Company registration number 02242646 (England and Wales)
MATTHEWS & TANNERT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
MATTHEWS & TANNERT LIMITED
COMPANY INFORMATION
Directors
Mr C Matthews
Mr N Donson
Mr J L Matthews
Mrs K Ramsdale
Company number
02242646
Registered office
Bannerman House
Bannerman Road
Kirkby In Ashfield
Nottingham
Nottinghamshire
United Kingdom
NG17 8DU
Auditor
Xeinadin Audit Limited
Cabourn House
Station Street
Bingham
Nottinghamshire
England
NG13 8AQ
MATTHEWS & TANNERT 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
Statement of cash flows
12
Notes to the financial statements
13 - 27
MATTHEWS & TANNERT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Review of the business
We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business.
Business activities and services
Whilst still branding as Plumbing, Heating and Electrical contractors over the last 10 years our work type has diversified to accommodate whole house refurbishment activities. We have continued to deliver these works as a main contractor over the last year, primarily dealing with social housing refurbishment works.
We have continued to operate from our centralised head office in Kirkby in Ashfield and facilitate satellite offices in Leicester and Scunthorpe. Within the last year we have added an additional satellite office in Lincoln. These offices have ensured that we are in the heart of the communities in our contract areas. We have continued to utilise site compounds and smaller projects.
The construction industry is a competitive market. This year saw a return of pre-Covid levels of work and therefore the opportunity for business recovery. We focused our efforts to achieve business growth, controlling our costs and delivering a quality service to our clients and customers.
Principal risks and uncertainties
The principal risks and uncertainties facing the company are believed to be the continuation of contract works available to be undertaken for local authorities, social housing projects and New Build Contractors, together with continuing keen competition and consequent squeezing in profit margins on these contracts. All industry information along with that gathered in the public domain indicated that overall, such contracts work are likely to continue, at least at current levels with growth in areas, with both long-term demand for new housing stock and government pressure for local authorities and housing association to increase occupancy levels of current housing stock.
Going forward risk is being managed by seeking to ensure competitive tendering for those contracts where realistic profit level is still achievable. Along with ensuring we maintain excellent relationships with our existing clients and deliver a quality service.
The company has shown over many years its ability to undertake and successfully deliver on these type contracts and it is financially sound. It has an ongoing program of inhouse apprenticeships to ensure future labour needs can be met and meets current ISO standards for both management, quality and environmental issues.
Financial performance
Turnover for the year amounted to £15,202,458 (2023: £12,212,355) which we considered to be an excellent level for our business. Gross profit for the year was £3,862,240 - 25.4% (2023: £2,637,285 - 21.6%) and profit on ordinary activities for the year was £804,396 (2023: £179,516).
Overall, we consider that the performance of the business, given the prevailing market and competitive tendering, to be strong and that the Company is in a sound financial position at the balance sheet to date. Retained earnings at the year-end stood at £1,792,504 (2023: £1,289,882).
Throughout the year, we reinvested in our fixed assets (fleet of vehicles) which had been impacted on over the last few years due to reduced cashflow following the Covid pandemic. This year saw the investment in 25 new Company vehicles, allowing us to replace failing and aged vehicles from our fleet. We also made significant investment in purchasing greener electric vehicles and are proud at the year end to have added 7 electric vehicles to our fleet.
We have set business growth targets for the next year along with new key performance indicators to measure our success including monitoring non-financial key performance indicators.
MATTHEWS & TANNERT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Our employees
This year, we have continued to deliver our works utilising predominantly our pool of directly employed tradespeople. we have increased our directly employed work force by 5 employees (2024: 104 direct site and labour staff, compared to 2023: 99 direct site and labour staff). We also added 1 new member to our office and admin team (2024: 24 compared to 23 in 2023). We ended the year with a total of 132 employees (2023: 126).
We have continued to heavily invest in the training and developing our employees, to support their aspirations and career development as well as continuously improving our service. We develop individual plans to identify training and developments needs, which are matched with our clients' requirements. This ensures an annual training plan to ensure staff members are both contract ready and satisfied in their work. This year has seen even more inhouse career progressions at all levels.
