Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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SERVICE EXPRESS EUROPE LIMITED
COMPANY INFORMATION
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SERVICE EXPRESS EUROPE LIMITED
CONTENTS
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SERVICE EXPRESS EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report of the Company for the year ended 31 December 2023.
Principal activity Service Express Europe’s core deliverable is the provision of critical IT services through its market leading offering in third-party maintenance and managed infrastructure services. Business review Revenues for the year increased 13% to £66.7m, versus £59.0m for the year ended 31 December 2022. The profit before tax decreased 30% to £6.5m, versus £9.3m for the year ended 31 December 2022. The directors are satisfied with the 2023 trading results. Management are confident that the Company’s continued commitment to providing the highest level of customer service in the industry means it will continue to perform in the following years. The Company takes a long term view in its engagement with both customers and suppliers and strives to secure longer term relationships with both to maximise outcomes for all stakeholders.
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SERVICE EXPRESS EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are satisfied that there are no significant risks or uncertainties beyond those of normal market conditions. The Company’s customer base is diverse from both a sector and geographical perspective so it is not subject to risk of reliance on one customer, market or grography.
The Company runs two UK based data centres so any volatility in the price of wholesale electricity in the UK may translate into financial risk. This is mitigated using fixed price electricity agreements to provide price stability and predictability. The Company’s core deliverable is the provision of critical IT services and is therefore exposed to the risk that our technology or expertise may become obsolete if not kept up to date. This risk is mitigated by continued investment in our data centres, improvement of our technology stack and Training to ensure we maintain market leading infrastructure and expertise. A further description of principal risks and uncertainties is detailed within the Directors' report. Going concern The financial statements have been prepared using the going concern basis of accounting. The directors continually monitor the ability of the Company to continue to operate as a going concern. As at 31 December 2023, the Company had cash resources of £1.8m (2022: £2.8m), net current assets of £31.8m (restated 2022: £24.0m). The Company has no external loans or borrowings. In the year to 31 December 2023, the Company made a profit before tax of £6.5m (2022: £9.3m). The Company’s forecasts and projections, taking in to account the reasonable possibility of changes in trading performance, show that the Company is able to operate within the level of its current resources, which is supported by trading in the period since the year-end when measured against both the prior period and associated budgets which have been set. After making enquiries of the shareholders, the directors consider it is appropriate to prepare the financial statements on a going concern basis. Future developments The Company is achieving growth in revenue. The Directors recognise that to continue this growth continued investments will be made in the service delivery and IT infrastructure of the business. The business will continue to develop and grow its data centre capabilities and service offerings and are confident that it has the capacity to do so.
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SERVICE EXPRESS EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's financial key performance indicators are service revenue, gross profit and EBITDA (Earnings before interest, tax, depreciation and amortisation).
Year Year Variance 2023 2022 £m £m £m % Services revenue 61.7 54.2 7.5 14% Gross profit 43.8 45.8 (2.0) (4%) EBITDA 15.1 15.7 (0.6) (4%) Services revenue is a key performance indicator as this reflects the growth of the ongoing recuring revenue base over the period. This has grown by 14% year on year driven by both new business and increased business with existing customers. Gross profit is important as it reflects the ability to deliver revenue efficiently. During the year gross profit declined by £2.0m this was mainly driven by a £3.8m increase in depreciation charged to cost of sales. The group undertook significant capital expenditure in 2022 and the full effect of this depreciation is now being seen in 2023. The group has also seen an increase in the costs of inventory due to pressures on global supply chain throughout 2023. EBITDA is a key measure of the performance of the business. This has declined by £0.6m, part of this is driven by the increase in costs of inventory. The Company has also seen an increase in administration costs in two main areas. The costs of the electricity increased significantly in the period, the effect of this was delayed by fixed agreements the Company had in place but as these ended the Company was exposed to increase in market rates. Administration overheads have also increased due to higher spend on flights, travel and computer software. The Company has continued to invest in these areas to improve global collaboration and drive growth though closer integration and sharing of systems and best practices.
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SERVICE EXPRESS EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's key non-financial performance indicators are customer satisfaction and employee engagement.
