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COMPANY REGISTRATION NUMBER:
NI632852
Parr Facilities Management Limited |
|
Parr Facilities Management Limited |
|
Year ended 31 December 2023
Independent auditor's report to the members |
7 |
|
|
Statement of income and retained earnings |
11 |
|
|
Statement of financial position |
12 |
|
|
Statement of cash flows |
13 |
|
|
Notes to the financial statements |
14 |
|
|
Parr Facilities Management Limited |
|
Year ended 31 December 2023
Review of the Company's Business
The principal activities of the company is that of facilities management services across the UK and Ireland.
It was anticipated that 2023 would be a period of significant transition for the company, as management and the directors contemplated changes across client groupings, staff and overall organisational structure. It was envisaged that substantial leadership time and resource would be invested to design, plan and adopt what would be a long term, workable framework for all of the Group companies to work together effectively. The process crept into 2024, delaying the intention to subsume the activities of of Parr Projects into the company - this is now planned to take place before the close of the 2024 financial year. Despite the fact that the process was still in its infancy, by the 2023 year end, the changes implemented at that time saw company revenues increase by approximately 27.9%, and a return to profitability. With continued investment in people, as above, and premises (for example, a new location opened in Glasgow to cover the Scotland region) the company continues to focus on revenues and costs by way of carefully selecting engagements based on expected profitability, and by maintaining tighter controls on the resources required to deliver them. As above, the early outcomes are reflected in this year's company results, along with what the newly established Group Executive Leadership Team project are improved prospects for the future. Key Performance Indicators The directors use both financial and non-financial performance indicators to monitor the performance of the business, including the periodic review financial information, customer satisfaction and maintenance of supplier relationships amongst the measures employed. The financial results of the company are set out on pages 13 through to 28 and show an operating profit after interest amounting to £139,388 (2022: operating loss £5,266). Shareholders' funds for the company are £1,877,820 (2022: £1,781,602). The financial results are in line with expectations. Development, Performance and Position of the Company By the end of the 2023 financial year, the company provided services to 126 entities. At the time of writing, this portfolio has since been reduced to 21 'blue-chip' clients, promoting increasingly useful and more profitable alliances with higher-value customers, and facilitating a reduction in the workforce. A notable associated development in 2023 was the introduction of healthcare clients, contributing approximately 15% of total sales. At the time of writing, Parr FM has seen further growth in this sector, and such revenues are projected to constitute 43% of total sales by 2025. It is important to add that Parr FM have also benefitted from engagement with clients outside of healthcare, with increased revenues driven by the augmentation of existing, and the acquisition of new, high-value contracts. In response to increased demand, the company has opened a new office in Southern England, which was fully operational by the time of writing. A comprehensive review of internal processes was undertaken at the company to ensure that all systems and procedures are fit for purpose. This review has led to the development of an implementation plan aimed at enhancing operational efficiency, streamlining workflows, and to ensure that our processes meet both regulatory requirements and best industry practices. This is underway at the time of writing. This review has highlighted that the main trading companies, including Parr FM, would benefit from a a precautionary unencumbered cash injection from the ownership to cover short to medium term working capital requirements, as the outcome of ongoing negotiations aimed at the settlement of previously unknown liabilities reach their conclusion (it is perhaps important to add that these liabilities - before interest and potential surcharges - are included in the 2023 financial statements). This injection will be equity-biased, indicating the majority shareholder's confidence in the long term viability of of the company and Group. Additionally, focus was placed on ensuring that all staff are adequately trained and equipped to support the evolving needs of the company, in terms of technical skills and compliance awareness, in an effort to facilitate employees in fully contributing to the company's growth, with governance and regulations in mind. The efforts alluded to above reflect the leadership's