WARRANT GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
Company Registration No. 01941659 (England and Wales)
WARRANT GROUP LIMITED
COMPANY INFORMATION
Directors
Mr I C Jones
Mrs L Morrison
Mr J J Healy
(Appointed 1 February 2023)
Mr J W Gibbs
(Appointed 1 April 2024)
Company number
01941659
Registered office
Warrant House
157 Regent Road
Liverpool
L5 9TF
Auditor
DSG Audit
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
Business address
Warrant House
157 Regent Road
Liverpool
L5 9TF
WARRANT GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
WARRANT GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -
The directors present the strategic report and financial statements for the year ended 31 January 2024.
Principal activity
The principal activities of the company are supply chain management and logistics. The company operates from its head office in Liverpool.
Promoting the success of the company
The directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members, and in doing so have regard to a range of matters when making decisions for the long term.
(a) the likely consequences of any decisions in the long term
The board meets on an annual basis and any investment decisions must be signed off by the board of directors and the long-term future of the business is considered within this process. Directors must attend and any changes agreed unanimously.
The plans are then monitored on a quarterly basis.
(b) the interests of the company's employees
The board takes into consideration its employees when building its short- and long-term plans.
The board engages with its employees via regular management meetings and emails so that they are kept up to date with the business plans. HR meetings with individual employees are conducted to ensure employee well-being is known.
The board actively reviews the pay structure and basis for which any salary review or bonus award are made, this is communicated to employees on a timely basis.
(c) the need to foster the company's business relationships with suppliers and customers
The company relies on its relationships with suppliers and customers.
The board regularly monitors these relationships via daily workflow, its monthly and quarterly review meetings.
(d) the impact of the company's operations on the community and the environment
The company has been looking to reduce its carbon footprint by actively encouraging recycling and moving to a paperless office environment.
The company also actively supports and engages with local communities including supporting local foodbanks and local charities.
(e) the desirability of the company maintaining a reputation for high standards of business conduct
The board employs suitably qualified and trained employees within each department as well as investing in the necessary IT systems.
The board ensures there is an annual training budget in place for each employee and that all training needs are met via regular monitoring and internal discussions with management.
(f) the need to act fairly between members of the company
The board understands the need to act fairly between members of the company. The company has policies in place including whistleblowing and any incidents reported are fully investigated.
There is also a formal grievance policy in operation, with any allegations again formally investigated.
WARRANT GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
Fair review of the business
The directors are satisfied with the financial performance of the company and the results for the year ended 31 January 2024.
The results indicate an operating profit of £2.7m for the year, down from £3.4m in 2023, with a turnover of £43.9m compared to £78.9m in 2023. Despite the company's strong performance this year, the decrease in turnover is attributed to the decline in container freight prices and volumes. However, the company has effectively managed its underlying cost base and increased gross margin from 9.8% to 15.6% during the period.
The company has net assets of £3.6m (2023: £11.6m). During the financial period the company became employee owned, as the company's ultimate parent company, Warrant Group 2019 Limited, sold 90% of its shares to an Employee Ownership Trust (EOT). As part of the transaction the company declared dividends of £9.9m, which has primarily led to the reduction in net assets in the period.
Principal risks and uncertainties
Management of the business and the execution of the company's strategy are subject to various risks.
The key business risks and uncertainties affecting the company are considered to relate to:
Competition within the market place
The current marketplace remains competitive. The company manages this risk by maintaining good relationships with its customers and suppliers, offering a high-level customer service experience coupled with a competitive procurement model always ensuring strong cost control.
Economic downturn
Consumer spend is down as everyday cost for fuel, food and borrowings continue to increase. However, through the diversity of the business profile, the company remains positive in relation to future business performance.
Foreign currency exchange risk
There are several foreign currency transactions. The company operates Euro and Dollar bank accounts and where possible matches income with costs generated in the same currency. The directors have assessed foreign exchange risk and do not consider the exposure to be significant considering the large volume of foreign currency transactions that they deal with.
Mandatory Brexit Customs Requirements
The company embraced the opportunity to ensure a smooth transition for existing Rest of the World clients to continue with their business in EU as well as to increase its EU-UK HMRC client base with new business wins. As such, the company has increased its headcount in the customs department to deal with a significant increase in customs work.
Credit risk
The company is exposed to credit risk on some trade and other receivables, but most of the debt is insured through Atradius.
