Connect Plumbing & Heating Supplies Ltd |
Strategic Report |
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The directors present their Strategic Report and financial statements for the year ended year ended 31 March 2024. |
Connect Plumbing & Heating Supplies Limited is an independent regional plumbing and heating supplies merchant selling & distributing plumbing and heating materials throughout the Southeast of England. |
Fair review of the business |
The directors regard turnover and gross profit margin as the key performance indicators of the business, 2024 saw a significant increase in turnover which in the most part was due to the lifting of Covid restrictions that had been present in previous years. The company currently has six branches across the Southeast, the company opened a new branch in the year where they offer training services for solar panels. In addition to the above KPI’s the directors also believe in strong customer service and achieve this via a number of approaches such as designated point of contacts for key customers, defined Service Level Agreements (SLA) between the company and the customer and continued monitoring of the metrics used to monitor the effectiveness of the above. |
Results, performance and KPI's |
The headline key performance indicators (KPI’s) that the directors monitor with regard to financial performance are as follows: - |
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2024 |
2023 |
Movement % |
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Gross profit |
4,042,483 |
3,887,659 |
3.98% |
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Gross profit margin |
25.19% |
26.85% |
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Profit before tax |
890,580 |
1,301,511 |
-31.57% |
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The directors aims are to continue and enhance this performance by making use of these KPI’s in addition to monitoring non-financial matters including health and safety, employee retention, staff welfare, stock management, operational efficiency and customer satisfaction. |
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Business environment, strategy and future developments |
As a key supplier to the Southeast of England the Company continues to operate within the Repairs, Maintenance, improvements and New Build marketplace and expects to remain competitive within this marketplace. The company continues to look for new sites to acquire in order to open new branches and better serve local communities. Additionally the company is committed to reducing its carbon footprint and has made a number of investments in order to meet its targets e.g. replacing plant & machinery with cleaner energy such as electric, looking into solar and wind investments at suitable branches. The company is also in the process of improving its online experience for the customer and is investing in various platforms to enhance the user experience. |
Connect Plumbing & Heating Supplies Ltd |
Strategic Report |
(continued) |
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Principle Risks & Uncertainties |
The business’s principal risks and uncertainties are economic and financial risks which, together with the policies and actions mitigating these risks are as follows: - |
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Economic Risk |
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The economic risk is based on a downturn in the economy and a potential for reduced demand in both the New Build and Improvements marketplace which in turn would affect the business marketplace. These risks are managed by undertaking regular reviews of the company’s performance achieved against its targets and re-evaluated accordingly to meet the current economic climate. This enables the directors to take action to mitigate against economic events minimising the impact. |
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Financial Risk |
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The financial risk faced by the company focuses on credit risk. Credit risk is attributable to the company’s trade debtors, the amounts shown in the accounts are after bad debts. The company utilises several methods to mitigate this risk, such as credit checks, regular review of credit limits set as well as engaging the services of debt collection specialist. |
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Employees |
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The company recognises that its employees are its most valuable asset and engages with employees via a number of medians such as meetings, newsletters, direct contact and open-door policies with line managers and senior staff. Generally, these various forms of contact focuses on the following topics. |
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• Health & safety in the workplace. |
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• Servicing the needs of customers & suppliers to excellent standards |
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• Employee welfare, including financial matters, staff discounts and other matters. |
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• Compliance. |
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• Any other relevant issues as may be faced at the time. |
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Customers |
The company recognises the need to build strong relationships with its customers and does so by maintaining close contact with its customers through various mediums, e.g. personal contact, emails, telephone calls as well as the company’s website and portal. SLA’s ensure that customers are dealt with in a timely manner and to a high standard. The company’s ethos is to ensure that the customer receives excellent service throughout the entire customer journey. |
Suppliers |
The company also recognises the need to build strong supplier relationships and does so by maintaining close contact with its suppliers through various medians, e.g. personal contact, emails, telephone calls as well as the company’s website and portal. SLA’s ensure that the supplier receives the highest of service throughout the supplier journey. |
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Approved on behalf of the Board |
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G J Toomey |
Director |
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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. |
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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. |
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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 directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
We have nothing to report in this regard. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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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 |
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the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. |
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Matters on which we are required to report by exception |
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. |
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. We did not identify any key audit matters relating to irregularities, including fraud. |
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. |
A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. |
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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. |
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J S Vasir |