commitment to strengthening the company's operational performance and position in the market in a sustainable manner. Principal Risks and Uncertainties The Directors consider that the company faces the following risks on a day to day basis: Business performance risk The business environment in which we operate continues to be challenging with the key commercial risks being market conditions, costs of raw materials and labour and customer risk. Increased political and macro-economic uncertainty following the result of the recent US election and the continued war in Ukraine has added to these risks. Financial risk management The company uses various financial instruments, including cash, trade debtors, trade creditors and amounts owed to and from related undertakings that arise directly from operations. The main purpose of these financial instruments is to maintain a balance with regard to working capital and reinvestment, ultimately to secure long-term viability. The company does not make use of derivative transactions to minimise exposure to interest rates or foreign exchange. The company's operations expose it to a variety of financial risks that includes liquidity risk, interest rate risk, credit risk and foreign currency risk. The directors review and agree policies for managing each of these risks, which are summarised below: Liquidity and Cash flow risk The liquidity and cashflow position of the company is closely managed to ensure that the business has the resources it needs to deliver products and services when required. The funding position of the company is monitored and relationships with funders developed and managed to ensure that there are adequate facilities available to meet the financing needs associated with the growth ambitions of the business. Interest rate risk The growth in the business will give rise to higher levels of funding. The cost of funds is monitored by the directors, including the requirement for any hedging of interest rate exposure, that may be considered appropriate. Credit risk Uncertainties in the economic climate can give rise to bad debt risk. The board seeks to mitigate this risk by adhering to robust credit control procedures. Credit insurance is taken out where available, and all debtors are reviewed on a regular basis and provision is made for bad or doubtful debts should they arise Foreign exchange risk The company trades predominantly in sterling but is exposed to payment and receipts in other currencies, and in particular Euro and US dollar. The company aims to balance receipts and payments in each currency. As the business grows, and to the extent required and considered appropriate by the directors, currency exposures may be managed by forward buying and selling. There are no financial instruments in place at the financial year end.
Company strategy and Future developments As part of the Group's ongoing efforts to strengthen leadership and operational efficiency, at the time of writing the Executive Leadership Team (ELT) has established a Senior Management Team (SMT), complete with clearly defined Terms of Reference. This structure outlines the reporting framework and sets expectations for performance and accountability within the organisation. The implementation of new performance targets for each company are to be used to promote growth and operational focus. Accordingly, comprehensive budgets for the company will encompass key growth areas, including upcoming projects and strategic initiatives, subject to periodic review and escalation where necessary. The company is seeking to (1) increase its roster of longer term contracts (up to three years) to provide greater visibility in terms of financial foresight and security; (2) continue its expansion into the high-demand healthcare sector; and (3) extend its geographical footprint. These efforts will be supported by ongoing investments in talent, infrastructure, and technology, ensuring that we remain well-positioned to meet our growth targets and deliver sustainable value to our stakeholders.
This report was approved by the board of directors on 20 November 2024 and signed on behalf of the board by:
Registered office: |
Suites 3 & 4 |
Fortwilliam House |
Edgewater Road |
Belfast |
BT3 9JQ |
|
Parr Facilities Management Limited |
|
Year ended 31 December 2023
The director presents his report and the financial statements of the company for the year ended
31 December 2023
.
Directors
The directors who served the company during the year were as follows:
Mr C Coffey |
|
Mr I Morley |
|
Mr S Parr |
|
Mr P McGee |
(Resigned
31 May 2023) |
|
|
Dividends
The director does not recommend the payment of a dividend.
Disclosure of information 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 Sch. 7 to the Large and Medium-sized Companies to be contained in the directors' report. It has done so in respect of future developments and financial risk management (credit risk, liquidity risk, foreign currency risk and cash flow risk).
