REGISTERED NUMBER: |
Watts Industries UK Limited |
Strategic Report, Directors' Report and |
Audited Financial Statements |
for the Year Ended 31 December 2023 |
REGISTERED NUMBER: |
Watts Industries UK Limited |
Strategic Report, Directors' Report and |
Audited Financial Statements |
for the Year Ended 31 December 2023 |
Watts Industries UK Limited (Registered number: 02642521) |
Contents of the Financial Statements |
for the year ended 31 December 2023 |
Page |
Strategic Report | 1 |
Directors' Report | 3 |
Statement of Directors' Responsibilities | 4 |
Report of the Independent Auditors | 5 |
Profit and Loss Account | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
Watts Industries UK Limited (Registered number: 02642521) |
Strategic Report |
for the year ended 31 December 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW |
The principal activity of the company during the year was that of the trade of components, parts and devices to serve applications and/or installations in the field of plumbing, heating, the manufacture of valves, manifolds and controls for the water quality, gas and general industries. |
Profit for the year after taxation amounted to £476,565 (2022: £568,666). |
The business had sales decline over the prior year, this was due to challenging market conditions with drop in volume due to the decline in new construction projects and the market remaining conservative due to higher interest rates. The business worked hard to manage the inflationary pressures from the global supply chain in the year. The business continues to manage the operating costs to maintain a good operating margin and income. |
The business is focused on sales growth in key sustainably linked sectors, while continuing to protect the core business working with key customers to deliver high quality Watts products. The business continues to manage the operating costs to maintain a good operating margin and income and maintaining a strong Free Cash Flow to support future investments as required. |
PRINCIPAL RISKS AND UNCERTAINTIES |
One of the key areas of the Company's business strategies is its ability to identify and manage effectively the risks to its business and operations. The Company's approach, through its Integrated Management Systems, is to identify the key risks and then assess the effectiveness of controls to mitigate the impact and likelihood of these risks occurring. The principal risks are set out below, together with a summary of the actions taken to mitigate each risk: |
Reputation and business conduct |
The Company's ability to tender for new work is dependent on its relationship with its customers and other stakeholders. |
The Company monitors performance through customer feedback and complies with the Bribery Act 2010. |
Project delivery | The Company has many projects at any point in time and the risks that the Company is exposed to are dependent on the nature of the work undertaken. |
Projects in progress are managed through the Company's operating structure and procedures. Risks are monitored and updated by dedicated project teams. |
The Board and senior management is committed to the management of these risks through the consistent application of an effective risk management process, augmented where necessary by insurance. |
FUTURE DEVELOPMENTS |
2024 is expected to be an improved picture despite the background of uncertainty created the conflict in the Ukraine and the political landscape. |
Watts Industries UK Limited (Registered number: 02642521) |
Strategic Report |
for the year ended 31 December 2023 |
FINANCIAL KEY PERFORMANCE INDICATORS |
The Directors use key performance indicators (KPI's) to monitor the financial position of the Company as noted below: |
2023 | 2022 |
£ | £ |
Revenue | 7,788,940 | 8,157,827 |
Gross Profit | 3,018,698 | 3,206,680 |
Profit/(Loss) before tax | 631,311 | 635,377 |
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES |
Overview |
In common with other businesses, the company aims to minimise financial risk. The measures used by the Directors to manage this risk include the preparation of profit forecasts and regular monitoring of actual performance against these forecasts. |
Currency Risk |
The Group is exposed to foreign exchange risk. Transaction exposures, including those associated with forecast transactions, are offset where possible through matching liabilities to assets of the same currency. |
Credit Risk |
The Group's principal financial assets are cash, trade debtors and stock. The principal credit risk therefore arises from its trade debtors. In order to manage credit risk, the directors set limits for customers based on a combination of payment history, current knowledge and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history. |
ON BEHALF OF THE BOARD: |
18 November 2024 |
Watts Industries UK Limited (Registered number: 02642521) |
Directors' Report |
for the year ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
The profit for the year, after taxation, amounted to £476,565 (2022: £568,666). The total distribution of dividends for the year ended 31 December 2023 will be £499,961 (2022: £1,000,000). |
DIRECTORS |
DONATIONS |
The company made no political donations or charitable donations during the year £- (2022: £-). |
GOING CONCERN |
The directors are confident that the Company will continue as a going concern for the foreseeable future as set out in note 1. |
MATTERS COVERED IN THE STRATEGIC REPORT |
The Strategic Report includes the following disclosures that would otherwise have been included in the Directors' Report: |
- Business review |
- Key performance indicators |
- Principal risks and uncertainties |
- Financial risk management policies and objectives |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
The directors who held office at the date of approval of this directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the company's auditor is unaware; and each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. |
ON BEHALF OF THE BOARD: |
Watts Industries UK Limited (Registered number: 02642521) |
Statement of Directors' Responsibilities |
for the year ended 31 December 2023 |
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 they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. |
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to : |
