Company registration number 03305853 (England and Wales)
RGE SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
RGE SERVICES LIMITED
COMPANY INFORMATION
Directors
S Benson
R Fagan
Company number
03305853
Registered office
The Nurseries
Gravel Lane
Chigwell
Essex
England
IG7 6BZ
Auditor
Azets Audit Services
5 Yeomans Court
Ware Road
Hertford
Hertfordshire
United Kingdom
SG13 7HJ
RGE SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 24
RGE SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 30 June 2024.
Fair review of the business
RGE has delivered another year of strong performance, recording revenues of £31.4m, which equates to a 52% compounded annual growth rate (CAGR). The business grew gross profit from £9.2m last year to £13.1m with a gross profit margin of 42% (2023: 45%) by delivering and developing excellent long term client relationships and with leading client satisfaction scores serving the social housing and related sectors with our fire and electrical safety compliance offering.
After administrative expenses and other operating income, RGE made an operating profit of £4.9m with an operating profit margin of 16% (2023: £3.7m 18%). After adjusting for depreciation, amortisation, and exceptional items, EBITDA for the year was £5.7m (2023 £4.2m) with an EBITDA margin of 18% (2023: 20%). Profit after interest and tax was £3.8m (2023 £3m) with a PAT margin of 12% (2023: 15%) with the increase in the corporation tax rate driving the percentage movement.
As would be expected from a business that marked a significant growth in revenue in the year, the number of staff we employ increased significantly too. Average employees in the period were 244 (2023: 179) and we continue to successfully recruit via our core PAYE model to fulfil an ever-increasing order book, having strengthened our people and management functions further. This enables us to ensure quality of service delivery with engineering talent that reflects the values and ethics that we consider non negotiable in our service delivery, as we aim to exceed expectations of our clients.
We launched our passive fire offer in the year to serve our clients with timely remediation of fire stopping activities and saw good levels of growth which we expect to continue, having recruited a talented team to lead. We also increased the size of our fleet in the year to support growth and further developed our ESG strategy, including contributing to charities to help the communities we serve.
The business has exciting future growth prospects and continues to lay the foundations for future growth, investing in our people and developing our five point strategy to support further growth in serving the sectors in which we operate, to keep our clients residents safe with fire and electrical compliant residential and communal properties.
We are in the process of enhancing our digital offering over the coming year to support sustainable growth and further drive efficiency. We have developed and enhanced our People Strategy and are working hard to being an employer of choice in our sector to ensure we recruit, train and retain the best talent to serve our clients and their residents our ability to attract and retain staff in what is an increasingly competitive market.
In May 2024, we received a significant vote of confidence in our business and the essential services we provide to keep our clients residents and communities safe with regards to fire and electrical compliance. We secured the largest ever to date investment in the company to help further expand our core services to enable us to expand our service offering and serve more communities in the years ahead nationally.
RGE SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Principal risks and uncertainties
With support from the Senior Management Team, the Board has established an effective framework for identifying, monitoring, and managing risks. The key risks the business currently faces are:
Resourcing
We operate in an economy where the demand for labour talent outstrips supply. This is particularly pertinent in our sector where we require appropriately experienced and qualified engineers to deliver a range of fire and electrical compliance services to our customers, across the diverse communities we serve. We are also in a period of significant growth, including launching our new passive fire compliance offering and increased our resourcing capability for now and our future. With our head of People we developed strategies for recruitment, reward and retention recognising that we aim to become an employer of choice. This has so far proved successful, and we are managing to keep up with our requirements for new staff as we continue to grow. We also nurtured upcoming talent from the diverse communities we serve and after the year end were proud that one of our cohort of apprentices was recognised as winner of ‘Apprentice of the year’ by the Construction News awards, a great achievement and truly reflective of her passion, organisation and drive to deliver the very best service for the communities we serve.