Future developments
The general business climate is challenging due to the economic downturn moving forward. The directors are committed to developing the business through continued investment in people and IT systems which has held them in good stead over previous years of trading.
The directors are fully aware of such worldwide trading difficulties but believe that the company is in a strong position and that the outlook for the company is positive.
WARRANT GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
Key performance indicators
The company strategy is one of growth across all business sectors. The directors monitor progress against this strategy by reference to several financial key performance indicators. Performance for the current year, together with comparative data for the previous year, is set out below:
(a) Turnover
Turnover for the year is £43.9m (2023: £78.9m). The decrease in turnover is largely due to the fall in Container freight prices on Sea-freight Export and Import routes when compared to prior year.
(b) Gross profit %
This is gross profit expressed as a percentage of turnover. Gross profit % was 15.6% (2023: 9.8%). The increase in Container freight prices on Sea-freight Export and Import routes when compared to prior year has had a direct impact on the margins.
Mr J J Healy
Director
31 October 2024
WARRANT GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
The directors present their annual report and financial statements for the year ended 31 January 2024.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £9,956,064. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr I C Jones
Mrs L Morrison
Mr A Simpson
(Appointed 1 February 2023 and resigned 23 November 2023)
Mr J J Healy
(Appointed 1 February 2023)
Mr J W Gibbs
(Appointed 1 April 2024)
Auditor
DSG resigned as auditor to the company on 11 September 2024. DSG Audit were appointed as auditor to the company on 11 September 2024, and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
The parent undertaking of the company, Warrant Group 2019 Limited, has prepared reporting as required under the streamlined energy and carbon reporting guidelines. As the company is included within the data presented within the Group Report of Warrant Group 2019 Limited, the exemption has been taken not to present such information within these financial statements under the available subsidiary exemption.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the company's principal activities, financial risk management policies, future developments and the need to foster the company's business relationships with suppliers, customers and others.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr J J Healy
Director
31 October 2024
WARRANT GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2024
- 5 -
The directors are responsible for preparing the annual 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 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 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 and then apply them consistently;
make judgements 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 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.
WARRANT GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WARRANT GROUP LIMITED
- 6 -
Opinion
We have audited the financial statements of Warrant Group Limited (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 January 2024 and of its 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.
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 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 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 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.
WARRANT GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WARRANT GROUP LIMITED
- 7 -
Matters on which we are required to report by exception
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.
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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 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 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 company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 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.
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.
Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the company.
The following laws and regulations were identified as being of significance to the company:
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation.
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the company and therefore may have a material effect on the financial statements include compliance with quality management system regulations, supply chain regulations, waste regulations, air cargo transportation regulations, freight forwarding regulations, food and drink export regulations, road haulage regulations, shipping industry regulations and General Data Protection requirements.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the company complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.
WARRANT GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WARRANT GROUP LIMITED
- 8 -
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the company’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
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.
Laura Leslie BSc ACA
Senior Statutory Auditor
For and on behalf of DSG Audit
31 October 2024
Chartered Accountants
Statutory Auditor
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
WARRANT GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
43,916,776
78,872,013
Cost of sales
(37,059,142)
(71,176,285)
Gross profit
6,857,634
7,695,728
Administrative expenses
(4,197,233)
(4,342,347)
Operating profit
5
2,660,401
3,353,381
Interest receivable and similar income
9
331
5,786
Profit before taxation
2,660,732
3,359,167
Tax on profit
8
(700,119)
(699,996)
Profit for the financial year
1,960,613
2,659,171
WARRANT GROUP LIMITED
BALANCE SHEET
AS AT 31 JANUARY 2024
31 January 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
89,325
95,636
Current assets
Debtors
13
13,998,399
23,252,162
Cash at bank and in hand
573,324
1,493,785
14,571,723
24,745,947
Creditors: amounts falling due within one year
14
(11,085,676)
(13,270,760)
Net current assets
3,486,047
11,475,187
Net assets
3,575,372
11,570,823
Capital and reserves
Called up share capital
17
10,000
10,000
Profit and loss reserves
3,565,372
11,560,823
Total equity
3,575,372
11,570,823
The financial statements were approved by the board of directors and authorised for issue on 31 October 2024 and are signed on its behalf by:
Mr J J Healy
Director
Company registration number 01941659 (England and Wales)
WARRANT GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 February 2022
3,000,000
13,754,356
16,754,356
Year ended 31 January 2023:
Profit and total comprehensive income
-
2,659,171
2,659,171
Dividends
10
-
(7,842,704)
(7,842,704)
Reduction of shares
17
(2,990,000)
2,990,000
Balance at 31 January 2023
10,000
11,560,823
11,570,823
Year ended 31 January 2024:
Profit and total comprehensive income
-
1,960,613
1,960,613
Dividends
10
-
(9,956,064)
(9,956,064)
Balance at 31 January 2024
10,000
3,565,372
3,575,372
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 12 -
1
Accounting policies
Company information
Warrant Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Warrant House, 157 Regent Road, Liverpool, L5 9TF.