- select suitable accounting policies and then apply them consistently; |
- make judgements and 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; |
- assess the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and |
- use the going concern basis of accounting unless they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities |
Report of the Independent Auditors to the Members of |
Watts Industries UK Limited |
Opinion |
We have audited the financial statements of Watts Industries UK Limited (the 'company') for the year ended 31 December 2023 which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
_ |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 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. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Directors' Report and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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. |
Report of the Independent Auditors to the Members of |
Watts Industries UK Limited |
Opinions on other matters prescribed by the Companies Act 2006 |
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. |
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 where 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 directors' 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 Statement of Directors' Responsibilities set out on page four, 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 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. |
Report of the Independent Auditors to the Members of |
Watts Industries UK Limited |
Auditors' 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 a Report of the Auditors 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 directors are responsible for the prevention of irregularities. We carried out the following procedures designed to detect irregularities: |
- Obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that have a direct effect on the financial statements; |
- Enquiry of management around actual and potential litigation claims; |
- Enquiry of management to identify and instances of non-compliance with laws and regulations; |
- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness; |
- Reviewing accounting estimates for evidence of management bias; |
- Reviewing minutes of meetings of those charged with governance and management, where available; and |
- Reviewing the bank for evidence of large and other unusual payments. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Watts Industries UK Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants |
Statutory Auditor |
Meryll House |
57 Worcester Road |
Bromsgrove |
Worcestershire |
B61 7DN |
Watts Industries UK Limited (Registered number: 02642521) |
Profit and Loss Account |
for the year ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 2 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administration costs | ( |
) | ( |
) |
498,161 | 515,493 |
Other operating income | 3 |
OPERATING PROFIT | 6 |
Interest receivable and similar income | 7 |
Interest payable and similar expenses | 8 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 9 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Watts Industries UK Limited (Registered number: 02642521) |
Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Stocks | 14 |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 18 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings |
SHAREHOLDERS' FUNDS |
These financial statements were approved by the Board of Directors and authorised for issue on |
Watts Industries UK Limited (Registered number: 02642521) |
Statement of Changes in Equity |
for the year ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Profit for the year | - | 568,666 | 568,666 |
Total comprehensive income | - |
Dividends | - | ( |
) | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Profit for the year | - | 476,565 | 476,565 |
Total comprehensive income | - |
Dividends | - | ( |
) | ( |
) |
Balance at 31 December 2023 |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements |
for the year ended 31 December 2023 |
1. | ACCOUNTING POLICIES |
Accounting policies |
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company’s financial statements: |
Basis of preparation |
Watts Industries UK Limited (the "Company") is a company limited by shares and incorporated and domiciled in the UK. |
These financial statements were prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland ("FRS 102"). The presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1, unless otherwise stated. |
The Company's ultimate parent undertaking, Watts Water Technologies Inc. includes the Company in its consolidated financial statements. The consolidated financial statements of Watts Water Technologies Inc. are available to the public and may be obtained from Corporate Headquarters, 815 Chestnut Street, North Andover, MA 01845-6098, USA. In these financial statements, the company is considered to be a qualifying entity (for the purposes of this FRS) (see back page) has applied the exemptions available under FRS 102 in respect of the following disclosures: |
- Reconciliation of the number of shares outstanding from the beginning to end of the period; |
- Cash Flow Statement and related notes; and |
- Key Management Personnel compensation. |
As the consolidated financial statements of Watts Water Technologies Inc. include the equivalent disclosures, the Company has also taken the exemptions under FRS 102 available in respect of the following disclosures: |
-The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1. |
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements. |
Measurement convention |
The financial statements are prepared on the historical cost basis. |
Judgements in applying accounting policies and key sources of estimation uncertainty |
In the application of the Company's accounting policies, the Director is required to make judgments, estimates and assumptions. 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below: |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
- Using the information available at the balance sheet date, the Director makes judgements based on experience on the level of provisions required for impairment of stock. Further information received after the balance sheet may impact on the level of provisions required. |