(Senior Statutory Auditor) |
5 Margaret Road |
for and on behalf of |
Romford |
Desaur LLP |
Essex |
Chartered Certified Accountants and Statutory Auditor |
RM2 5SH |
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13/11/2024 |
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Investments |
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Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only 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 and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Analysis of turnover |
2024 |
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2023 |
£ |
£ |
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Sale of goods |
16,046,587 |
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14,477,481 |
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By geographical market: |
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UK |
16,046,587 |
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14,477,481 |
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3 |
Operating profit |
2024 |
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2023 |
£ |
£ |
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This is stated after charging: |
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Depreciation of owned fixed assets |
52,699 |
|
54,944 |
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Operating lease rentals - plant and machinery |
89,445 |
|
71,554 |
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Operating lease rentals - land and buildings |
294,014 |
|
263,659 |
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Auditors' remuneration for audit services |
7,000 |
|
7,000 |
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Contributions to defined benefit pension plans |
97,415 |
|
74,624 |
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Carrying amount of stock sold |
12,110,833 |
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10,826,701 |
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4 |
Directors' emoluments |
2024 |
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2023 |
£ |
£ |
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Highest paid director: |
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Emoluments |
53,931 |
|
51,225 |
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Company contributions to defined contribution pension plans |
60,000 |
|
41,500 |
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|
113,931 |
|
92,725 |
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5 |
Staff costs |
2024 |
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2023 |
£ |
£ |
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Wages and salaries |
1,718,229 |
|
1,219,379 |
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Social security costs |
153,053 |
|
137,693 |
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Other pension costs |
97,415 |
|
74,624 |
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1,968,697 |
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1,431,696 |
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Average number of employees during the year |
Number |
Number |
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Administration |
7 |
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7 |
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Distribution |
9 |
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8 |
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Sales |
21 |
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17 |
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|
37 |
|
32 |
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6 |
Interest payable |
2024 |
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2023 |
£ |
£ |
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Other loans |
14,603 |
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21,286 |
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7 |
Taxation |
2024 |
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2023 |
£ |
£ |
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Analysis of charge in period |
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Current tax: |
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UK corporation tax on profits of the period |
226,424 |
|
260,757 |
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Adjustments in respect of previous periods |
(8,401) |
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- |
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|
218,023 |
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260,757 |
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Deferred tax: |
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Origination and reversal of timing differences |
(772) |
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65,027 |
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Tax on profit on ordinary activities |
217,251 |
|
325,784 |
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
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2024 |
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2023 |
£ |
£ |
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Profit on ordinary activities before tax |
890,580 |
|
1,301,511 |
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Standard rate of corporation tax in the UK |
25% |
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19% |
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£ |
£ |
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Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
222,645 |
|
247,287 |
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Effects of: |
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Expenses not deductible for tax purposes |
7,396 |
|
5,974 |
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Capital allowances for period in excess of depreciation |
(3,617) |
|
7,496 |
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Adjustments to tax charge in respect of previous periods |
(8,401) |
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- |
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Current tax charge for period |
218,023 |
|
260,757 |
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8 |
Tangible fixed assets |
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Land and buildings |
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Plant and machinery |
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Total |
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At cost |
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At cost |
£ |
£ |
£ |
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Cost or valuation |
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At 1 April 2023 |
378,883 |
|
317,007 |
|
695,890 |
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Additions |
136,541 |
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43,571 |
|
180,112 |
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At 31 March 2024 |
515,424 |
|
360,578 |
|
876,002 |
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Depreciation |
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At 1 April 2023 |
78,399 |
|
244,579 |
|
322,978 |
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Charge for the year |
20,341 |
|
32,358 |
|
52,699 |
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At 31 March 2024 |
98,740 |
|
276,937 |
|
375,677 |
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Carrying amount |
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At 31 March 2024 |
416,684 |
|
83,641 |
|
500,325 |
