Company registration number 00208641 (England and Wales)
SPECIAL STEEL CO., LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
SPECIAL STEEL CO., LIMITED
COMPANY INFORMATION
Directors
A K Beardshaw
A C Beardshaw
B J Beardshaw
Secretary
A C Beardshaw
Company number
00208641
Registered office
Bacon Lane
Sheffield
S9 3NH
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
SPECIAL STEEL CO., LIMITED
CONTENTS
Page
Strategic report
1 - 5
Directors' report
6 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 11
Profit and loss account
12
Group statement of comprehensive income
13
Group balance sheet
14 - 15
Company balance sheet
16
Group statement of changes in equity
17
Company statement of changes in equity
18
Group statement of cash flows
19
Notes to the financial statements
20 - 39
SPECIAL STEEL CO., LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -

The directors present the strategic report for the year ended 31 May 2024.

 

Having reported record financial results for the preceding year, the Board again wrote an aggressive plan for all businesses for the 2023 / 24 fiscal period, with the consideration that the continuing geopolitical uncertainties and conflicts arising in previous years remain ongoing and baked into our market demand expectations for the critical products and services we supply.

The Board is pleased to report that all companies exceeded their targets in respect of both turnover and net profit.

Consequently, the Group remain in a strong financial position at the end of the year with shareholders’ funds up from £66.5m to £79.8m. Return on capital employed has changed from 41.8% to 31.8%. Return on capital employed is calculated as profit before tax divided by opening capital employed.

Special Quality Alloys Ltd (SQA), had another highly successful year, setting a new record for turnover. Having experienced strong demand during the last fiscal period, the management were well positioned on stock levels, manning, and production capacity to capitalise on the opportunities presented.

The company continues to focus on delivering technically challenging, high grade specialised nickel and stainless materials to customers in demanding markets where it can leverage its in house production capabilities and metallurgical knowledge to achieve critical end-product performance.

Whilst remaining a key supplier to the global energy sector, market diversification beyond oil & gas continued, and new approvals and orders were won in the defence sector.

However, profit margins came under pressure during the second half of the year as raw material costs increased and market demand from the energy sector eased off from the record highs. This ultimately impacted the company’s ability to match profit levels from the previous year, despite the record turnover.

Nevertheless, the Board remain optimistic that the company will continue its strong performance into the following year.

Special Steels Ltd (SSL) had another an excellent year, close to a record, with the subcontract heat treatment division performing particularly well and benefiting from the recent historical expenditure on plant maintenance, refurbishments, and upgrades. Whilst its turnover was similar to last year, profit levels increased with management demonstrating close control of operating costs. Focus continued on streamlining daily operations and improving data flow between departments through improved I.T. systems.

Once again, the stringent quality approvals held by the heat treatment division allowed it to capitalise on the higher demands from the aerospace and defence sectors.

Whilst the stockholding division experienced tougher market conditions in the downhole sector than the previous year, our diversified offerings of both subcontract heat treatment and full supply create higher financial resilience to fluctuations in demand for the various products and services it now provides. Both divisions continue to demonstrate their role in contributing to the profitability of the company over the longer term.

Finally, its low-cost service provider, VHT, continues to perform to plan.

 

 

SPECIAL STEEL CO., LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -

Having instigated a significant overhaul to its commercial direction in the previous year, Special Testing Ltd (STL), entered this new fiscal period with a robust performance plan and a high level of expectation.

To complement that change, the company had also benefited from ongoing investments in key testing and production equipment. Consequently, the Board are pleased to report that the company exceeded its plan and returned excellent results.

The company continues with a more proactive approach to sales & marketing to leverage its strong reputation and diversified approvals to gain market share.

In support of this expansion, the business has commissioned a new Laboratory Information Management System (LIMS) to meet and exceed the ever-increasing technicalities of this very specialised industry within which it operates.

Special Machined Products Ltd (SMP), continued into 2023/4 from where it left off last year, as the market demand for its products and services remain strong. The business plan reflected this, and the company exceeded its key fiscal goals. Turnover continued to increase, but the profitability ratio was impacted slightly as management worked hard to combat inflation across energy, wage, and consumable costs.