Director's responsibilities statement
The director is responsible for preparing the strategic report, director's report and the financial statements in accordance with applicable law and regulations. Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the director is required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The director is 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. He is 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all 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.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on
20 November 2024
and signed on behalf of the board by:
Registered office: |
Suites 3 & 4 |
Fortwilliam House |
Edgewater Road |
Belfast |
BT3 9JQ |
|
Parr Facilities Management Limited |
|
Independent Auditor's Report to the Members of
Parr Facilities Management Limited |
|
Year ended 31 December 2023
Opinion
We have audited the financial statements of Parr Facilities Management Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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; - 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 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 director's 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 director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The director is responsible for the other information. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
-
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-
the strategic report and the director's 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 director's 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 director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: -performed analytical procedures to identify any unusual or unexpected relationships; and - assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; and - enquiring of management as to actual and potential litigation and claims. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
John Magee |
(Senior Statutory Auditor) |
|
For and on behalf of |
Aubrey Campbell & Company |
Chartered accountants & statutory auditor |
631 Lisburn Road |
Belfast |
BT9 7GT |
|
20 November 2024
Parr Facilities Management Limited |
|
Statement of Income and Retained Earnings |
|
Year ended 31 December 2023
|
2023 |
2022 |
Note |
£ |
£ |
Turnover |
4 |
13,413,289 |
10,485,999 |
|
|
|
|
Cost of sales |
10,033,490 |
7,594,505 |
|
------------- |
------------- |
Gross profit |
3,379,799 |
2,891,494 |
|
|
|
Distribution costs |
67,133 |
27,324 |
Administrative expenses |
4,365,352 |
3,300,565 |
Other operating income |
5 |
1,257,448 |
479,334 |
|
|
------------ |
------------ |
Operating profit |
6 |
204,762 |
42,939 |
|
|
|
|
Interest payable and similar expenses |
10 |
65,374 |
48,205 |
|
------------ |
------------ |
Profit/(loss) before taxation |
139,388 |
(
5,266) |
|
|
|
|
Tax on profit/(loss) |
11 |
43,170 |
(
109,519) |
|
--------- |
--------- |
Profit for the financial year and total comprehensive income |
96,218 |
104,253 |
|
--------- |
--------- |
|
|
|
|
Retained earnings at the start of the year |
1,781,502 |
1,677,249 |
|
------------ |
------------ |
Retained earnings at the end of the year |
1,877,720 |
1,781,502 |
|
------------ |
------------ |
|
|
|
All the activities of the company are from continuing operations.
Parr Facilities Management Limited |
|
Statement of Financial Position |
|
31 December 2023
Fixed assets
Tangible assets |
12 |
404,459 |
105,558 |
|
|
|
|
Current assets
Stocks |
13 |
1,339,369 |
959,943 |
Debtors |
14 |
5,525,357 |
3,748,980 |
Cash at bank and in hand |
7,272 |
44,198 |
|
------------ |
------------ |
|
6,871,998 |
4,753,121 |
|
|
|
|
Creditors: amounts falling due within one year |
16 |
4,888,024 |
2,756,842 |
|
------------ |
------------ |
Net current assets |
1,983,974 |
1,996,279 |
|
------------ |
------------ |
Total assets less current liabilities |
2,388,433 |
2,101,837 |
|
|
|
|
Creditors: amounts falling due after more than one year |
17 |
444,668 |
293,845 |
|
|
|
|
Provisions |
19 |
65,945 |
26,390 |
|
------------ |
------------ |
Net assets |
1,877,820 |
1,781,602 |
|
------------ |
------------ |
|
|
|
|
Capital and reserves
Called up share capital |
22 |
100 |
100 |
Profit and loss account |
1,877,720 |
1,781,502 |
|
------------ |
------------ |
Shareholders funds |
1,877,820 |
1,781,602 |
|
------------ |
------------ |
|
|
|
|
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the
board of directors
and authorised for issue on
20 November 2024
, and are signed on behalf of the board by:
Company registration number:
NI632852
Parr Facilities Management Limited |
|
Year ended 31 December 2023
Cash flows from operating activities
Profit for the financial year |
96,218 |
104,253 |
|
|
|
Adjustments for: |
|
|
Depreciation of tangible assets |
57,542 |
26,390 |
Interest payable and similar expenses |
65,374 |
48,205 |
Loss on disposal of tangible assets |
13,780 |
6,170 |
Tax on profit/(loss) |
43,170 |
(
109,519) |
Accrued expenses/(income) |
162,119 |
(
218,243) |
|
|
|
Changes in: |
|
|
Stocks |
(
379,426) |
(