The Directors are satisfied that all performance measures are being met and will continue to be met. Section 172 Statement The Directors consider (individually and collectively) in good faith that during the period they have acted in a way that is most likely to promote the success of the Company for the benefit of its members as a whole, having regard to the stakeholders of the Company and the matters set out Section 172 of the Companies Act 2006. In carrying out this duty during the period, the Directors have had regard for, amongst other things, the matters set out below. The likely Consequences of any decisions in the long term The Company’s strategy has been set by the Directors in order to maximise value to its customers, employees, shareholders and all other stakeholders, with the aim of growing its existing business, maintaining value in its assets, developing new service offerings and expanding its geographic reach. Budgets and forecasts are prepared throughout the period to enable the Directors to track performance and to make informed decisions on any mitigating actions required, having regard to the likely long-term consequences of any decisions taken. The Interests of the Company’s Employees The Directors recognise that the Company’s employees are fundamental and core to our business and the delivery of our strategic ambitions. The success of our business depends upon attracting, retaining and motivating employees. The Company aims to be a responsible employer in its approach to employee benefits, including pay, and it monitors employee satisfaction to identify opportunities for improvement or further employee engagement. The Directors factor the implications of decisions on employees and our wider workforce, where relevant and feasible. The Company's policy is to give full and fair consideration to applications for employment made by disabled persons, having regard to their particular aptitudes and abilities. Disabled employees receive appropriate support and training to promote their career development within the Company. Employees who become disabled are retained in their existing posts where possible or retrained for suitable alternative posts. The need to foster the company’s business relationships with suppliers, customers and others Delivering our strategy requires strong mutually beneficial relationships with suppliers, customers, related parties, Company members and other key stakeholders. The Company performs account reviews with customers and suppliers to understand performance, satisfaction and opportunities for improvement, with the Directors receiving updates on key outputs to continue to foster and strengthen those relationships. The impact of the company’s operations on the community and the environment The Company is committed to minimising its impact on the environment and delivering environmentally sustainable services. The Company is a signatory to the Climate Neutral Now Pledge and was awarded a Gold for Reduce and a Silver for Measure in the period as a result of its sustainability efforts, including moving its UK datacentres to renewable grid electricity. Since its baseline report in 2020, the Group has reduced its total tCO2e in absolute terms by 68%.
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SERVICE EXPRESS EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The reputation for a high standard of business conduct The Directors understand that to continue achieving the Company’s objectives, it must protect its reputation and relationships with its stakeholders. Through the Company’s ongoing tracking and review of business and employee performance, training and development, customer feedback and continuous improvement, the Directors ensure a reputation for a high standard of business conduct is maintained. The need to act fairly as between members of the company After weighing up all relevant factors, the Directors consider which course of action best enables delivery of the Company strategy through the long term, taking into consideration the impact on stakeholders. In doing so, the Directors strive to act fairly between the Company’s members. However, the Directors acknowledge that they are not necessarily required to balance the Company’s best interests against those of other stakeholders and that certain stakeholder interests may not be fully aligned as a result.
The directors have a statutory duty to promote the success of the Company. This is achieved by working with the management team and staff to formulate long term plans and strategic imperatives, which are monitored and updated regularly.
This report was approved by the board on 25 October 2024 and signed on its behalf.
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SERVICE EXPRESS EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The profit for the year, after taxation, amounted to £7,653k (2022 - £9,033k).
The Directors have not recommended a dividend in either the current year or period.
The directors who served during the year, and after the year end, were:
Treasury operations
The Company operates a centralised treasury function which is responsible for managing the liquidity, interest and credit risks associated with the Company's activities. Liquidity risk The Company manages its cash and borrowing requirements centrally to maximise interest income and minimise interest expense, whilst ensuring that the Company has sufficient resources to meet the operating needs of its businesses. Interest rate risk The Company is not significantly exposed to interest rate risk as it arranges borrowings on fixed rate terms as appropriate. The Company has no external borrowings. Foreign currency risk The Company has exposure to both sales and purchases in foreign currency. The levels of exposure are limited and as trade is predominantly in GBP. The company also maintains bank accounts in both USD and Euro to allow a natural hedge for most transactions. Credit risk Levels of credit are monitored regularly to ensure that the exposure is low. The company has historically experienced a low level of bad debt exposure as the majority of our services are billed in advance.
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SERVICE EXPRESS EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Scope 1: - All Energy Direct Emissions from Sources, activities or equipment under direct control. Scope 2: - All energy indirect emissions from electricity, heat or steam purchased and used. Scope 3: - All other indirect emissions from activities and sources not owned or directly controlled. The above data has been prepared based on the green house gas ('GHG') protocol corporate accounting and reporting standard. The Company’s data centres used 11.7 GWh of power in the year (2022: 10.8 GWh) 84% of this was sourced from renewable sources compared to 100% in 2022. The group is committed to return to 100% renewable source going forwards. As a measure of intensity the total tCO2e per ‘000 (£MB) for 2023 was 0.0158 (2022: 0.0061) The Company has committed by 2025 to reduce scope 1 & 2 Emissions by 90% from a 2020 Base year. The Company has continued to support its commitment to renewable and sustainable energy by undertaking the following projects/initiatives: • LED lighting upgrade throughout our properties • Upgrades of UPS technologies • Solar PV installed at Head office • Operating a fully electric company car fleet • Upgrade of both main office and data center air conditioning to more energy efficient units Charitable and political donations Charitable and political donations of £nil (2022: £nil) were made during the year.
