Company registration number 02012886 (England and Wales)
PORTICO SHIPPING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
PORTICO SHIPPING LIMITED
COMPANY INFORMATION
Directors
Mr S Williams
Mrs C Carlbom Flinn
Mr J Atkin
Mr R Lewis
Mr M Webb
Secretary
Mrs S Powell
Company number
02012886
Registered office
C/o Portsmouth City Council
Civic Offices
Guildhall Square
Portsmouth
Hampshire
PO1 2BG
Auditor
Fiander Tovell Limited
Stag Gates House
63/64 The Avenue
Southampton
Hampshire
SO17 1XS
Business address
Portico House
2 Prospect Road
Portsmouth
Hampshire
PO1 4QY
PORTICO SHIPPING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
PORTICO SHIPPING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present the strategic report and financial statements for the year ended 31 March 2024.
Review of the business
Turnover of £13.5m in 2023/24 was £1.7m lower than that in 2022/23, and the company made an operating profit of £788k, up on the £575k generated in 2022/23. Profit before tax was £195k (2022/23: £79k).
The directors of the business remain confident of the continued success and validity of the strategies that are being pursued for the business. These strategies remain the consolidation of the business core, founded in its term strength as a premier port for the importation of fresh produce, and exploiting its key assets of temperature controlled warehousing space, and its unrivalled geographic location with easy access to major transport routes enabling delivery to important London and Midlands markets within 2 - 4 hours of discharge.
The business continues in its pursuit of diversified cargo handling, utilising its skilled workforce and heavy lift capabilities. It’s cargo portfolio now includes containerisation, aggregates, agribulks, project cargoes and ad hoc general cargo in addition to fresh produce. Portico has also looked to diversify its business operation as a whole to include logistics services such as customs agency, freight forwarding, transport and third-party logistics. These diversifications have significantly de-risked Portico’s business model as well as ensure the sustainability of the business into the future.
Coupled to commercial developments, the business continues on an exciting and challenging period of redevelopment, improvements and investment in equipment and facilities aimed at supporting the commercial ambitions of the business. Whilst the directors appreciate that the physical limitations of the site will influence what can be achieved, there is a belief that changes to the layout of the site, additional land and building opportunities, new working practices, and increased automation can help to make the site more efficient, improving traffic flow and volume throughputs. Part of this initiative is to develop dedicated areas within the facility to keep as far as possible the diverse activities within their own dedicated areas, whilst retaining the operational flexibility required for a rapidly changing and developing business.
The message is being delivered to the Marine industry that Portsmouth International Port is very much open for business and as each capability is proven, market confidence grows in Portico's ability to deliver the services that each industry requires, which attracts further business.
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PORTICO SHIPPING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Principal risks and uncertainties
Quay operation revenue can be affected by weather, in particular by late arrival of ships as a result of poor weather conditions, as well as other factors beyond the company's control. Accordingly quay revenue can change suddenly whilst costs are largely fixed.
Treasury operations and financial Instruments
The company's principal financial instruments comprise cash, loans, trade debtors and trade creditors.
Liquidity risk
The company has maintained a positive cash position throughout the year and has no bank borrowing. The company has loans with its parent company Portsmouth City Council as disclosed in the financial statements which are being repaid in accordance with the relevant loan agreements.
Pricing risk
The directors consider that the company faces the usual pricing risk of any other company operating in a competitive, commercial environment.
Credit risk
The company's principal financial assets are cash and trade debtors. The credit risk associated with the cash is limited as the counterparties have reasonable credit ratings. Credit terms are only offered to credit-worthy customers.
Property risk
The company has appropriate insurance policies in place to cover many of the risks surrounding the property including damage, business interruption, employer's and public liability.
Key performance indicators
The key performance indicators for the business are considered by the directors to be as follows:
Debtor days: 79 (2023: 64)
Debts more than 90 days overdue: £111,000 (2023: £121,000)
Accident days lost: 75 (2023: 36).