Inflation
Like everyone, we have continued to see elevated levels of inflationary pressures during the year. This has mainly impacted the business through higher materials, fuel, and staff costs. To mitigate these increases, where possible, we have renegotiated contract prices with our customers and sought to continue to deliver in an efficient manner. Given our customer base, we have to be sensitive to their overall purpose and residents. However, on the whole, our customers have recognised the challenge and they have been open to negotiations, particularly given the strong relationships and reputation we have established, as well as a fact-based conversation around inflationary pressures. Management believes that EBITDA margins remain at a good level as we continue to grow our service offering.
Fleet
Fleet availability of new vehicles eased during the year, although this is actively monitored to ensure we can continue to support the growth from demand for our services. As a management team, we now plan further in advance and intend to recruit a fleet manager to manage the effective utilisation of the fleet and align forward orders to meet our needs at the right time in an efficient manner. Our proactive approach has meant that the business has sustained an adequate supply of vehicles to deliver on our contractual commitments in the year. In recent months
we have secured vehicles for the foreseeable future and as a management team, with the support of our network, we will monitor the market so we ensure availability meets our business needs.
IT and Technology
The group recognises the need for investment in technology to operate efficiently and sustainably as the business grows. We recently engaged external technology consultants to assist with a strategic review and are in the process of recruiting a Chief Information Officer to ‘future proof’ our technology offering and help to drive a superior client experience in an efficient manner. This is expected to further underpin our growth expectations, providing a scaleable platform that is fit for purpose in the years ahead. We expect to further invest in 2025 to deliver technological transformation, including of core processes and in field management tools and asset data.
RGE SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
Key performance indicators
We are in a period of significant growth and our aim is to continue on this trajectory. The indicators we use to measure performance against our targets are:
Annual Revenue growth (%): year-on-year growth in revenue as a %
Operating margin (%): operating profit as a % of revenue
Underlying EBITDA Margin (%): operating profit plus depreciation, amortisation, and exceptional items, as a % of revenue
Revenue per employee (£): total revenue per average number of employees in the year
Our performance against these metrics for the current and previous year are shown below:
| | | |
Annual revenue growth (%) | | | |
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| | | |
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S Benson
Director
25 November 2024
RGE SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of fire and electrical installation services.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S Black
(Resigned 25 May 2024)
S Craig
(Resigned 25 May 2024)
S Benson
R Fagan
(Appointed 6 March 2024)
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
S Benson
Director
25 November 2024
RGE SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
RGE SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF RGE SERVICES LIMITED
- 6 -
Opinion
We have audited the financial statements of RGE Services Limited (the 'company') for the year ended 30 June 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
RGE SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF RGE SERVICES LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
RGE SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF RGE SERVICES LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Attendance at the yearend stock take to assess the assumptions used by management to determine the estimated stock balance
Performance of substantive testing procedures over the stock balance estimate which is disclosed as a significant estimate involving management judgement.
Discussion with management about the potential for fraud within the stock purchase cycle and the risk of theft and obsolescence.
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 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.
RGE SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF RGE SERVICES LIMITED
- 9 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Alison Nayler BSc FCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
27 November 2024
2024-11-27
Chartered Accountants
Statutory Auditor
5 Yeomans Court
Ware Road
Hertford
Hertfordshire
United Kingdom
SG13 7HJ
RGE SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
31,351,908
20,580,249
Cost of sales
(18,231,592)
(11,357,983)
Gross profit
13,120,316
9,222,266
Administrative expenses
(8,236,704)
(5,490,304)
Other operating income
17,618
6,962
Operating profit
4
4,901,230
3,738,924
Interest receivable and similar income
6
63,367
13,439
Interest payable and similar expenses
7
(77,007)
(37,942)
Profit before taxation
4,887,590
3,714,421
Tax on profit
8
(1,056,895)
(688,649)
Profit for the financial year
3,830,695
3,025,772
RGE SERVICES LIMITED
BALANCE SHEET
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
2,344,972
1,805,300
Current assets
Stocks
10
1,372,685
919,148
Debtors
11
14,881,474
9,050,852
Cash at bank and in hand
2,523,836
1,516,220
18,777,995
11,486,220
Creditors: amounts falling due within one year
12
(8,653,397)
(4,706,064)
Net current assets
10,124,598
6,780,156
Total assets less current liabilities
12,469,570
8,585,456
Creditors: amounts falling due after more than one year
13
(1,206,518)
(1,036,663)
Deferred tax liability
15
(304,699)
(421,135)
Net assets
10,958,353
7,127,658
Capital and reserves
Called up share capital
17
800
800
Capital redemption reserve
200
200
Profit and loss reserves
10,957,353
7,126,658
Total equity
10,958,353
7,127,658
The financial statements were approved by the board of directors and authorised for issue on 25 November 2024 and are signed on its behalf by:
S Benson
Director
Company Registration No. 03305853
RGE SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 July 2022
800
200
4,100,886
4,101,886
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
3,025,772
3,025,772
Balance at 30 June 2023
800
200
7,126,658
7,127,658
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
-
3,830,695
3,830,695
Balance at 30 June 2024
800
200
10,957,353
10,958,353
The reserves are as follows:
• Called up share capital represents the nominal value of shares issued.