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SERVICE EXPRESS EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Employee involvement
Employee involvement is one of the Group’s main non-financial KPIs. Monthly meetings are held between senior management and employee representatives to discuss matters of concern. Employees are kept well informed about the progress and position of the Group by means of regular updates, meetings, webcasts and the employee intranet. Disabled employees The Company's policy is to give full and fair consideration to application for employment made by disabled persons, having regard to their particular aptitudes and abilities. Disabled employees receive appropriate support and training to promote their career development within the Company. Employees who become disabled are retained in their existing posts where possible or retrained for suitable alternative posts. Qualifying third party indemnity provisions There were no qualifying third-party indemnity provisions in force during the period for the benefit of any directors of the Company. Prior year adjustment During the year, management identified an error whereby capitalised costs of obtaining contracts were presented within Prepayments and Accrued income (£2,460,169) when the should have been shown separately within the Debtors note. This included both an element due within 1 year (£1,625,084) and an element due after more than 1 year (£835,085). These have been reclassified as a prior year adjustment in these financial statements. Additionally, management identified that lease liabilities of an amount of £988,000 was recognised in Creditors: Amounts falling due within one year when it should have been included within Creditors: Amounts falling due after more than one year. These have been reclassified as a prior year adjustment in these financial statements. Finally, management identified Right of Use Assets, with a carrying amount of £7,377,669, which were included within Tangible Assets and have been re-presented as a prior year adjustment, as Right of Use Assets. All of these adjustments are explained further in the table present within note 4 to the financial statements.
On the 15 August 2024 Service Express LLC obtained new Growth Investment from Warburg Pincus. On the 15 August 2024 the Company’s ultimate parent company became Victors Topco, LP. This growth investment will allow the company to continue growth both organically and through acquisition.
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SERVICE EXPRESS EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. 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 judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
This report was approved by the board and signed on its behalf.
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SERVICE EXPRESS EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SERVICE EXPRESS EUROPE LIMITED
We have audited the financial statements of Service Express Europe Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In forming our opinion on the financial statements, which is not modified, we draw attention to the disclosures made in note 4 to the financial statements which explains that restatements have been made to the prior year Prepayments and Accrued Income, Contract Costs, Lease Liabilities, Right of Use Assets and Tangible Assets balances.
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.
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SERVICE EXPRESS EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SERVICE EXPRESS EUROPE LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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SERVICE EXPRESS EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SERVICE EXPRESS EUROPE LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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:
- Testing the financial statement disclosures to supporting documentation, performing substantive testing on account balances which were considered to be of greater susceptibility to fraud; - Performing targeted journal entry testing based on identified characteristics that the audit team considered to be indicative of fraud, for example credit entries to revenue without a corresponding entry to receivables, accrued income or deferred income; - Critically assessing areas of the financial statements which include judgement and estimates, as set out in Note 3 of the financial statements; - We obtained an understanding of the legal and regulatory frameworks applicable to the group and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework, the Companies Act 2006 and relevant tax compliance regulations; and - We understood how the group is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of board minutes and other corroborating evidence.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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SERVICE EXPRESS EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SERVICE EXPRESS EUROPE LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an 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.
for and on behalf of MHA, Statutory Auditor
London, United Kingdom
Date:
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales
(registered number OC312313).
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SERVICE EXPRESS EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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SERVICE EXPRESS EUROPE LIMITED
REGISTERED NUMBER: 02146732
BALANCE SHEET
AS AT 31 DECEMBER 2023
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SERVICE EXPRESS EUROPE LIMITED
REGISTERED NUMBER: 02146732
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Service Express Europe Limited is a private company limited by shares and incorporated in England and Wales. The company registration number is 02146732 and the registered office is Franklin Court, Priory Business Park, Bedford, Bedfordshire, MK44 3JZ.
2.Accounting policies
The financial statements for the year to 31 December 2023 reflect a prior year adjustment, the details of which can be found in note 4. The Company's functional and presentational currency is GBP. The figures in these financial statements are rounded to the nearest thousand.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company has taken advantage of the following disclosure exemptions under FRS 101:
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
∙the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirements of paragraph 58 of IFRS 16, provided that the disclosure of details in indebtedness relating to amounts payable after 5 years required by company law is presented separately for lease liabilities and other liabilities, and in total
∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
- paragraph 79(a)(iv) of IAS 1;
- paragraph 73(e) of IAS 16 Property, Plant and Equipment;
∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
This information is included in the consolidated financial statements of Service Express EMEA Limited as at 31 December 2023 and these financial statements may be obtained from Franklin Court, Priory Business Park, Bedford, Bedfordshire, England, MK44 3JZ.