The principal activities of the company are disclosed in the strategic report.
1.1
Accounting convention
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in the profit and loss account and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Warrant Group 2019 Limited. These consolidated financial statements are available from its registered office at Warrant House, 157 Regent Road, Liverpool, L5 9TF.
1.2
Going concern
As part of assessing the impact of going concern on the business, management have prepared financial forecasts for the company for a period covering 12 months from the date of signing these financial statements. These forecasts build in key assumptions surrounding changes in the UK economy, impacts on worldwide trading conditions, along with any changes in container freight prices; which ultimately drive revenue and hence profitability. The forecasts indicate that the company will continue to trade profitably, and generate cash, over the period considered by them in their assessment of the appropriateness of adopting the going concern basis in the preparation of the financial statements. These forecasts also demonstrate that the companytrue has sufficient cash reserves and head room within the existing invoice discounting facility to support the working capital needs of the business moving forward.
Management is fully aware of the worldwide trading difficulties and the uncertainties within the UK economy but continues to monitor and manage these risks. These are factored into any future forecasts and business strategy decisions taken by the directors. Management has concluded that the company is in a strong position and that the outlook remains positive. On this basis the directors consider it appropriate to prepare these financial statements on a going concern basis.
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for 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.
Freight forwarding revenue represents the invoiced value of freight forwarded. Revenue is recognised on the date of departure of an export vessel or when all performance obligations have been met for an import vessel. Where the service is not specific to a vessel then recognition is based on when a service is rendered.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Land and buildings - Leasehold
over the term of the lease
Plant and machinery
10% straight line
Fixtures, fittings and equipment
10% straight line
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 credited or charged to the profit or loss account.
1.5
Impairment of fixed assets
At each reporting period end date, the company 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.
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 the profit or loss account, 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 the profit or loss account, 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.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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
Basic financial assets, which include debtors 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
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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the profit and loss account.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.
Impairment of debtors
Management reviews the carrying amount of trade receivables on a regular basis to identify items where recoverability may be in doubt. The timing and quantum of any impairment of receivables is a matter of management judgement. Details of any such impairments are included in the notes to these accounts.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.
Classification of financial liabilities
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 company after deducting all of its liabilities.
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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 creditors 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company 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 company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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 profit and loss account, 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 when the company has 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.
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 16 -
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
Foreign exchange
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Trade accruals provision
The company maintains a provision for impairment of trade accruals. Trade accruals are recognised when a corresponding sale has been recorded in the relevant period but the purchase invoice has not been received. Due to time which may elapse between the services being undertaken and the invoice being received, the balance can become significant. As such, management review this regularly and provide for any invoices over a certain date.
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Services
43,916,776
78,872,013
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
21,719,778
58,595,570
Rest of Europe
18,011,793
14,177,351
Rest of the World
4,185,205
6,099,092
43,916,776
78,872,013
2024
2023
£
£
Other revenue
Interest income
331
5,786
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration
41
41
Sales
18
17
Total
59
58
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,190,790
2,120,788
Social security costs
250,740
236,041
Pension costs
45,897
362,112
2,487,427
2,718,941
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 18 -
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
85,111
(328,694)
Depreciation of owned tangible fixed assets
6,311
6,312
Amortisation of intangible assets
63,188
Operating lease charges
92,667
81,010
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
31,000
32,200
For other services
All other non-audit services
16,760
25,008
Audit remuneration was borne by the company for the whole group, primarily consisting of Warrant Group 2019 Limited and in the prior year Warrant Corporate Holdings Limited also.