• Capital redemption reserve represents amounts transferred from share capital on the redemption of shares, maintaining the company's capital base.
• Profit and loss account represents the cumulative profits or losses, net of dividends paid.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 13 -
1
Accounting policies
Company information
RGE Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Nurseries, Gravel Lane, Chigwell, Essex, England, IG7 6BZ. .
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Bolton Topco Limited. These consolidated financial statements are available from its registered office at The Nurseries, Gravel Lane, Chigwell, Essex, IG7 6BZ
1.2
Going concern
The financial statements are prepared on a going concern basis. The use of the going concern basis of accounting is appropriate because there are no material uncertainties related to events or conditions that may cast significant doubt about the ability of the truegroup to continue as a going concern.
The directors have carried out an assessment of going concern and taking into account the economic conditions and possible changes in trading performance, alongside the facts noted above, there is a strong expectation that the group has adequate resources to continue in operational existence for a period of at least twelve months from when the financial statements are approved for issue.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
1.3
Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured at the fair value of the consideration received or receivable and represents the amount receivable for services rendered, net of returns, discounts and rebates allowed by the company and value added taxes.
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
Interest income is recognised using the effective interest rate method.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and equipment
20/50% straight line
Fixtures and fittings
10/25% straight line
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated replacement cost. Cost is comprised of parts and materials.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated replacement price is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 16 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
The company operates several defined contribution plans for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 18 -
1.13
Leases
At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.
Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.
Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined the company’s incremental borrowing rate is used. Incremental direct costs, incurred in negotiating and arranging the lease, are included in the cost of the asset.
Assets held under finance leases and hire purchase contracts are capitalised in the balance sheet and are depreciated over the shorter of the lease term and the asset's useful lives.
Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date.
The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate of charge on the balance of the capital repayments outstanding.
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The year end stock figure relies on a physical stock count as the company does not have a perpetual stock tracking system. Count coverage is targeted at being a sufficiently large sample to allow extrapolation of the result in an effective manner. The sample physically counted is in excess of eighty five percent of the stock value and quantity as at 30th June 2024. By its nature the extrapolation of the stock count contains estimates. The Directors consider the value to be materially accurate.
Accrued income contains a degree of estimation uncertainty. This is estimated based on work performed measured by time incurred, to the extent it is estimated to be capable of being monetised. Management use a multiple of labour costs incurred up to the date of the financial statements to calculate the estimate. The multiplier used is based on historic average revenue earned per operative over the average operative cost. This involves an element of judgement based on historic working relationship with customers. Most of the accrued income is subsequently invoiced post the period end cut off. To the extent that a customer query is identified a provision is made. Where no significant issues exist, amounts owed for work done have been fully accrued.
With the exception of the estimates described above, the directors consider that there are no other significant judgements or estimates in the preparation of these financial statements.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Fire and electrical services
31,351,908
20,580,249
All turnover was generated in the United Kingdom.