The Board continued to sanction new capital expenditure, and the company made strategic acquisitions into deep hole boring capabilities to service both external customers and internal Group companies. Recruitment and retention of the skilled workforce necessary to operate within the precision engineering sector remained challenging and management remained vigilant to the competitive environment from the region.

Whilst the intense demand for the Groups products and services calmed slightly from last year, the Board considers these results to be excellent and at the higher end of expectations.

Our clear strategy of continued capital investment in key manufacturing areas, coupled with a deep understanding of customer expectations on inventory range and volume allowed us to again deliver on our plans.

The business outlook remains positive. However, as always, any plans for future development of the businesses and longer-term financial performance may be subject to unforeseen global economic and political events outside of our control.

 

SPECIAL STEEL CO., LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
Section 172 statement

In accordance with section 172 of the Companies Act 2006, each of our directors acts in a way they consider, in good faith would promote the success of the Group for the benefit of its shareholders and stakeholders. The directors have taken into consideration, amongst other matters:

 

•    the likely consequences of any decisions in the long-term.

•    the interests of the Group’s employees.

•    the need to foster the Group’s business relationships with suppliers, customers, and others.

•    the impact of the Group’s operations in the community and environment.

•    the absolute need of the Group to maintain a reputation for high standards of business conduct; and

•    the need to act fairly between members of the Group.

 

One of the key aims for the introduction of this section 172 report is to provide better transparency for investors. However, in recognition of the fact that all of our shareholders are fully employed, operational directors, working within and throughout our various Group companies, we can state with a high degree of certainty that they are entirely informed and knowledgeable of all key matters in respect of the long-term success of the company and its subsidiaries.

All shareholders chair and attend all Board meetings, both at Group and subsidiary level, and consequently, all subsidiary operational directors have open dialogue with the shareholders. This access allows for well informed, and rapid decision making for investment funding to support directors in achieving their business objectives and aims. The shareholders take a prudent approach to financing and continue to avoid external debt funding wherever possible.

To support the obvious goal for the business to succeed in the long-term through profitable growth the board also believes that considering our stakeholders in key business decisions is fundamental to our ability to drive value creation. The Board seeks to understand the respective interests of such stakeholders through various methods, including direct engagement and the receiving of reports and updates from members of management who also engage with such groups. The directors consider the following to be the Group’s key stakeholders:

Employees

The strength of our business is built on the hard work and dedication of our employees.

Having successfully navigated the pandemic event, the company continues to invest and develop its health, safety, and environmental team across the Group. Consideration to workforce wellbeing, work-life balance, and fair remuneration have become more prevalent as the recruitment and retention challenge increases. We have qualified on-site Mental Health First Aid (MHFA) practitioners, and we have been adapting working hours and flexible working throughout the Group.

We continue to inform all employees on business performance and strategy through regular presentations and updates from the management team. However, our overriding goal remains the provision of secure employment along with the provision of personal development opportunities though supported educational programmes to encourage a ‘promote from within’ approach whenever possible.

 

SPECIAL STEEL CO., LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -

Customers

 

Whilst our employees are necessary to operate the companies, we cannot sustain our companies without customers. Consequently, the profitability, growth and long-term success of the business is underpinned by ensuring effective communication with customers to understand their needs and requirements. In recognition of this, a core principle of the business is to be customer-driven, building relationships, and engaging at all levels of seniority, providing high levels of service, and ensuring a quality product.

The Board receives regular customer feedback and wider market intelligence through multiple communication channels including personal visits and presentations. Many international customers provide regular score card reports covering critical performance KPI’s which are reviewed by directors and Board members. The insight received is used to inform decision making, understand customer needs and tailor our capital investments and stock profiles to maximise our performance.

To underpin our commitment to the provision of a quality service and product, all Group companies operate to a variety of internationally recognised standards including ISO 9001, PED / AD2000 Code, ISO 17025 and Nadcap, and these standards provide an external, independent vehicle to benchmark our daily quality performance.

Suppliers

 

Suppliers are important to the Group’s ongoing success and senior management is actively involved in both onsite and external supplier visits and engagements. The Board seeks to establish, maintain, and build strong relationships with world class suppliers that allow us to provide our technically challenging products and services. Consideration to a supplier’s product development and quality, including internationally recognised quality approvals and systems, technical capacity, on time delivery, robust financial strength and ethical behaviour being paramount. In return, and to the best extent possible, we actively operate a ‘pay on time’ philosophy which we consider to be a vital ingredient of the relationship building process, a practice not always prevalent within our specific market sector.