Apprenticeship commitments
Employment and skills development forms a central part of our business philosophy. We fully appreciate the benefits of developing our own talent. We fully support the development of school leavers, the unemployed and mature students in our apprenticeship scheme. We are committed to continuing our work with apprentices. We will continue to support apprentices and create and apprentice position for our local communities.
At the year end, we had 22 apprentices making up a total of 15% of our workforce. This is the most apprentices we have had working for us at any time. Past number of apprentices are: 2023 - 20, 2022 - 16, 2021 - 16, 2020 - 17).
It has always been the vision that our apprentices are the future of the business, this vision is backed by the fact that many of our apprentices have progressed from apprentices to experienced tradespeople and then on to become site supervisors, contract managers and Directors.
Certifications and accreditations
We maintained our key certifications and accreditations this year including: Gas Safe, NICEIC, OFTEC, CHAS, Safe Contractor, Constructionline, ISO9001, ISO14001. We have also set targets for new certifications and accreditations moving into the next financial year.
Quality and environmental commitments
Matthews and Tannert Ltd gained ISO9001 and ISO14001 certification in May 2014. We successfully completed a 2-day surveillance audit on 15th and 16th November 2023. In preparation for our audit reviewed and revised our key environmental objectives. This year we have been striving to:
- Reduce vehicle emission and minimise fuel use - this has been so far achieved with the purchase of our new more efficient vans, hybrid vehicles and electric cars;
- Maximise our recycling rates - in the year we managed to maintain and exceed our recycling rate of 98% with less than 1% of our waste generated going to landfill;
- Deliver customer satisfaction - we have commenced recording our own customer satisfaction scores to provide us with a benchmark for future ye rather than relying on client data;
- Purchase greener vehicles - this was achieved by swapping 6 of our trucks and cars to electric vehicles.
These targets will be carried over into the next financial year, with a review before our next audit on 27th and 28th November 2024.
Social value
Matthews and Tannert Ltd are always happy to support local initiatives and give back to our local communities as well as the communities where we are working. This year we have sponsored some amazing local events, youth football teams as well as making some fantastic individual donations.
MATTHEWS & TANNERT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
.............................................
Mrs K Ramsdale
Director
Date: .............................................
MATTHEWS & TANNERT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Principal activities
The principal activity of the company continued to be that of plumbing, heating, & general building maintenance contractors.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £66,000. 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 C Matthews
Mr N Donson
Mr J L Matthews
Mrs K Ramsdale
Future developments
There are no plans to significantly change the structure or activities of the company in the foreseeable future, other than the introduction of the holding company that took place shortly after the year end.
Disclosure in the 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.
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
Mrs K Ramsdale
Director
31 October 2024
MATTHEWS & TANNERT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 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.
MATTHEWS & TANNERT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MATTHEWS & TANNERT LIMITED
- 6 -
Opinion
We have audited the financial statements of Matthews & Tannert Limited (the 'company') for the year ended 31 May 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 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.
MATTHEWS & TANNERT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MATTHEWS & TANNERT LIMITED (CONTINUED)
- 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Due to the heavy involvement of the directors in the day to day running of the entity and the oversight over transactions, our assessment of the entity's financial statements to material misstatements, including fraud, is low.
Whilst the below procedures aid us in detecting irregularities, there exists the inherent difficulty in detecting irregularities, particularly those related to fraud. However, we believe the below risks to be the particular areas most susceptible to material misstatement.
Risks identified
Audit response
Dominant influence by management
- Testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
Revenue recognition
- Reviewing a sample of sales around the year end and ensuring correct cut-off had been applied
Laws & regulations, particularly Gas Safe Registration
- Enquiring of management and those charged with governance around actual and potential litigation and claims
- Reviewing correspondence files for evidence of non-compliance
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.
MATTHEWS & TANNERT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MATTHEWS & TANNERT LIMITED (CONTINUED)
- 8 -
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.