Mr S Williams
Director
15 November 2024
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PORTICO SHIPPING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of stevedoring and the provision of shipping, warehousing and associated services, and UK road transport and distribution.
Results and dividends
The results for the year are set out on page 8.
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:
Mr S Williams
Cllr R G Vernon-Jackson
(Resigned 10 February 2024)
Mrs C Carlbom Flinn
Mr J Atkin
Mr S Bosher
(Resigned 1 November 2023)
Mr R Lewis
Mr M Webb
Auditor
The auditor, Fiander Tovell Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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.
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.
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PORTICO SHIPPING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Strategic Report
Where there is a choice between disclosing information in the Directors' Report or the Strategic Report under The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, the directors have decided to disclose some of these items in respect of the business review and the principal risks and uncertainties in the Strategic Report.
On behalf of the board
Mr S Williams
Mr M Webb
Director
Director
15 November 2024
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PORTICO SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PORTICO SHIPPING LIMITED
Opinion
- 5 -
We have audited the financial statements of Portico Shipping Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 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.
PORTICO SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PORTICO SHIPPING LIMITED
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
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, and from our commercial knowledge and experience.
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, such as the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation.
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management. The 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.
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PORTICO SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PORTICO SHIPPING LIMITED
Audit response to risks identified
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
tested a sample of BACS payments to identify payments being made to unexpected bank accounts;
performed transactional testing on payroll costs in respect of those employees with responsibility or authority in connection with the payroll function;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
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;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors, where available.
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.
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.
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.
Andrew Jay FCA FCCA
Senior Statutory Auditor
For and on behalf of Fiander Tovell Limited
21 November 2024
Chartered Accountants
Statutory Auditor
Stag Gates House
63/64 The Avenue
Southampton
Hampshire
SO17 1XS
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PORTICO SHIPPING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
2024
2023
Notes
£
£
Turnover
3
13,487,315
15,160,978
Cost of sales
(7,469,286)
(7,713,718)
Gross profit
6,018,029
7,447,260
Administrative expenses
(10,232,682)
(10,085,221)
Other operating income
5,002,531
3,212,999
Operating profit
4
787,878
575,038
Interest payable and similar expenses
7
(593,125)
(496,186)
Profit before taxation
194,753
78,852
Tax on profit
8
Profit for the financial year
194,753
78,852
Retained earnings brought forward
(14,061,301)
(14,140,153)
Retained earnings carried forward
(13,866,548)
(14,061,301)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
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PORTICO SHIPPING LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
15,173,247
14,679,332
Investments
10
3,100
3,100
15,176,347
14,682,432
Current assets
Stocks
12
46,129
57,108
Debtors
13
10,364,448
8,901,910
Cash at bank and in hand
1,705,857
1,563,258
12,116,434
10,522,276
Creditors: amounts falling due within one year
14
(7,325,803)
(5,838,625)
Net current assets
4,790,631
4,683,651
Total assets less current liabilities
19,966,978
19,366,083
Creditors: amounts falling due after more than one year
15
(14,531,317)
(14,125,175)
Net assets
5,435,661
5,240,908
Capital and reserves
Called up share capital
19
100
100
Share premium account
19,302,109
19,302,109
Profit and loss reserves
(13,866,548)
(14,061,301)
Total equity
5,435,661
5,240,908
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 15 November 2024 and are signed on its behalf by:
Mr S Williams
Mr M Webb
Director
Director
Company registration number 02012886 (England and Wales)
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PORTICO SHIPPING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
1,705,989
1,796,929
Interest paid
(593,125)
(496,186)
Net cash inflow from operating activities
1,112,864
1,300,743
Investing activities
Purchase of tangible fixed assets
(1,803,874)
(2,559,587)
Proceeds from disposal of tangible fixed assets
41,600
47,443
Net cash used in investing activities
(1,762,274)
(2,512,144)
Financing activities
Proceeds from borrowings
2,707,120
3,034,178
Repayment of borrowings
(1,915,111)
(1,593,860)
Net cash generated from financing activities
792,009
1,440,318
Net increase in cash and cash equivalents
142,599
228,917
Cash and cash equivalents at beginning of year
1,563,258
1,334,341
Cash and cash equivalents at end of year
1,705,857
1,563,258
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PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
Company information
Portico Shipping Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/o Portsmouth City Council, Civic Offices, Guildhall Square, Portsmouth, Hampshire, PO1 2BG.