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
66,900
26,460
Depreciation of owned tangible fixed assets
753,237
470,709
Loss/(profit) on disposal of tangible fixed assets
26,712
(8,679)
Operating lease charges
70,000
60,000
5
Employees
The average monthly number of persons employed by the company during the year was:
2024
2023
Number
Number
Management
16
12
Office staff
34
24
Other staff
194
143
Total
244
179
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
8,679,910
4,804,551
Social security costs
950,867
610,405
Pension costs
160,435
89,227
9,791,212
7,111,265
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
63,367
13,439
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest payable
Hire purchase interest
77,007
30,422
Other interest
7,520
77,007
37,942
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,173,331
500,320
Deferred tax
Origination and reversal of timing differences
(116,436)
188,329
Total tax charge
1,056,895
688,649
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
4,887,590
3,714,421
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
1,221,898
928,605
Tax effect of expenses that are not deductible in determining taxable profit
71,224
8,085
Adjustments in respect of prior years
(54,286)
Effect of change in corporation tax rate
(122,292)
Group relief
(236,227)
(71,463)
Taxation charge for the year
1,056,895
688,649
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 21 -
9
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2023
17,052
213,197
2,523,312
2,753,561
Additions
82,032
96,112
1,166,377
1,344,521
Disposals
(9,552)
(23,200)
(26,165)
(58,917)
At 30 June 2024
89,532
286,109
3,663,524
4,039,165
Depreciation and impairment
At 1 July 2023
6,000
66,144
876,117
948,261
Depreciation charged in the year
19,360
32,203
701,674
753,237
Eliminated in respect of disposals
(796)
(6,509)
(7,305)
At 30 June 2024
24,564
98,347
1,571,282
1,694,193
Carrying amount
At 30 June 2024
64,968
187,762
2,092,242
2,344,972
At 30 June 2023
11,052
147,053
1,647,195
1,805,300
10
Stocks
2024
2023
£
£
Consumables
1,372,685
919,148
At balance sheet date, there is no stock provision (2023: £Nil).
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,905,845
4,262,476
Amounts owed by group undertakings
4,979,770
2,224,827
Other debtors
27,916
73,154
Prepayments and accrued income
4,967,943
2,490,395
14,881,474
9,050,852
Trade debtors is shown net after deducting bad debt provisions totalling £Nil (2023: £62,199).
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
14
737,387
458,165
Trade creditors
2,967,426
1,016,010
Amounts owed to group undertakings
1,475,290
1,475,290
Corporation tax
564,462
556,486
Other taxation and social security
957,326
808,760
Deferred income
867,303
Other creditors
839,078
189,947
Accruals
245,125
201,406
8,653,397
4,706,064
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
14
1,206,518
1,036,663
14
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
737,387
458,165
In two to five years
1,206,518
1,036,663
1,943,905
1,494,828
The finance lease obligations represent hire purchase liabilities for motor vehicles. All leases are on a fixed repayment basis and are secured against the related assets.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
304,699
421,135
2024
Movements in the year:
£
Liability at 1 July 2023
421,135
Credit to profit or loss
(116,436)
Liability at 30 June 2024
304,699
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
160,435
113,770
A defined contribution pension scheme is operated for all qualifying employees. At the balance sheet date, the company had unpaid defined contribution pension payable of £15,113 (2023: £4,859).
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
800
800
800
800
Ordinary share capital is entitled to full rights in the company, including voting, dividends, and distributions.
RGE SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
60,000
60,000
Between two and five years
45,000
105,000
105,000
165,000
Operating lease payments represent rentals payable by the company for a property. Leases are negotiated for an average term of 10 years.
19
Related party transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
20
Ultimate controlling party
The company's immediate parent company is RG Tradeco Limited.
RG Tradeco Limited is a wholly-owned subsidiary of Bolton Topco Limited. The company's ultimate parent undertaking is Pyr Topco Limited, a company incorporated and registered in England.
The registered offices of the ultimate and immediate parent undertaking is The Nurseries, Gravel Lane, Chigwell, Essex, England, IG7 6BZ
Bolton Topco Limited is the smallest group into which the company's financial statements are consolidated.
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