Jordan Cain ACA
Senior Statutory Auditor
For and on behalf of Xeinadin Audit Limited
1 November 2024
Chartered Accountants
Statutory Auditor
Cabourn House
Station Street
Bingham
Nottinghamshire
England
NG13 8AQ
MATTHEWS & TANNERT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
15,202,458
12,212,355
Cost of sales
(11,340,218)
(9,575,070)
Gross profit
3,862,240
2,637,285
Administrative expenses
(3,079,712)
(2,456,212)
Other operating income
1,500
4,500
Operating profit
4
784,028
185,573
Interest receivable and similar income
8
62,417
13,899
Interest payable and similar expenses
9
(42,049)
(19,956)
Profit before taxation
804,396
179,516
Tax on profit
10
(234,971)
(34,462)
Profit for the financial year
569,425
145,054
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MATTHEWS & TANNERT LIMITED
BALANCE SHEET
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
785,060
494,696
Current assets
Stocks
14
155,755
209,211
Debtors
15
2,381,698
2,439,053
Cash at bank and in hand
1,840,927
705,164
4,378,380
3,353,428
Creditors: amounts falling due within one year
16
(2,751,650)
(2,209,568)
Net current assets
1,626,730
1,143,860
Total assets less current liabilities
2,411,790
1,638,556
Creditors: amounts falling due after more than one year
17
(451,343)
(265,209)
Provisions for liabilities
Deferred tax liability
20
166,140
82,465
(166,140)
(82,465)
Net assets
1,794,307
1,290,882
Capital and reserves
Called up share capital
22
1,000
1,000
Profit and loss reserves
1,793,307
1,289,882
Total equity
1,794,307
1,290,882
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:
Mrs K Ramsdale
Director
Company registration number 02242646 (England and Wales)
MATTHEWS & TANNERT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2022
1,000
1,260,128
1,261,128
Year ended 31 May 2023:
Profit and total comprehensive income
-
145,054
145,054
Dividends
11
-
(115,300)
(115,300)
Balance at 31 May 2023
1,000
1,289,882
1,290,882
Year ended 31 May 2024:
Profit and total comprehensive income
-
569,425
569,425
Dividends
11
-
(66,000)
(66,000)
Balance at 31 May 2024
1,000
1,793,307
1,794,307
MATTHEWS & TANNERT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,412,615
451,042
Interest paid
(42,049)
(19,956)
Income taxes paid
(6,621)
(26,854)
Net cash inflow from operating activities
1,363,945
404,232
Investing activities
Purchase of tangible fixed assets
(73,068)
(32,693)
Proceeds from disposal of tangible fixed assets
61,460
10,009
Interest received
62,417
13,899
Net cash generated from/(used in) investing activities
50,809
(8,785)
Financing activities
Repayment of bank loans
(66,667)
(66,667)
Payment of finance leases obligations
(146,324)
(127,110)
Dividends paid
(66,000)
(115,300)
Net cash used in financing activities
(278,991)
(309,077)
Net increase in cash and cash equivalents
1,135,763
86,370
Cash and cash equivalents at beginning of year
705,164
618,794
Cash and cash equivalents at end of year
1,840,927
705,164
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
1
Accounting policies
Company information
Matthews & Tannert Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bannerman House, Bannerman Road, Kirkby In Ashfield, Nottingham, Nottinghamshire, United Kingdom, NG17 8DU.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover, for small works and sundry sales, represents net invoiced sales of goods and services, excluding value added tax.
For long term contracts, income is recognised based on the level of practical completion attained, which is determined based on past experience and valuations performed by qualified quantity surveyors. Contracts are broken down sufficiently to allow the directors, with reasonable certainty, to assess the level of profitability associated with them. Provision is made for losses on all long term contracts as soon as such losses become apparent.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
15% on reducing balance
Office equipment
33% on reducing balance
Motor vehicles
25% on reducing balance
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 profit or loss.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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 profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
Stocks are recognised with the First In, First Out (FIFO) method.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
The stage of completion is determined based on past experience and valuations performed by qualified quantity surveyors. Contracts are broken down sufficiently to allow the directors, with reasonable certainty, to assess the level of profitability associated with them.