Communities (and environmental considerations)

The Board supports both internal and external (local government) initiatives with regards to reducing the adverse impacts on the environment of our operations. Consequently, the Board has initiated a significant and ongoing investment in renewable energy from solar across key sites. We are certified to the globally recognised environmental approval ISO 14001 throughout all of our UK businesses, and we were an early adopter of the standard back in 2002. In recognition of the newly introduced Sheffield Clean Air Zone for commercial vehicles, (our main base of operations), we immediately acted to replace our HGV fleet with newly complaint, EURO 6 vehicles. Additionally, we have a programme to transition to electrically powered handling equipment throughout the production departments to maximise the use of our solar power and minimise emissions from daily operations, clearly demonstrating our proactive approach to reducing our environmental impact when making equipment and infrastructure investments. Finally, we actively support local charities and healthcare providers and create opportunities to recruit and develop local people.

Government and regulations

As a business headquartered in the UK, we are subject to some of the most transparent and accountable financial reporting regulations anywhere in the world, and we ensure we comply with all current UK legislation. We also engage with the government and regulators through a range of industry forums included but not limited to, MAKE UK, the AMRC, The Contract Heat Treatment Association (CHTA), The Confederation of British Metalforming (CBM) and our Member of Parliament. The Board is updated on legal and regulatory developments and takes these into account when considering future actions to ensure compliance.

We operate the business with a defined Code of Conduct & Compliance Policy that all employees sign up to. Due to the nature of our work, we have several employees working within the guidelines (and signed acceptance of), the UK Official Secrets Act. We perform annual surveys of suppliers for compliance to Section 1502 of the United States (U.S.) Dodd-Frank Act in respect of companies needing to disclose their use of 3TG conflict minerals. We comply with all international legislation on tax & reporting for those other countries within which we operate, and finally we comply with all sanctions recently introduced by UK / EU Governments following the Ukraine / Russian conflict.

Overall, as a private, family owned and managed business, we consider family members’ long-term commitment, and intimate knowledge of its culture, vision and values provides for complete financial and operational transparency for investors, and a platform for sound decision making for the wider benefit of all stakeholders.

SPECIAL STEEL CO., LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 5 -

On behalf of the board

A K Beardshaw
Director
2 December 2024
SPECIAL STEEL CO., LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 6 -

The directors present their annual report and financial statements for the year ended 31 May 2024.

Principal activities

The principal activities of the group are those of hardening, tempering and annealing all types of steel, steel testing, machining, stockholding and forging of special quality alloys and general engineering steels.

Results and dividends

The results for the year are set out on page 12.

Dividends paid during the year are shown in note 12 to the accounts.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A K Beardshaw
A C Beardshaw
B J Beardshaw
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Auditor
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report

Special Quality Alloys Limited is the only entity within the group that is classified as large and therefore, the report on emissions energy consumption and energy efficiency activities is solely in relation to Special Quality Alloys Limited.

Energy consumption
kWh
Aggregate of energy consumption in the year
10,915,784
Emissions of CO2 equivalent
Metric tonnes
Metric tonnes
Scope 1 - direct emissions
- Gas combustion
1,538.29
1,538.29
Scope 2 - indirect emissions
- Electricity purchased
407.41
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
24.99
Total gross emissions
1,970.69
Intensity ratio
Tonnes CO2e per employee
62,548.89
SPECIAL STEEL CO., LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 7 -
Quantification and reporting methodology

The method used for the calculation of Greenhouse gas emissions (GHG) is the "UK Government GHG Conversion Factors for Company Reporting". This reporting document is suitable for UK-based organisations of all sizes for reporting on operations within the UK and is relevant to emissions reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in kg CO2e per £M turnover.

Measures taken to improve energy efficiency

Special Quality Alloys Limited recognises that climate change is one of the most serious problems facing the planet and that all businesses are responsible, where possible, for reducing their greenhouse gas emissions and being as energy efficient as possible.