Turnover |
Turnover is the total amount receivable by the company for goods supplied, excluding VAT and trade discounts. Revenue from the sale of goods is only recognised when the company has transferred the significant risks and rewards of ownership of the goods to the buyer and the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity. |
Goodwill |
Goodwill is stated at cost less any accumulated amortisation and accumulated impairment losses. Goodwill is allocated to cash-generating units or group of cash-generating units that are expected to benefit from the synergies of the business combination from which it arose. |
Amortisation |
Amortisation is charged to the profit or loss on a straight-line basis over the estimated useful lives of intangible assets. Intangible assets are amortised from the date they are available for use. |
- Goodwill on acquisition of business 20 years |
Goodwill is amortised on a straight line basis over its useful life. Goodwill has no residual value. |
The company reviews the amortisation period and method when events and circumstances indicate that the useful life may have changed since the last reporting date. |
Goodwill and other intangible assets are tested for impairment in accordance with Section 27 Impairment of assets when there is an indication that goodwill or an intangible asset may be impaired. |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
1. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. |
Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets. |
Leases in which the Company assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. All other leases are classified as operating leases. Leased assets acquired by way of finance lease are stated on initial recognition at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, including any incremental costs directly attributable to negotiating and arranging the lease. At initial recognition a finance lease liability is recognised equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease. Lease payments are accounted for as described at below. |
The company assesses at each reporting date whether tangible fixed assets (including those leased under a finance lease) are impaired. |
Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of each part of an item of tangible fixed assets. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated. The estimated useful lives are as follows: |
- | Warehouse equipment | - | straight line over 5 years |
- | Fixtures, fittings and equipment | - | straight line over 5 years |
- | Office and exhibition equipment | - | straight line over 3 years |
- | Leasehold improvements | - | straight line over 15 years |
Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits. |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured stocks and work in progress, cost includes an appropriate share of overheads based on normal operating capacity. |
Taxation |
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income. |
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
1. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. The following timing differences are not provided for: differences between accumulated depreciation and tax allowances for the cost of a fixed asset if and when all conditions for retaining the tax allowances have been met; and differences relating to investments in subsidiaries, to the extent that it is not probable that they will reverse in the foreseeable future and the reporting entity is able to control the reversal of the timing difference. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense. |
Deferred tax is provided in respect of the additional tax that will be paid or avoided on differences between the amount at which an asset (other than goodwill) or liability is recognised in a business combination and the corresponding amount that can be deducted or assessed for tax. Goodwill is adjusted by the amount of such deferred tax. |
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Transactions in foreign currencies are translated to the Company's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit and loss account. |
Employee benefits |
Defined contribution plans and other long term employee benefits |
A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees. |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
1. | ACCOUNTING POLICIES - continued |
Going concern |
Notwithstanding net current liabilities of £1,455,071 as at 31 December 2023 a profit before tax for the year then ended of £631,311, the financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons. |
The directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the company will have sufficient funds, through funding from its immediate parent company, Watts EMEA Holding B.V., to meet its liabilities as they fall due for that period. |
Those company forecasts are dependent on Watts EMEA Holding B.V. not seeking repayment of the amounts currently due to the group, which at 31 December 2023 amounted to £4,168,187 and providing additional financial support during that period. Watts EMEA Holding B.V. has indicated its intention to continue to make available such funds as are needed by the company, and that it does not intend to seek repayment of the amounts due at the balance sheet date, for the period covered by the forecasts. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so. |
Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. |
Basic financial instruments |
Trade and other debtors / creditors |
Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument. |
Operating lease |
Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in profit and loss over the term of the lease as an integral part of the total lease expense. |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
Rest of world | 114,584 | 116,450 |
3. | OTHER OPERATING INCOME |
2023 | 2022 |
£ | £ |
Rents received |
4. | EMPLOYEES AND DIRECTORS |
The average number of persons employed by the company (including directors)during the year was | as follows: |
Number of employees |
2023 | 2022 |
Sales and distribution | 27 | 29 |
Management | 2 | 2 |
Directors | 1 | 1 |
30 | 32 |
The aggregate payroll costs of these persons were as follows: |
2023 | 2022 |
£ | £ |