1.8
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.
1.9
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 profit or loss.
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 profit or loss.
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.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade 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
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 17 -
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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 18 -
1.16
Retentions outstanding on invoiced contract works are included within trade debtors. The ageing split of retentions is based upon contract completion dates and in accordance with contractor agreement terms and/or normal terms of contract works with the contractor for retention release. The retention element of uninvoiced sales is included in amounts recoverable on long term contracts.
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.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Contract work
15,202,458
12,212,355
2024
2023
£
£
Other revenue
Interest income
62,417
13,899
Grants received
1,500
4,500
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(1,500)
(4,500)
Depreciation of owned tangible fixed assets
48,015
57,317
Depreciation of tangible fixed assets held under finance leases
135,130
38,523
Operating lease charges
246,037
243,547
Government grants
Government grants of £1,500 (2023: £4,500) were received for staff training.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
5
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
13,100
12,250
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
4
4
Office & Administration
24
23
Site & Direct Labour
104
99
Total
132
126
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,412,447
3,766,236
Social security costs
431,956
342,544
Pension costs
88,308
77,761
4,932,711
4,186,541
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
467,490
273,162
Company pension contributions to defined contribution schemes
5,387
5,282
472,877
278,444
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
7
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
121,837
75,500
Company pension contributions to defined contribution schemes
1,347
1,321
Key management personnel comprise the executive directors. Their aggregate remuneration is disclosed above.
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
62,417
13,899
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
62,417
13,899
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
18,115
13,344
Other finance costs:
Interest on finance leases and hire purchase contracts
23,934
6,612
42,049
19,956
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
151,296
6,621
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
10
Taxation
2024
2023
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
43,931
27,841
Changes in tax rates
39,744
Total deferred tax
83,675
27,841
Total tax charge
234,971
34,462
From 1 April 2023 the rate of corporation tax was increased to 25% on profits over £250,000.
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
804,396
179,516
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
201,099
34,108
Tax effect of expenses that are not deductible in determining taxable profit
7,831
505
Effect of change in corporation tax rate
26,041
Permanent capital allowances in excess of depreciation
(151)
Taxation charge for the year
234,971
34,462
11
Dividends
2024
2023
£
£
Interim paid
66,000
115,300
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
12
Tangible fixed assets
Plant and equipment
Office equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 June 2023
75,851
78,456
1,498,579
1,652,886
Additions
534,969
534,969
Disposals
(125,341)
(125,341)
At 31 May 2024
75,851
78,456
1,908,207
2,062,514
Depreciation and impairment
At 1 June 2023
67,995
68,538
1,021,657
1,158,190
Depreciation charged in the year
1,177
3,279
178,689
183,145
Eliminated in respect of disposals
(63,881)
(63,881)
At 31 May 2024
69,172
71,817
1,136,465
1,277,454
Carrying amount
At 31 May 2024
6,679
6,639
771,742
785,060
At 31 May 2023
7,856
9,918
476,922
494,696
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Motor vehicles
215,293
257,563
13
Financial instruments
2024 2023
£ £
Financial assets measured at amortised cost 4,222,624 3,144,217
Financial liabilities measured at amortised cost 3,202,993 2,474,777
Financial assets set out above comprise all current assets excluding stocks.
Financial liabilities set out above comprise all creditors due in less than and in more than one year.
14
Stocks
2024
2023
£
£
Materials and parts
155,755
209,211
Stocks are stated after provisions for impairment of £50,000 (2023: £Nil).
