by monthly instalments and the final repayment on one of the loans is anticpated to be October 2042. However, it is company practice to repay loans over a shorter period than the contractual requirement, where possible.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets.
The hire purchase and finance lease obligations are secured over the assets to which they relate. Interest rates underlying all obligations under finance leases are fixed at respective contract rates ranging from 2.33% to 7.77%. Amounts are repayable by monthly instalments and are all due by 31 December 2027.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
On 21 October 2022 95 'A' ordinary shares of £1 each were bought back by the company. Total consideration of £1,700,000 was paid to the shareholders. This transaction accounted for 51% of total share capital.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The operating leases represent rental income leases to third parties. All leases include a provision for five-yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Dividends totalling £348,068 (2023 - £170,400) were paid in the year in respect of shares held by the company's directors.