176,949) |
Trade and other debtors |
(
1,845,336) |
(
211,433) |
Trade and other creditors |
1,439,901 |
(
74,126) |
|
------------ |
--------- |
Cash generated from operations |
(
346,658) |
(
605,252) |
|
|
|
Interest paid |
(
65,374) |
(
48,205) |
Tax paid |
(
18,470) |
– |
|
--------- |
--------- |
Net cash used in operating activities |
(
430,502) |
(
653,457) |
|
--------- |
--------- |
|
|
|
Cash flows from investing activities
Purchase of tangible assets |
(
370,222) |
(
7,764) |
Proceeds from sale of tangible assets |
(
1) |
7,342 |
|
--------- |
--------- |
Net cash used in investing activities |
(
370,223) |
(
422) |
|
--------- |
--------- |
|
|
|
Cash flows from financing activities
Proceeds from borrowings |
(
98,937) |
(
86,924) |
Proceeds from loans from group undertakings |
(
10,850) |
28,935 |
Payments of finance lease liabilities |
306,657 |
(
54,806) |
|
--------- |
--------- |
Net cash from/(used in) financing activities |
196,870 |
(
112,795) |
|
--------- |
--------- |
|
|
|
Net decrease in cash and cash equivalents |
(
603,855) |
(
766,674) |
Cash and cash equivalents at beginning of year |
(459,818) |
306,856 |
|
|
------------ |
--------- |
Cash and cash equivalents at end of year |
15 |
(
1,063,673) |
(
459,818) |
|
|
------------ |
--------- |
|
|
|
|
Parr Facilities Management Limited |
|
Notes to the Financial Statements |
|
Year ended 31 December 2023
1.
General information
The company is a private company limited by shares, registered in Northern Ireland. The address of the registered office is Suites 3 & 4, Fortwilliam House, Edgewater Road, Belfast, BT3 9JQ.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company returned pre-tax profits of £139,388 (2022: pre-tax losses of £5,266) from continuing operations and ended the period in a net asset position of £1,877,820 (2022: £1,781,602). Whilst the increase in company revenues provides just limited comfort, a return to profitability underlines the strides made by the leadership team in establishing worthwhile processes and procedures with regard to monitoring, resourcing, purchasing, and the careful selection of contracts and engagements. In addition, the finance team have implemented a rigorous routine to include 3-times weekly billing meetings using live information, weekly debtor and creditor meetings, and the production of daily cash flow for the company. The company's current overdraft facilities are due for renewal at the time of writing, and the Directors have taken into consideration the existing relationship with their financiers and the strength of the security provided - accordingly, it is envisaged that renewal should not be an issue (non-committal assurance has been provided by the bank). In addition, the reduction in long term debtors and debtor queries; resolutions with regard to other known material creditors; the changes made at senior leadership and the subsequent financial and non-financial improvements that have resulted; the quality of the company's customer base; and, assurances made by shareholders with regard to the imminent introduction of additional equity and debt funding (per the Strategic Report above) have also been factored in. Taking account of the above, in conjunction with possible changes in trading performance, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company, therefore, continues to adopt the going concern basis in preparing its financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. Going concern In order to assess whether it is appropriate for the company to be reported as a going concern, the directors apply judgement, having undertaken appropriate enquiries and having considered the business activities and the company's principal risks and uncertainties. In arriving at this judgement there are a large number of assumptions and estimates involved. This includes management's expectations of revenue, EBITDA, timing and quantum of future capital expenditure and estimates and cost of future funding. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Provision for bad or doubtful debts The company has significant trade debtor balances from a large number of customers at any given point in time and further to that, significant debtor balances from related party entities. Consequently estimating the required provision for such debtors requires a regular review to identify those entities where events (either historical or current) give management an indication that future collectability may be uncertain.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Fixtures and fittings |
- |
20% reducing balance |
|
Motor vehicles |
- |
20% reducing balance |
|
|
|
|
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units
.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. Work in progress includes labour and attributable overheads.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
4.
Turnover
An analysis of turnover by class of business and geographical market is not given as, in the opinion of the directors, this would be seriously prejudicial to the company's interest.