The financial statements have been prepared using the going concern basis of accounting. The directors continually monitor the ability of the Company to continue to operate as a going concern.
As at 31 December 2023, the Company had cash resources of £1.8m (2022: £2.8m), net current assets of £31.8m (restated 2022: £24.0m). The Company has no external loans or borrowings. In the year to 31 December 2023, the Company made a profit before tax of £6.5m (2022: £9.3m). The Company’s forecasts and projections, taking in to account the reasonable possibility of changes in trading performance, show that the Company is able to operate within the level of its current resources, which is supported by trading in the period since the year-end when measured against both the prior period and associated budgets which have been set. After making enquiries of the shareholders, the directors consider it is appropriate to prepare the financial statements on a going concern basis.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Transactions and balances
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
In obtaining contracts with customers, the Company incurs incremental costs. The Company expects to recover these costs and therefore recognises assets which are amortised over 2 years.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Right of use assets The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: • Motor vehicles - 3 to 5 years • Computer equipment - 3 years If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. Lease liabilities At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Company's lease liabilities are included in creditors.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company applies the short-term lease recognition exemption to its short-term leases of motor vehicles (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Page 24
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Impairment of tangible and intangible assets At each reporting 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 to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest Company of cash-generating units for which a reasonable and consistent allocation basis can be identified. An intangible asset with an indefinite useful life is tested for impairment at least annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal 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.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers. The Company measures fair value using the following hierarchy that considers the importance of the input data used for the measurement: • Level 1 are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. • Level 2 are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 are unobservable inputs for the asset or liability.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:
Financial assets and financial liabilities are initially measured at fair value.
Financial assets
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Impairment of financial assets
At amortised cost
Golub Capital Markets LLC and Cortland Capital Markets LLC hold fixed and floating charges over all assets of the company in respect of worldwide group financing arrangements.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The critical accounting estimates or judgements relevant to the financial statements are embedded within the relevant notes to the financial statements: Valuation of investments (note 14) Management determine whether an impairment provision is required against the investment in subsidiaries. Management’s assessment is based on the financial position and performance of the entities, including the ability of the subsidiaries to generate profits. The directors are satisfied that there is no impairment required in relation to investment in the subsidiaries.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
3.Judgments in applying accounting policies (continued)
Management determine whether impairment provision is required against amounts due from group companies based on the ability of the group companies to generate profits and cash. The directors are satisfied that there is no impairment required in relation to amounts due from group companies. Useful economic lives of tangible fixed assets (note 13) The useful economic lives used by the Company in respect of tangible fixed assets are set out in the accounting policies. These estimates are the best estimate based on past experience and expected performance and are regularly reviewed to ensure they remain appropriate. Carrying value of stock (note 15) The useful economic life used by the Company in respect of stock is assessed by management and the carrying value reduced accordingly. These estimates are the best estimate based on past experience and expected performance and are regularly reviewed to ensure they remain appropriate.
Page 29
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
As previously
reported Adjustment Restated 2022 2022 2022 £000 £000 £000 Balance sheet Creditors falling due within 1 year (41,295) 988 (40,307) Creditors falling due after 1 year (4,573) (988) (5,561) Right of use assets 1,384 7,377 8,761 Tangible assets 29,470 (7,377) 22,093 Debtors Prepayments and accrued income 7,611 (2,460) 5,152 Contract costs - 2,460 2,460 During the year, management identified an error whereby capitalised costs of obtaining contracts were presented within Prepayments and Accrued income (£2,460,169) when the should have been shown separately within the Debtors note. This included both an element due within 1 year (£1,625,084) and an element due after more than 1 year (£835,085). These have been reclassified as a prior year adjustment in these financial statements. Additionally, management identified that lease liabilities of an amount of £988,000 was recognised in Creditors: Amounts falling due within one year when it should have been included within Creditors: Amounts falling due after more than one year. These have been reclassified as a prior year adjustment in these financial statements. Finally, management identified Right of Use Assets, with a carrying amount of £7,377,669, which were included within Tangible Assets and have been re-presented as a prior year adjustment, as Right of Use Assets.
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 32
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 33
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 34
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
The total cash outflow for leases during the year was £3,479k (2022: £1,952k).
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 36
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 37
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
13.Tangible fixed assets (continued)
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 39
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 40
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 41
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 42
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Revaluation reserve
Capital redemption reserve
Capital contribution reserve
Retained earnings
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £843,134 (2022: £803,599). Contributions totalling £
Page 43
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SERVICE EXPRESS EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The immediate parent undertaking is
There is no single ultimate controlling party.
Page 44
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