 

Special Quality Alloys Limited during the reporting period has aimed to improve its energy efficiency through several initiatives. These have included:

 

 

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
A K Beardshaw
Director
2 December 2024
SPECIAL STEEL CO., LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 8 -

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SPECIAL STEEL CO., LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPECIAL STEEL CO., LIMITED
- 9 -
Opinion

We have audited the financial statements of Special Steel Co. Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The 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:

SPECIAL STEEL CO., LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPECIAL STEEL CO., LIMITED
- 10 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

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 parent 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 parent 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.

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:

SPECIAL STEEL CO., LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPECIAL STEEL CO., LIMITED
- 11 -

We assessed the susceptibility of the groups financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

To address the risk of fraud through management bias and override of controls, we:

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

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.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Lisa Leighton (Senior Statutory Auditor)
For and on behalf of BHP LLP
2 December 2024
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
SPECIAL STEEL CO., LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
2024
2023
Notes
£
£
Turnover
3
95,600,441
88,101,300
Cost of sales
(61,170,583)
(50,624,122)
Gross profit
34,429,858
37,477,178
Distribution costs
(183,277)
(110,370)
Administrative expenses
(13,205,646)
(11,727,059)
Other operating income
36,701
384,426
Operating profit
4
21,077,636
26,024,175
Interest receivable and similar income
8
536,424
208,194
Interest payable and similar expenses
9
(13,635)
(12,300)
Gain on Investment
10
93,105
-
Profit before taxation
21,693,530
26,220,069
Tax on profit
11
(5,519,443)
(5,376,251)
Profit for the financial year
16,174,087
20,843,818
Profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SPECIAL STEEL CO., LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
2024
2023
£
£
Profit for the year
16,174,087
20,843,818
Other comprehensive income
Revaluation of intangible assets
310,647
-
0
Currency translation loss taken to retained earnings
(155,424)
(124,111)
Other comprehensive income for the year
155,223
(124,111)
Total comprehensive income for the year
16,329,310
20,719,707
Total comprehensive income for the year is all attributable to the owners of the parent company.
SPECIAL STEEL CO., LIMITED
GROUP BALANCE SHEET
AS AT 31 MAY 2024
31 May 2024
- 14 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
13
938,864
1,215,927
Other intangible assets
13
592,576
281,929
Total intangible assets
1,531,440
1,497,856
Tangible assets
14
13,214,941
11,854,802
Investment property
15
438,211
438,211
Investments
16
139,210
46,105
15,323,802
13,836,974
Current assets
Stocks
18
40,438,335
33,511,660
Debtors
19
24,426,190
25,217,647
Cash at bank and in hand
26,922,207
14,228,111
91,786,732
72,957,418
Creditors: amounts falling due within one year
20
(25,286,095)
(18,601,729)
Net current assets
66,500,637
54,355,689
Total assets less current liabilities
81,824,439
68,192,663
Creditors: amounts falling due after more than one year
21
(105,854)
(63,780)
Provisions for liabilities
Provisions
23
662,017
688,700
Deferred tax liability
24
1,263,000
976,000
(1,925,017)
(1,664,700)
Net assets
79,793,568
66,464,183
Capital and reserves
Called up share capital
27
31,000
31,000
Revaluation reserve
392,576
81,929
Capital redemption reserve
30,000
30,000
Profit and loss reserves
79,339,992
66,321,254
Total equity
79,793,568
66,464,183
SPECIAL STEEL CO., LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2024
31 May 2024
- 15 -
The financial statements were approved by the board of directors and authorised for issue on 2 December 2024 and are signed on its behalf by:
02 December 2024
A K Beardshaw
Director
Company registration number 00208641 (England and Wales)
SPECIAL STEEL CO., LIMITED
COMPANY BALANCE SHEET
AS AT 31 MAY 2024
31 May 2024
- 16 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
13
592,576
281,929
Tangible assets
14
5,504,001
5,493,051
Investment property
15
438,211
438,211
Investments
16
8,698,574
8,605,469
15,233,362
14,818,660
Current assets
Debtors
19
1,406,263
1,177,500
Cash at bank and in hand
8,276,932
3,422,205
9,683,195
4,599,705
Creditors: amounts falling due within one year
20
(22,366,506)
(14,655,570)
Net current liabilities
(12,683,311)
(10,055,865)
Total assets less current liabilities
2,550,051
4,762,795
Creditors: amounts falling due after more than one year
21
(105,854)
(63,780)
Provisions for liabilities
Deferred tax liability
24
200,000
65,000
(200,000)
(65,000)
Net assets
2,244,197
4,634,015
Capital and reserves
Called up share capital
27
31,000
31,000
Revaluation reserve
392,576
81,929
Capital redemption reserve
30,000
30,000
Profit and loss reserves
1,790,621
4,491,086
Total equity
2,244,197
4,634,015

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £299,460 (2023 - £56,935 profit).