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At 31 March 2023 |
300,484 |
|
72,428 |
|
372,912 |
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9 |
Investments |
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Other |
investments |
£ |
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Cost |
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At 1 April 2023 |
1,200 |
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At 31 March 2024 |
1,200 |
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10 |
Stocks |
2024 |
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2023 |
£ |
£ |
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Finished goods and goods for resale |
1,898,167 |
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1,791,439 |
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11 |
Debtors |
2024 |
|
2023 |
£ |
£ |
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Trade debtors |
1,929,980 |
|
1,951,568 |
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Prepayments and accrued income |
140,710 |
|
76,434 |
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|
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|
2,070,690 |
|
2,028,002 |
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12 |
Creditors: amounts falling due within one year |
2024 |
|
2023 |
£ |
£ |
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Bank overdrafts |
1,836 |
|
- |
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Trade creditors |
1,389,616 |
|
1,620,977 |
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Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
280,048 |
|
426,731 |
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Corporation tax |
157,556 |
|
203,033 |
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Other taxes and social security costs |
13,705 |
|
37,699 |
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Other creditors |
382,887 |
|
99,971 |
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Accruals and deferred income |
242,174 |
|
101,872 |
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|
|
|
|
2,467,822 |
|
2,490,283 |
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13 |
Deferred taxation |
2024 |
|
2023 |
£ |
£ |
|
|
Accelerated capital allowances |
64,255 |
|
65,027 |
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|
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|
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|
|
|
|
2024 |
|
2023 |
£ |
£ |
|
|
At 1 April |
65,027 |
|
- |
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(Credited)/charged to the profit and loss account |
(772) |
|
65,027 |
|
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At 31 March |
64,255 |
|
65,027 |
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14 |
Share capital |
Nominal |
|
2024 |
|
2024 |
|
2023 |
value |
Number |
£ |
£ |
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Allotted, called up and fully paid: |
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Ordinary shares |
£1 each |
|
100 |
|
100 |
|
100 |
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15 |
Profit and loss account |
2024 |
|
2023 |
£ |
£ |
|
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At 1 April |
2,990,194 |
|
2,514,467 |
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Profit for the financial year |
673,329 |
|
975,727 |
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Dividends |
(340,000) |
|
(500,000) |
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At 31 March |
3,323,523 |
|
2,990,194 |
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|
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16 |
Dividends |
2024 |
|
2023 |
£ |
£ |
|
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Dividends on ordinary shares (note 15) |
340,000 |
|
500,000 |
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17 |
Other financial commitments |
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Total future minimum lease payments under non-cancellable operating leases: |
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Land and buildings |
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Land and buildings |
Other |
Other |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
£ |
£ |
£ |
£ |
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Falling due: |
|
within one year |
293,658 |
|
238,158 |
|
53,690 |
|
65,072 |
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within two to five years |
1,174,632 |
|
952,632 |
|
33,787 |
|
87,476 |
|
in over five years |
1,230,132 |
|
1,190,790 |
|
- |
|
- |
|
|
2,698,422 |
|
2,381,580 |
|
87,477 |
|
152,548 |
|
|
|
|
|
|
|
|
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18 |
Related party transactions |
2024 |
|
2023 |
|
|
|
|
|
|
£ |
|
£ |
|
Dividends |
|
During the year, the company paid dividends of £340,000 (2023-£500,000) to related parties. |
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Amount due (to) from the related party |
(340,000) |
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(500,000) |
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Laindon Trading LLP |
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During the period, Laindon Trading LLP provided management services for serviced accommodation, staff, plant and vehicles hire to the company. The total value of such transactions amounted to £2,024,224 (2023-£1,600,383). |
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Amount due (to) from the related party |
(377,173) |
NIL |
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PGR Enterprises Ltd |
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During the year, Interest of £14,603(2023- £21,286) was charged by PGR Enterprises Ltd to the company. |
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Amount due (to) from the related party |
(280,048) |
|
(426,731) |
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PGR Timber Ltd |
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During the year, PGR Timber Ltd charged management fees of £212,753 (2023-£164,100) to the company. |
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During the year, sales and purchases were made between the two companies amounting to £46,643 and £359,558 (2023 £1,203 and £316,335) respectively. |
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Amount due (to) from the related party |
(25,729) |
|
(72,758) |
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19 |
Controlling party |
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The ultimate controlling party of the company is Mr G J Toomey by virtue of his 100% holding in PGR Enterprises Ltd |
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20 |
Presentation currency |
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The financial statements are presented in Sterling. |
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21 |
Legal form of entity and country of incorporation |
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Connect Plumbing & Heating Supplies Ltd is a private company limited by shares and incorporated in England. |
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22 |
Principal place of business |
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The address of the company's principal place of business and registered office is: |
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Courtauld House |
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Courtauld Road |
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Basildon |
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Essex |
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SS13 1RZ |