5.
Other operating income
|
2023 |
2022 |
|
£ |
£ |
Management charges receivable |
1,194,724 |
380,792 |
Other operating income |
62,724 |
98,542 |
|
------------ |
--------- |
|
1,257,448 |
479,334 |
|
------------ |
--------- |
|
|
|
6.
Operating profit
Operating profit or loss is stated after charging:
|
2023 |
2022 |
|
£ |
£ |
Depreciation of tangible assets |
57,542 |
26,390 |
Loss on disposal of tangible assets |
13,780 |
6,170 |
Impairment of trade debtors |
– |
3,061 |
Foreign exchange differences |
5,546 |
48,305 |
|
-------- |
-------- |
|
|
|
7.
Auditor's remuneration
|
2023 |
2022 |
|
£ |
£ |
Fees payable for the audit of the financial statements |
15,250 |
12,000 |
|
-------- |
-------- |
|
|
|
8.
Staff costs
The average number of persons employed by the company during the year, including the director, amounted to:
|
2023 |
2022 |
|
No. |
No. |
Production staff |
72 |
98 |
Administrative staff |
90 |
50 |
Management staff |
3 |
3 |
|
---- |
---- |
|
165 |
151 |
|
---- |
---- |
|
|
|
The aggregate payroll costs incurred during the year, relating to the above, were:
|
2023 |
2022 |
|
£ |
£ |
Wages and salaries |
6,223,627 |
5,267,583 |
Social security costs |
580,722 |
500,498 |
|
------------ |
------------ |
|
6,804,349 |
5,768,081 |
|
------------ |
------------ |
|
|
|
9.
Director's remuneration
The director's aggregate remuneration in respect of qualifying services was:
|
2023 |
2022 |
|
£ |
£ |
Remuneration |
102,049 |
148,098 |
|
--------- |
--------- |
|
|
|
10.
Interest payable and similar expenses
|
2023 |
2022 |
|
£ |
£ |
Interest on banks loans and overdrafts |
24,296 |
24,288 |
Interest on obligations under finance leases and hire purchase contracts |
18,195 |
10,638 |
Other interest payable and similar charges |
22,883 |
13,279 |
|
-------- |
-------- |
|
65,374 |
48,205 |
|
-------- |
-------- |
|
|
|
11.
Tax on profit/(loss)
Major components of tax expense/(income)
Current tax:
UK current tax expense |
– |
3,711 |
Adjustments in respect of prior periods |
3,615 |
(
104,837) |
|
------- |
--------- |
Total current tax |
3,615 |
(
101,126) |
|
------- |
--------- |
|
|
|
Deferred tax:
Origination and reversal of timing differences |
39,555 |
(
8,393) |
|
-------- |
--------- |
Tax on profit/(loss) |
43,170 |
(
109,519) |
|
-------- |
--------- |
|
|
|
Reconciliation of tax expense/(income)
The tax assessed on the profit/(loss) on ordinary activities for the year is higher than (2022: lower than) the
standard rate of corporation tax in the UK
of
23.40
% (2022:
19
%).
|
2023 |
2022 |
|
£ |
£ |
Profit/(loss) on ordinary activities before taxation |
139,388 |
(
5,266) |
|
--------- |
------- |
Profit/(loss) on ordinary activities by rate of tax |
32,617 |
(
1,000) |
Adjustment to tax charge in respect of prior periods |
3,615 |
(
104,837) |
Effect of expenses not deductible for tax purposes |
7,631 |
– |
Effect of capital allowances and depreciation |
(
21,765) |
(
3,682) |
Unused tax losses |
21,072 |
– |
|
--------- |
--------- |
Tax on profit/(loss) |
43,170 |
(
109,519) |
|
--------- |
--------- |
|
|
|
12.