The financial statements were approved by the board of directors and authorised for issue on 2 December 2024 and are signed on its behalf by:
02 December 2024
A K Beardshaw
Director
Company registration number 00208641 (England and Wales)
SPECIAL STEEL CO., LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 June 2022
61,000
81,929
-
0
60,901,472
61,044,401
Year ended 31 May 2023:
Profit for the year
-
-
-
20,843,818
20,843,818
Other comprehensive income:
Currency translation differences
-
-
-
(124,111)
(124,111)
Total comprehensive income for the year
-
-
-
20,719,707
20,719,707
Dividends
12
-
-
-
(3,299,925)
(3,299,925)
Redemption of shares
27
-
-
30,000
-
30,000
Reduction of shares
27
(30,000)
-
-
-
(30,000)
Purchase of own shares
-
-
-
(12,000,000)
(12,000,000)
Balance at 31 May 2023
31,000
81,929
30,000
66,321,254
66,464,183
Year ended 31 May 2024:
Profit for the year
-
-
-
16,174,087
16,174,087
Other comprehensive income:
Revaluation of intangible assets
-
310,647
-
-
310,647
Currency translation differences
-
-
-
(155,424)
(155,424)
Total comprehensive income for the year
-
310,647
-
16,018,663
16,329,310
Dividends
12
-
-
-
(2,999,925)
(2,999,925)
Balance at 31 May 2024
31,000
392,576
30,000
79,339,992
79,793,568
SPECIAL STEEL CO., LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 June 2022
61,000
81,929
-
0
19,734,076
19,877,005
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
-
56,935
56,935
Dividends
12
-
-
-
(3,299,925)
(3,299,925)
Redemption of shares
27
-
-
30,000
-
30,000
Reduction of shares
27
(30,000)
-
-
-
(30,000)
Purchase of own shares
-
-
-
(12,000,000)
(12,000,000)
Balance at 31 May 2023
31,000
81,929
30,000
4,491,086
4,634,015
Year ended 31 May 2024:
Profit for the year
-
-
-
299,460
299,460
Other comprehensive income:
Revaluation of intangible assets
-
310,647
-
-
310,647
Total comprehensive income for the year
-
310,647
-
299,460
610,107
Dividends
12
-
-
-
(2,999,925)
(2,999,925)
Balance at 31 May 2024
31,000
392,576
30,000
1,790,621
2,244,197
SPECIAL STEEL CO., LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
21,898,980
11,533,253
Interest paid
(13,635)
(12,300)
Income taxes paid
(3,991,222)
(5,733,923)
Net cash inflow from operating activities
17,894,123
5,787,030
Investing activities
Purchase of tangible fixed assets
(2,881,078)
(1,313,199)
Proceeds from disposal of tangible fixed assets
161,551
78,499
Repayment of loans
-
283
Interest received
536,424
208,194
Net cash used in investing activities
(2,183,103)
(1,026,223)
Financing activities
Purchase of own shares
-
(12,000,000)
Payment of finance leases obligations
(16,999)
-
Dividends paid to equity shareholders
(2,999,925)
(3,299,925)
Net cash used in financing activities
(3,016,924)
(15,299,925)
Net increase/(decrease) in cash and cash equivalents
12,694,096
(10,539,118)
Cash and cash equivalents at beginning of year
14,228,111
24,767,229
Cash and cash equivalents at end of year
26,922,207
14,228,111
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
1
Accounting policies
Company information

Special Steel Co., Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Bacon Lane, Sheffield, S9 3NH.

 

The group consists of Special Steel Co., Limited and all of its subsidiaries.

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, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled.