Wages and salaries | 1,184,705 | 1,137,074 |
Social security costs | 168,730 | 147,926 |
Other pensions costs | 44,502 | 46,453 |
1,397,937 | 1,331,453 |
5. | DIRECTORS' EMOLUMENTS |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
5. | DIRECTORS' EMOLUMENTS - continued |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
Emoluments recorded above for directors are in relation to services rendered for the wider group and are recharged to Watts EMEA Holding B.V. The directors may also receive share options for their work on the wider group companies from time to time which are also recharged up and are not a cost for this company. |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets |
Foreign exchange differences | ( |
) | ( |
) |
Auditor's remuneration |
Audit of these financial statements | 30,000 | 30,000 |
Non-audit services | 3,665 | 3,665 |
7. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2023 | 2022 |
£ | £ |
Bank and group interest |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Interest payable |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Prior year tax adjustment | 5,655 | - |
Total current tax |
Deferred tax | ( |
) |
Tax on profit |
UK corporation tax was charged at 19%) in 2022. |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes | ( |
) |
Utilisation of tax losses | ( |
) |
Prior year losses for which no deferred tax asset was recognised | - | 23,275 |
Enhanced capital allowances | - | (2,398 | ) |
Deferred taxation over standard rate | (776 | ) | 7,980 |
Prior year tax adjustment | 5,655 | - |
Total tax charge | 154,746 | 66,711 |
Standard rate of taxation |
The standard rate of taxation included in the reconciliation above is 23.521%. This is the effective rate based on the days suffered under the main rate of 19% to 31 March 2023 and 25% from 1 April 2023. |
Factors that may affect future tax charges |
From 1 April 2023 the corporation tax main rate has increased to 25% for profits over £250,000. A small profits rate has been introduced for profits of £50,000 or less, charging corporation tax at 19%. Profits between £50,000 and £250,000 are taxed at the main rate reduced by a marginal relief providing a gradual increase in the effective rate of corporation tax rate. |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
10. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Interim |
11. | INTANGIBLE FIXED ASSETS |
Goodwill |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
12. | TANGIBLE FIXED ASSETS |
Leasehold | Plant and |
improvements | equipment | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
13. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakin |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
PROVISIONS |
At 1 January 2023 |
and 31 December 2023 | 859,770 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: Colmworth Business Park, Eaton Socon, Cambridgeshire, PE19 8YX |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Colmworth Business Park, Eaton Socon, Cambridgeshire, PE19 8YX |
Nature of business: |
% |
Class of shares: | holding |
The net book value of £3,854,463 relates entirely to the company's investment in Black Teknigas and Electro Controls Limited. All other fixed asset investments have been written off in prior periods. |
14. | STOCKS |
2023 | 2022 |
£ | £ |
Raw materials |
Work-in-progress |
Finished goods |
Raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales in the year amounted to £4,703,586 (2022 £4,852,216). The write-down of stocks to net realisable value amounted to £419,730 (2022 £565,349). The write-down is included in cost of sales. |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings | 1,047,369 | 132,220 |
Corporation tax debtors |
Prepayments |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
VAT | 237,501 | 290,250 |
Accrued expenses |
Amounts due to group undertakings are interest free and repayable on demand. |
17. | LEASING AGREEMENTS |
At 31 December 2023, non-cancellable operating lease rentals are payable as follows: |
Land and buildings | Other operating leases |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Within one year | 511,860 | 506,906 | 4,984 | 10,055 |
Between one and five years | 2,033,201 | 2,047,440 | 7,476 | 12,460 |
n more than five years | - | 497,621 | - | - |
2,545,061 | 3,051,967 | 12,460 | 22,515 |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
18. | PROVISIONS FOR LIABILITIES |
Deferred tax assets and liabilities are attributable to the following: |
Assets | Liabilities | Net |
2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
£ | £ | £ | £ | £ | £ |
Carried forward losses recognised | - | (23,275 | ) | - | - | - | (23,275 | ) |
Accelerated capital allowances | - | - | 33,250 | 23,275 | 33,250 | 23,275 |
Net tax (assets)/ Liabilities | - | (23,275 | ) | 33,250 | 23,275 | 33,250 | - |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 10,000 | 10,000 |
20. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme in respect of the employees. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the company and amounted to £44,502 2022 £46,453). £9,064 (2022 £8,721) was outstanding at the end of the year. |
21. | ULTIMATE PARENT COMPANY AND CONTROLLING PARTY |
Watts Water Technologies Inc. (incorporated in USA ) is regarded by the directors as being the company's ultimate parent company. |
Copies of the consolidated financial statements of this company are available from its offices at: |
Corporate Headquarters |
815 Chestnut Street |
North Andover |
MA 01845-6098 |
USA |
The immediate parent company is Watts EMEA Holding B.V, a company incorporated in Holland. Copies of the consolidated financial statements of this company are available from its offices at: |
Strawinskylaan 3099 |
1077 ZX |
Amsterdam |
Netherlands |
Watts Industries UK Limited (Registered number: 02642521) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
22. | RELATED PARTY DISCLOSURES |
The company is exempt from the requirement to disclose transactions with other Watts group undertakings on the grounds that it is a wholly owned subsidiary of Watts EMEA Holding B.V. and its results are included in the company’s financial statements. |
During the year, a total of key management personnel compensation of £ |
This includes compensation for roles not just within this company, but in the wider group. |