Tangible assets
|
Fixtures and fittings |
Motor vehicles |
Total |
|
£ |
£ |
£ |
Cost |
|
|
|
At 1 January 2023 |
37,807 |
236,523 |
274,330 |
Additions |
– |
370,222 |
370,222 |
Disposals |
– |
(
36,700) |
(
36,700) |
|
-------- |
--------- |
--------- |
At 31 December 2023 |
37,807 |
570,045 |
607,852 |
|
-------- |
--------- |
--------- |
Depreciation |
|
|
|
At 1 January 2023 |
16,864 |
151,908 |
168,772 |
Charge for the year |
4,189 |
53,353 |
57,542 |
Disposals |
– |
(
22,921) |
(
22,921) |
|
-------- |
--------- |
--------- |
At 31 December 2023 |
21,053 |
182,340 |
203,393 |
|
-------- |
--------- |
--------- |
Carrying amount |
|
|
|
At 31 December 2023 |
16,754 |
387,705 |
404,459 |
|
-------- |
--------- |
--------- |
At 31 December 2022 |
20,943 |
84,615 |
105,558 |
|
-------- |
--------- |
--------- |
|
|
|
|
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
|
Motor vehicles |
|
£ |
At 31 December 2023 |
349,917 |
|
--------- |
At 31 December 2022 |
57,020 |
|
--------- |
|
|
13.
Stocks
|
2023 |
2022 |
|
£ |
£ |
Work in progress |
1,339,369 |
959,943 |
|
------------ |
--------- |
|
|
|
14.
Debtors
|
2023 |
2022 |
|
£ |
£ |
Trade debtors |
4,267,342 |
2,787,777 |
Amounts owed by group undertakings |
1,103,562 |
722,059 |
Prepayments and accrued income |
62,075 |
105,834 |
Other debtors |
92,378 |
133,310 |
|
------------ |
------------ |
|
5,525,357 |
3,748,980 |
|
------------ |
------------ |
|
|
|
Included in trade debtors at the year end is £3,124,901(2022: £1,666,591) in relation to an invoice discounting facility.
15.
Cash and cash equivalents
Cash and cash equivalents comprise the following:
|
2023 |
2022 |
|
£ |
£ |
Cash at bank and in hand |
7,272 |
44,198 |
Bank overdrafts |
(
1,070,945) |
(
504,016) |
|
------------ |
--------- |
|
(
1,063,673) |
(
459,818) |
|
------------ |
--------- |
|
|
|
16.
Creditors:
amounts falling due within one year
|
2023 |
2022 |
|
£ |
£ |
Bank loans and overdrafts |
1,173,134 |
599,838 |
Trade creditors |
1,808,246 |
1,307,821 |
Amounts owed to group undertakings |
124,099 |
134,949 |
Accruals and deferred income |
176,810 |
83,650 |
Corporation tax |
21,333 |
36,188 |
Social security and other taxes |
1,377,507 |
435,610 |
Obligations under finance leases and hire purchase contracts |
78,969 |
28,439 |
Other creditors |
127,926 |
130,347 |
|
------------ |
------------ |
|
4,888,024 |
2,756,842 |
|
------------ |
------------ |
|
|
|
Danske Bank Limited holds a charge over all the assets and undertaking of the company, containing a fixed charge, floating charge and negative pledge. The company has provided security in the form of an inter-company cross guarantee in favour of SPE Contracts Limited, a related party
.
17.
Creditors:
amounts falling due after more than one year
|
2023 |
2022 |
|
£ |
£ |
Bank loans and overdrafts |
178,229 |
283,533 |
Obligations under finance leases and hire purchase contracts |
266,439 |
10,312 |
|
--------- |
--------- |
|
444,668 |
293,845 |
|
--------- |
--------- |
|
|
|
18.
Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
|
2023 |
2022 |
|
£ |
£ |
Not later than 1 year |
78,969 |
28,439 |
Later than 1 year and not later than 5 years |
266,439 |
10,312 |
|
--------- |
-------- |
|
345,408 |
38,751 |
|
--------- |
-------- |
|
|
|
19.
Provisions
|
Deferred tax (note 20) |
|
£ |
At 1 January 2023 |
26,390 |
Additions |
39,555 |
|
-------- |
At 31 December 2023 |
65,945 |
|
-------- |
|
|
20.