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 21 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Special Steel Co. Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 May 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.4
Going concern

After assessing the principal risks and uncertainties surrounding the trading environment, the directors have adopted the going concern basis in preparing these accounts.

 

Throughout the forecasted period, the group continues to have significant liquidity headroom based upon the group's current cash balances.

 

The directors believe that the group is well placed to manage its financing and other business risk satisfactorily, and have a reasonable expectation that the group will have adequate resources to continue in operation for at least 12 months from the signing date of these financial statements. They therefore, consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life of 20 years and is amortised on a systematic basis over its expected life.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Intangible fixed assets other than goodwill

Intangible Cryptoassets are recognised at fair value.

 

Where changes in fair value are recognised, intangible Cryptoassets are revalued to this amount through the fair value reserve.

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 22 -
1.8
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:

Land and buildings Freehold
2% straight line
Land and buildings Leasehold
2% straight line
Plant and machinery
10% to 25% straight line
Fixtures, fittings & equipment
10% to 25% straight line
Computer equipment
10% to 25% straight line
Motor vehicles
20% to 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 recognised in the profit and loss account.

1.9
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

1.12
Stocks

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.

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 23 -

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.

1.13
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.

1.14
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

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.

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 group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies 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.

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 24 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group 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 group.

1.16
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 group’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.

1.17
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.18
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.

1.19
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 25 -
1.20
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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 leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.21
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.22
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

The accounts of the overseas subsidiary are translated into sterling at the rate of exchange ruling at the balance sheet date.  Exchange adjustments arising from the re-translation of the opening net investment are taken to reserves.
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 26 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Critical judgements
Useful economic lives of tangible fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values of all asset categories are reviewed on an annual basis to ensure appropriate charges are made for depreciation.

Stock provision

Stocks are stated at the lower of cost and net realisable value. The Directors will assess the requirement for any provision for obsolete stock or value deterioration based on historical transactions, stock utilisation patterns, regular inspection and counting of physical items.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Heat treatment
2,947,442
6,271,384
Testing alloys
1,627,884
1,988,958
Manufacture and supply of alloys
90,193,748
76,110,581
Steel engineering
831,367
3,730,378
95,600,441
88,101,301
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
41,304,331
37,603,132
Europe
22,650,460
17,785,479
Other markets
31,645,650
32,712,690
95,600,441
88,101,301
2024
2023
£
£
Other revenue
Interest income
536,424
208,194
Grants received
18,824
2,824
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
3
Turnover and other revenue
(Continued)
- 27 -

No further geographical split of sales is presented as in the opinion of the directors this would be prejudicial to the interests of the entity.

4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange gains
(927,621)
(1,078,051)
Government grants
(18,824)
(2,824)
Depreciation of owned tangible fixed assets
1,497,324
1,390,840
Profit on disposal of tangible fixed assets
(82,753)
(64,831)
Amortisation of intangible assets
277,063
277,063
Operating lease charges
165,786
428,202
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor:
£
£
For audit services
Audit of the financial statements of the group and company
16,917
5,106
Audit of the financial statements of the company's subsidiaries
54,250
58,061
71,167
63,167
For other services
Taxation compliance services
8,000
6,940
All other non-audit services
2,333
1,443
10,333
8,383
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Production
158
150
-
-
Admin
60
62
1
1
Directors
12
13
3
3
Total
230
225
4
4
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
6
Employees
(Continued)
- 28 -

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
13,672,802
12,169,356
4,434,000
3,262,977
Social security costs
1,472,405
1,304,028
594,325
445,838
Pension costs
352,445
311,659
-
0
-
0
15,497,652
13,785,044
5,028,325
3,708,815
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
3,402,960
2,264,424
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
1,169,748
966,839

Remuneration of key management personnel in the year is £4,651,451 (2023: £4,418,456)

8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
536,424
208,194
9
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
2,164
12,300
Other interest
11,471
-
Total finance costs
13,635
12,300
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 29 -
10
Changes in investments
2024
2023
£
£
Fair value gains/(losses) on financial instruments
Change in fair value of Investment
93,105
-
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
5,232,443
5,231,434
Adjustments in respect of prior periods
-
0
(6,183)
Total current tax
5,232,443
5,225,251
Deferred tax
Origination and reversal of timing differences
287,000
151,000
Total tax charge
5,519,443
5,376,251