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.
The financial statements present information about the company as an individual entity and not about its group. The company has not prepared consolidated accounts as its subsidiaries are immaterial both individually and collectively.
1.2
Going concern
The financial statements have been prepared on a going concern basis, which assumes that the company will continue to trade.
During the financial year the company had the support of its parent entity, Portsmouth City Council through the provision of finance.
The validity of the going concern basis is dependent upon the continued support from the providers of finance. The directors have a reasonable belief that funds will be available from the parent company for continued investment in the company. This is based on the parent resolution at the council, and also as a result of the trading results and projections, which in the opinion of the directors, supports the ongoing business case for the parent to continue to support the company. The directors continue to believe that the continued operation of the company provides the best available return to Portsmouth City Council as both freeholder and parent company. The financial statements do not include any adjustments that would result from a withdrawal of support by the providers of finance.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Turnover from the principal activity is made up of stevedoring and the provision of port and customs agency services which are recognised at the point when work is done, haulage which is recognised on the date of delivery and rental income which is recognised on a straight line basis during the period to which it relates.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Land is not depreciated. Buildings are depreciated over 20-40 years
Leasehold land and buildings
Over life of the lease
Plant and machinery
Over 3-10 years
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PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
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.
No depreciation is provided in respect of freehold land and buildings. The directors consider that the buildings are maintained to a sufficiently high standard such that the residual value results in any annual depreciation charge being immaterial. The directors undertake an annual impairment review to confirm there is no material impairment to freehold land and buildings.
Directors consider demolition costs to be directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended. These costs are therefore included in additions in the period to which they relate.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
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.
1.7
Stocks
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Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Cost is calculated using the FIFO method.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
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PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants are accounted for on an accruals basis. In the case of revenue grants, the income is credited to the government grants deferred income account and released to the appropriate revenue account in the period to which the grant relates. Income from capital grants is credited to the government grants deferred income account and written off to revenue over the life of the asset to which the grant relates.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
- 15 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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.
Key sources of estimation uncertainty
Bad debt provision
In determining the value of the bad debt provision, an estimation of the likely recoverability of debts was required.
The directors utilised all available information to make their best estimate of the likely recoverability and the provision is estimated at £362,864 (2023: £380,880).
Legal Disputes
In determining the potential value of amounts still receivable from customers with ongoing legal disputes, directors had to estimate the likely chance of recovery.
The directors utilised all available information to make their best estimate of the likely amounts and have included these as appropriate within the bad debt provision or accrued income.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Rendering of services
13,052,584
14,867,371
Rent receivable
434,731
293,607
13,487,315
15,160,978
2024
2023
£
£
Other revenue
Grants received
5,000,000
3,212,999
Other income
2,531
-
- 16 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
536
7,317
Government grants
(5,000,000)
(3,212,999)
Fees payable to the company's auditor for the audit of the company's financial statements
18,750
28,000
Depreciation of owned tangible fixed assets
1,286,247
1,361,381
(Profit)/loss on disposal of tangible fixed assets
(17,888)
59,564
Operating lease charges
2,366,049
2,344,060
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Office and management
92
101
Operations
83
89
Total
175
190
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
6,789,004
6,909,819
Social security costs
683,020
748,093
Pension costs
303,226
296,461
7,775,250
7,954,373
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
197,267
182,547
Company pension contributions to defined contribution schemes
8,813
8,357
206,080
190,904
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
- 17 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
6
Directors' remuneration
(Continued)
Some of the directors do not receive any remuneration from the company as their services are incidental to their responsibilities to the parent company, and therefore they are remunerated by the parent entity, Portsmouth City Council.