Deferred tax
The deferred tax included in the statement of financial position is as follows:
|
2023 |
2022 |
|
£ |
£ |
Included in provisions (note 19) |
65,945 |
26,390 |
|
-------- |
-------- |
|
|
|
The deferred tax account consists of the tax effect of timing differences in respect of:
|
2023 |
2022 |
|
£ |
£ |
Accelerated capital allowances |
65,945 |
26,390 |
|
-------- |
-------- |
|
|
|
21.
Financial instruments
The carrying amount for each category of financial instrument is as follows:
Financial assets that are debt instruments measured at amortised cost
Financial assets that are debt instruments measured at amortised cost |
5,525,357 |
3,712,105 |
|
------------ |
------------ |
|
|
|
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost |
3,933,852 |
2,578,888 |
|
------------ |
------------ |
|
|
|
22.
Called up share capital
Issued, called up and fully paid
|
2023 |
2022 |
|
No. |
£ |
No. |
£ |
A Ordinary shares of £ 1 each |
100 |
100 |
100 |
100 |
|
---- |
---- |
---- |
---- |
|
|
|
|
|
23.
Analysis of changes in net debt
|
At 1 Jan 2023 |
Cash flows |
At 31 Dec 2023 |
|
£ |
£ |
£ |
Cash at bank and in hand |
44,198 |
(36,926) |
7,272 |
Bank overdrafts |
(504,016) |
(566,929) |
(1,070,945) |
Debt due within one year |
(259,210) |
(46,047) |
(305,257) |
Debt due after one year |
(293,845) |
(150,823) |
(444,668) |
|
------------ |
--------- |
------------ |
|
(
1,012,873) |
(
800,725) |
(
1,813,598) |
|
------------ |
--------- |
------------ |
|
|
|
|
Parr Facilities Management Limited |
|
Notes to the Financial Statements (continued) |
|
Year ended 31 December 2023
24.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
2023 |
2022 |
|
£ |
£ |
Not later than 1 year |
311,760 |
311,760 |
Later than 1 year and not later than 5 years |
311,760 |
623,520 |
|
--------- |
--------- |
|
623,520 |
935,280 |
|
--------- |
--------- |
|
|
|
25.
Limitation of auditors liability
The company has entered into a liability limitation agreement with its auditor, Aubrey Campbell and Company, on the following basis:
(a) the maximum aggregate amount of the auditor's liability to the company shall not exceed the sum of seven times the fees payable (excluding expenses and value added tax) under the engagement letter agreed for the financial period, or £30,000, whichever is the lesser amount.
(b) the agreement was passed by a resolution of the company's shareholders on 19th November 2024.
26.
Related party transactions
The company owed £124,099 (2022: £114,274) to its parent undertaking at the balance sheet date. During the year the company paid rent to its parent undertaking of £35,000 (2022: £35,000) and received management income of £17,475 (2022: £12,000). Conversely the company was owed £
116,459
(2022: the company owed £ 20,675
) by its fellow subsidiary, SPE Contracts Limited.
During the 2022 year the company received management income of £ 96,500
from SPE Contracts Limited. The company was also owed £ 987,103
(2022: £ 722,059
) by its fellow subsidiary, Parr Projects Limited
. During the year the company received management income of £ 1,177,249
from Parr Projects Limited (2022: £ 272,292
). All amounts are repayable on demand. Note that key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the company, either directly or indirectly. Compensation paid to key management personnel, which includes all employee benefits, in the period was £163,022 (2022: £200,199).
27.
Controlling party
The company regards Parr Group Limited as its parent company
. The company's ultimate parent undertaking is Parr Group Limited. The address of Parr Group Limited is Suites 3 & 4, Fortwilliam House, Edgewater Road, Belfast, BT3 9JQ. Parr Group Limited is the controlling party. Stephen Parr is the ultimate controlling party by virtue of his shareholding in Parr Group Limited
. The parent of the largest group in which the results are consolidated is Parr Group Limited. Parr Group Limited is registered in Northern Ireland.