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
21,693,530
26,220,069
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
5,423,383
5,244,014
Tax effect of expenses that are not deductible in determining taxable profit
73,008
23,061
Tax effect of income not taxable in determining taxable profit
(25,991)
(565)
Adjustments in respect of prior years
-
0
(6,183)
Effect of change in corporation tax rate
-
16,743
Amortisation on assets not qualifying for tax allowances
-
0
55,496
Effect of overseas tax rates
(204,369)
58,604
Foreign exchange differences
9,022
-
0
Fixed asset differences
124,069
(17,696)
Deferred tax not recognised
1,618
2,777
Chargeable gains and losses
118,703
-
Taxation charge
5,519,443
5,376,251
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 30 -
12
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Interim paid
2,999,925
3,299,925
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 31 -
13
Intangible fixed assets
Group
Goodwill
Cryptoassets
Total
£
£
£
Cost
At 1 June 2023
5,642,098
281,929
5,924,027
Revaluation
-
0
310,647
310,647
At 31 May 2024
5,642,098
592,576
6,234,674
Amortisation and impairment
At 1 June 2023
4,426,171
-
0
4,426,171
Amortisation charged for the year
277,063
-
0
277,063
At 31 May 2024
4,703,234
-
0
4,703,234
Carrying amount
At 31 May 2024
938,864
592,576
1,531,440
At 31 May 2023
1,215,927
281,929
1,497,856
Company
Cryptoassets
£
Cost
At 1 June 2023
281,929
Revaluation
310,647
At 31 May 2024
592,576
Amortisation and impairment
At 1 June 2023 and 31 May 2024
-
0
Carrying amount
At 31 May 2024
592,576
At 31 May 2023
281,929
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 32 -
14
Tangible fixed assets
Group
Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 June 2023
7,549,137
2,192,299
17,899,412
1,139,141
360,275
1,319,458
30,459,722
Additions
873,453
35,026
1,448,279
51,661
22,902
520,987
2,952,308
Disposals
-
0
-
0
(108,268)
-
0
-
0
(252,566)
(360,834)
Exchange adjustments
(16,294)
-
0
(20,871)
-
0
-
0
(6,396)
(43,561)
At 31 May 2024
8,406,296
2,227,325
19,218,552
1,190,802
383,177
1,581,483
33,007,635
Depreciation and impairment
At 1 June 2023
2,262,048
1,234,162
13,317,042
960,197
337,661
493,810
18,604,920
Depreciation charged in the year
165,540
135,628
745,086
77,168
9,157
364,745
1,497,324
Eliminated in respect of disposals
-
0
-
0
(29,470)
-
0
-
0
(252,566)
(282,036)
Exchange adjustments
(6,910)
-
0
(22,532)
-
0
-
0
1,928
(27,514)
At 31 May 2024
2,420,678
1,369,790
14,010,126
1,037,365
346,818
607,917
19,792,694
Carrying amount
At 31 May 2024
5,985,618
857,535
5,208,426
153,437
36,359
973,566
13,214,941
At 31 May 2023
5,287,089
958,137
4,582,370
178,944
22,614
825,648
11,854,802
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 33 -
Company
Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2023
6,944,896
887,152
13,217
74,960
7,920,225
Additions
-
0
-
0
-
0
198,548
198,548
At 31 May 2024
6,944,896
887,152
13,217
273,508
8,118,773
Depreciation and impairment
At 1 June 2023
2,005,826
340,979
13,217
67,152
2,427,174
Depreciation charged in the year
137,581
17,774
-
0
32,243
187,598
At 31 May 2024
2,143,407
358,753
13,217
99,395
2,614,772
Carrying amount
At 31 May 2024
4,801,489
528,399
-
0
174,113
5,504,001
At 31 May 2023
4,939,070
546,173
-
0
7,808
5,493,051
15
Investment property
Group
Company
2024
2024
£
£
Fair value
At 1 June 2023 and 31 May 2024
438,211
438,211

Investment property has been valued at fair value by the Directors.