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
593,125
496,186
8
Taxation
2024
2023
£
£
Total tax charge
From 1 April 2023, the rate of corporation tax has increased from 19% to 25%.
In line with the previous year the deferred tax has been measured at 25% at the reporting date.
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
194,753
78,852
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
48,688
14,982
Tax effect of expenses that are not deductible in determining taxable profit
11,274
4,659
Change in unrecognised deferred tax assets
(98,077)
14,860
Permanent capital allowances in excess of depreciation
(59,896)
Depreciation on assets not qualifying for tax allowances
38,115
28,961
Difference between corporation and deferred tax rates
(3,566)
Tax expense for the year
-
-
The company has estimated losses of £11,424,484 (2023 - £11,493,088) available for carry forward against future trading profits.
- 18 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and machinery
Total
£
£
£
£
Cost
At 1 April 2023
399,401
31,685,235
11,213,065
43,297,701
Additions
1,446,621
357,253
1,803,874
Disposals
(1,104,283)
(1,104,283)
Transfers
1,631,525
(1,631,525)
At 31 March 2024
399,401
34,763,381
8,834,510
43,997,292
Depreciation and impairment
At 1 April 2023
30,363
21,806,061
6,781,945
28,618,369
Depreciation charged in the year
5,545
520,123
760,579
1,286,247
Eliminated in respect of disposals
(1,080,571)
(1,080,571)
Transfers
1,487,301
(1,487,301)
At 31 March 2024
35,908
23,813,485
4,974,652
28,824,045
Carrying amount
At 31 March 2024
363,493
10,949,896
3,859,858
15,173,247
At 31 March 2023
369,038
9,879,174
4,431,120
14,679,332
10
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
11
3,100
3,100
11
Subsidiaries
Details of the company's subsidiaries at 31 March 2024 are as follows:
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Mainland Market Deliveries Limited
1
Dormant
Ordinary shares
100.00
MMD Garage Services Limited
1
Dormant
Ordinary shares
100.00
Registered office addresses (all UK unless otherwise indicated):
1
Civic Offices, Guildhall Square, Portsmouth, PO1 2BG
- 19 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
46,129
57,108
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,937,062
2,647,702
Amounts owed by group undertakings
6,500,000
5,600,000
Other debtors
242,904
244,872
Prepayments and accrued income
684,482
409,336
10,364,448
8,901,910
As at 31 March 2024 there was an unprovided deferred tax asset of £2,092,390 (2023 - £2,190,468). The asset was not recognised given uncertainty over future taxable profits.
Impairment losses of £14,357 (2023: £167,932) have been recognised on debtors.
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Other borrowings
16
2,199,990
1,912,925
Trade creditors
1,668,831
1,504,784
Taxation and social security
161,310
169,435
Government grants
17
1,000,000
Other creditors
1,901,318
1,525,473
Accruals and deferred income
394,354
726,008
7,325,803
5,838,625
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other borrowings
16
14,531,317
14,026,373
Other creditors
98,802
14,531,317
14,125,175
Amounts included above which fall due after five years are as follows:
Payable by instalments
6,561,575
6,849,420
- 20 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
16
Loans and overdrafts
2024
2023
£
£
Loans from group undertakings
16,731,307
15,939,298
Payable within one year
2,199,990
1,912,925
Payable after one year
14,531,317
14,026,373
The long-term loans are secured by way of a first charge over the assets of the company.
There are fourteen loans from the parent entity, Portsmouth City Council, all repayable in monthly instalments.