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
276,372
19,080
Company pension contributions to defined contribution schemes
2,700
318,416
279,072
337,496
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
153,533
10,833
Company pension contributions to defined contribution schemes
-
160,000
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
700,119
700,165
Adjustments in respect of prior periods
(169)
Total current tax
700,119
699,996
The actual charge 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:
2024
2023
£
£
Profit before taxation
2,660,732
3,359,167
Expected tax charge based on the standard rate of corporation tax in the UK of 24.00% (2023: 19.00%)
638,576
638,242
Tax effect of expenses that are not deductible in determining taxable profit
61,543
61,966
Adjustments in respect of prior years
(169)
Permanent capital allowances in excess of depreciation
(43)
Taxation charge for the year
700,119
699,996
9
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
331
Other interest income
5,786
Total income
331
5,786
10
Dividends
2024
2023
£
£
Interim paid
9,956,064
7,842,704
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 20 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 February 2023 and 31 January 2024
967,455
Amortisation and impairment
At 1 February 2023 and 31 January 2024
967,455
Carrying amount
At 31 January 2024
At 31 January 2023
Goodwill arose on the acquisition of two businesses in previous periods; they have now been fully amortised.
12
Tangible fixed assets
Land and buildings - Leasehold
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 February 2023 and 31 January 2024
141,780
519,299
446,124
1,107,203
Depreciation and impairment
At 1 February 2023
49,621
519,299
442,647
1,011,567
Depreciation charged in the year
2,834
3,477
6,311
At 31 January 2024
52,455
519,299
446,124
1,017,878
Carrying amount
At 31 January 2024
89,325
89,325
At 31 January 2023
92,159
3,477
95,636
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,659,349
5,756,441
Amounts owed by group undertakings
7,045,316
12,000,000
Other debtors
193,441
3,764,921
Prepayments and accrued income
3,100,293
1,730,800
13,998,399
23,252,162
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
13
Debtors
(Continued)
- 21 -
Trade debtors are stated after provisions for impairment of £13,013 (2023: £9,574).
Amounts owed by group undertakings are due on demand and interest free.
Included within other debtors are director loan accounts, which were overdrawn at the year end date by £3,307 (2023: £497,028). The maximum overdrawn balance during the year was £497,028.
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank overdrafts
15
709,498
1,056,697
Trade creditors
1,864,783
2,033,539
Corporation tax
984,876
325,027
Other taxation and social security
59,845
119,071
Other creditors
3,322,412
4,329,705
Accruals and deferred income
4,144,262
5,406,721
11,085,676
13,270,760
Bank overdrafts are secured by a debenture over all assets of the group.
Other creditors include £3,296,591 (2023: £4,329,705) subject to an invoice discounting facility secured on trade debt.
15
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
709,498
1,056,697
Payable within one year
709,498
1,056,697
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
45,897
362,112
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions amounting to £9,053 (2023: £nil) were payable by the company to the fund at the reporting date and are included within other creditors.
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
On 27 January 2023, a special resolution was passed to reduce the share capital of the company from £3,000,000 to £10,000 by cancelling and extinguishing 2,9990,000 of the issued Ordinary shares of £1.00 each in the Company, each of which is fully paid up.
18
Financial commitments, guarantees and contingent liabilities
The group is subject to an unlimited inter-company guarantee between Warrant Group Limited and Warrant Group (Trustee) Limited.
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
104,415
107,203
Between two and five years
78,041
104,415
185,244
WARRANT GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 23 -
20
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2024
2023
2024
2023
£
£
£
£
Other related parties
722,175
407,803
346,692
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Other related parties
-
3,092,479
Other related parties relate to a company with common ownership and directors. All transactions were undertaken on commercial terms and on an arms length basis.
Other information
The company has taken advantage of the exemption conferred by section 33.1A of FRS 102 not to disclose transactions with other wholly owned subsidiaries within the group as consolidated accounts including the subsidiary undertakings are publicly available.
The key management personnel are deemed to be the directors as disclosed in note 7.
Details of director loan accounts have been disclosed in Note 13.
21
Ultimate controlling party
The company's immediate parent company is Warrant Group 2019 Limited and their registered address is Warrant House, 157 Regent Road, Liverpool, L5 9TF.
Warrant Group 2019 Limited is the smallest and largest group into which the results of this entity are consolidated. The consolidated financial statements are available from the registered address above.
There is no ultimate controlling party.
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