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 23 -
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
781,775
1,288,498
Other debtors
1,524,321
1,021,475
Prepayments and accrued income
57,922
67,056
2,364,018
2,377,029
2024
2023
Amounts falling due after more than one year:
£
£
Trade debtors
17,680
62,024
Total debtors
2,381,698
2,439,053
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
18
66,667
66,667
Obligations under finance leases
19
122,490
59,714
Trade creditors
1,362,216
1,278,993
Corporation tax
151,296
6,621
Other taxation and social security
475,978
415,044
Other creditors
3,935
Accruals and deferred income
573,003
378,594
2,751,650
2,209,568
17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
44,444
111,111
Obligations under finance leases
19
406,899
154,098
451,343
265,209
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 24 -
18
Loans and overdrafts
2024
2023
£
£
Bank loans
111,111
177,778
Payable within one year
66,667
66,667
Payable after one year
44,444
111,111
Bank borrowing and facilities are secured by a fixed and floating charge over the assets of the company. Debentures and charges are held as security for all monies due and becoming due to Yorkshire Bank PLC.
The bank loan is repayable over 4.5 years in equal instalments commencing August 2021. Interest is payable monthly in arrears at a rate of 3.7% over the Bank of England base rate.
19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
122,490
59,714
In two to five years
406,899
154,098
529,389
213,812
Obligations under hire purchase contracts and finance leases are secured on the assets to which they relate.
The company has hire purchase and finance leases in respect of the purchase of motor vehicles in the normal course of business.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
171,580
85,653
Other timing differences
(5,440)
(3,188)
166,140
82,465
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
20
Deferred taxation
(Continued)
- 25 -
2024
Movements in the year:
£
Liability at 1 June 2023
82,465
Charge to profit or loss
43,931
Effect of change in tax rate - profit or loss
39,744
Liability at 31 May 2024
166,140
The deferred tax liability set out above relates to capital allowances in excess of depreciation and tax relief on pension creditor.
No material reversal of deferred tax liabilities are expected in the following year.
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
88,308
77,761
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 made into this plan are paid by the Company at rates specified in the rules of the schemes. As at the reporting date, amounts payable of £21,759 (2023: £16,780) had not been paid over to the plan.
22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1,000
1,000
1,000
1,000
The rights, preferences and restrictions attaching to all the Ordinary shares of the company (including restrictions on dividend distributions and repayment of capital) are those prescribed under UK company law.
Each share is entitles to one vote in any circumstance and parri passu to dividend payments or any other distribution including a distribution arising from a winding up of the company.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 26 -
23
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
66,735
63,498
Between two and five years
39,000
41,696
105,735
105,194
24
Events after the reporting date
Shortly after the year end, on 3 June 2024, a new holding company was introduced as part of a restructuring exercise.
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Salary payments
2024
2023
2024
2023
£
£
£
£
Entities over which the entity has control, joint control or significant influence
39,500
39,500
-
-
Major shareholders
-
-
48,454
30,190
Balances due are unsecured, interest free, and repayable on demand.
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Major shareholders
-
4,907
26
Ultimate controlling party
Since the period end, the company was part of a restructuring exercise in which it has now become a wholly owned subsidiary of MRD Holdings limited. Prior to this, the company was not part of a group.
Stephen Matthews is the current ultimate controlling party by virtue of his shareholding in the parent company.
MATTHEWS & TANNERT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 27 -
27
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
569,425
145,054
Adjustments for:
Taxation charged
234,971
34,462
Finance costs
42,049
19,956
Investment income
(62,417)
(13,899)
Depreciation and impairment of tangible fixed assets
183,145
95,840
Movements in working capital:
Decrease in stocks
53,456
65,174
Decrease/(increase) in debtors
57,355
(494,574)
Increase in creditors
334,631
599,029
Cash generated from operations
1,412,615
451,042
28
Analysis of changes in net funds
1 June 2023
Cash flows
New finance leases
31 May 2024
£
£
£
£
Cash at bank and in hand
705,164
1,135,763
-
1,840,927
Borrowings excluding overdrafts
(177,778)
66,667
-
(111,111)
Obligations under finance leases
(213,812)
146,324
(461,901)
(529,389)
313,574
1,348,754
(461,901)
1,200,427
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