Loan 1 - Interest charged at 4.81%, repayable until April 2029
Loan 2 - Interest charged at 4.80%, repayable until March 2030
Loan 3 - Interest charged at 4.81%, repayable until March 2031
Loan 4 - Interest charged at 4.81%, repayable until March 2032
Loan 5 - Interest charged at 3.70%, repayable until March 2025
Loan 6 - Interest charged at 3.70%, repayable until March 2026
Loan 7 - Interest charged at 3.31%, repayable until May 2028
Loan 8 - Interest charged at 3.45%, repayable until March 2029
Loan 9 - Interest charged at 3.14%, repayable until March 2030
Loan 10 - Interest charged at 3.09%, repayable until March 2031
Loan 11 - Interest charged at 3.78%, repayable until March 2038
Loan 12 - Interest charged at 3.38%, repayable until February 2032
Loan 13 - Interest charged at 3.42%, repayable until March 2033
Loan 14 - Interest charged at 4.90%, repayable until March 2034
17
Government grants
2024
2023
£
£
Arising from government grants
1,000,000
-
During the year, government grant income of £5,000,000 (2023 - £3,200,000) was recognised in relation to revenue grants receivable. Revenue of £nil (2023 - £12,999) was recognised in relation to the release of capital grants during the year.
There is deferred government grant income carried forward of £1,000,000 (2023 - £nil).
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
303,226
296,461
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
- 21 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
18
Retirement benefit schemes
(Continued)
A balance of £43,750 (2023 - £42,916) was payable at the year end.
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
The company has one class of ordinary shares which carry no right to fixed income.
20
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for the property from which it operates, as well as rentals for items of plant and machinery.
Property leases are negotiated for terms of between 5 and 34 years and rentals are fixed for between 5 and 15 years in most cases. Other leases are negotiated for terms of between 3 and 8 years with rentals fixed for the term of the lease.
Amounts recognised in profit or loss as an expense during the period in respect of operating lease arrangements are as follows:
2024
2023
£
£
Minimum lease payments under operating leases
2,366,049
2,344,060
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
1,474,890
2,149,041
Between two and five years
4,869,621
5,049,953
In over five years
6,691,883
7,956,814
13,036,394
15,155,808
The company entered into a tenancy at will agreement on the 30th May 2023. As there is no termination date included, this has not been disclosed in the above commitment. There is annual rent due of £41,059 on this agreement.
21
Financial commitments, guarantees and contingent liabilities
The bank hold guarantees in favour of HM Revenue and Customs for £680,000 (2023 - £680,000).
- 22 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
68,659
1,259,299
Acquisition of intangible assets
-
11,400
68,659
1,270,699
23
Related party transactions
Remuneration of key management personnel
There are not considered to be any key management personnel other than the directors.
Four directors (2023 - four) receive remuneration from the company, whilst the remaining directors' emoluments are borne by the parent entity, Portsmouth City Council.
Related party transactions with group companies
The company has taken advantage of the exemption available in FRS 102 paragraph 33.11 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
24
Ultimate controlling party
The company is controlled by Portsmouth City Council who own 100% of the issued share capital.
The smallest and largest group into which the entity is consolidated, is the consolidated financial statements of Portsmouth City Council which can be found on their website. The principle address for the ultimate controlling party is Civic Offices, Guildhall Square, Portsmouth, PO1 2AR.
- 23 -
PORTICO SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
25
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
194,753
78,852
Adjustments for:
Finance costs
593,125
496,186
(Gain)/loss on disposal of tangible fixed assets
(17,888)
59,564
Depreciation and impairment of tangible fixed assets
1,286,247
1,361,381
Decrease in provisions
(215,802)
Movements in working capital:
Decrease in stocks
10,979
6,406
Increase in debtors
(1,462,538)
(1,893,597)
Increase in creditors
101,311
1,916,938
Increase/(decrease) in deferred income
1,000,000
(12,999)
Cash generated from operations
1,705,989
1,796,929
26
Analysis of changes in net debt
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
1,563,258
142,599
1,705,857
Borrowings excluding overdrafts
(15,939,298)
(792,009)
(16,731,307)
(14,376,040)
(649,410)
(15,025,450)
- 24 -
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