 

16
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
17
-
0
-
0
8,600,107
8,600,107
Listed investments
139,210
46,105
98,467
5,362
139,210
46,105
8,698,574
8,605,469

 

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
16
Fixed asset investments
(Continued)
- 34 -
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 June 2023
46,105
Valuation changes
93,105
At 31 May 2024
139,210
Carrying amount
At 31 May 2024
139,210
At 31 May 2023
46,105
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 June 2023
8,600,107
5,362
8,605,469
Valuation changes
-
93,105
93,105
At 31 May 2024
8,600,107
98,467
8,698,574
Carrying amount
At 31 May 2024
8,600,107
98,467
8,698,574
At 31 May 2023
8,600,107
5,362
8,605,469
17
Subsidiaries

Details of the company's subsidiaries at 31 May 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Special Machined Products Limited
UK
Ordinary
100.00
-
Special Quality Alloys Inc
USA
Ordinary
-
100.00
Special Quality Alloys Limited
UK
Ordinary
100.00
-
Special Steels Limited
UK
Ordinary
100.00
-
Special Testing Limited
UK
Ordinary
100.00
-
Value Heat Treat Limited
UK
Ordinary
-
100.00
Sheffield Special Steels Limited
UK
Ordinary
50.00
-

Value Heat Treat Limited is exempt from audit under S479A Companies Act 2006.

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 35 -
18
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
47,798
86,260
-
-
Finished goods and goods for resale
40,390,537
33,425,400
-
0
-
0
40,438,335
33,511,660
-
-
19
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
21,390,179
21,195,980
-
0
-
0
Corporation tax recoverable
41,068
129,411
-
0
-
0
Other debtors
2,576,236
1,192,478
1,400,000
1,177,500
Prepayments and accrued income
418,707
2,699,778
6,263
-
0
24,426,190
25,217,647
1,406,263
1,177,500
20
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
22
9,333
-
0
9,333
-
0
Trade creditors
16,545,601
10,424,895
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
17,699,226
11,489,668
Corporation tax payable
1,282,407
129,529
48,757
5,064
Other taxation and social security
918,822
1,176,465
34,120
14,345
Other creditors
22,905
56,283
-
0
-
0
Accruals and deferred income
6,507,027
6,814,557
4,575,070
3,146,493
25,286,095
18,601,729
22,366,506
14,655,570

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

21
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
22
44,898
-
0
44,898
-
0
Government grants
25
60,956
63,780
60,956
63,780
105,854
63,780
105,854
63,780
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 36 -
22
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
9,333
-
0
9,333
-
0
In two to five years
44,898
-
0
44,898
-
0
54,231
-
54,231
-
23
Provisions for liabilities
Group
Company
2024
2023
2024
2023
£
£
£
£
Deferred tax liabilities
24
1,263,000
976,000
200,000
65,000
Other liabilities
662,017
688,700
-
-
1,925,017
1,664,700
200,000
65,000
Movements on provisions apart from deferred tax liabilities and retirement benefits:
Group
£
At 1 June 2023
724,398
Utilisation of provision
(23,701)
At 31 May 2024
662,017
24
Deferred taxation

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Group
£
£
ACAs
1,263,000
976,000
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
24
Deferred taxation
(Continued)
- 37 -
Liabilities
Liabilities
2024
2023
Company
£
£
ACAs
200,000
65,000
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 June 2023
976,000
65,000
Charge to profit or loss
287,000
135,000
Liability at 31 May 2024
1,263,000
200,000
25
Government grants
Group
Company
2024
2023
2024
2023
£
£
£
£
Arising from government grants
60,956
63,780
60,956
63,780
26
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
352,445
311,660

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

27
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
31,000
31,000
31,000
31,000

 

SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 38 -
28
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2024
2023
2024
2023
£
£
£
£
Acquisition of tangible fixed assets
10,000
905,192
-
-
29
Related party transactions

The group has taken advantage of the exemption provided by FRS 102 from the requirement to report transactions with other group companies that are 100% subsidiaries of Special Steel Co. Limited.

 

Special Steel Co. Limited received management charges of £24,000 (2023: £24,000) from S.T.W (Non-Destructive) Limited which is a company controlled by the directors.

 

Special Steel Co. Limited is owed £1,400,000 (2023: £1,100,000) by Jam Developers LLP, in which A K Beardshaw is a designated member.

 

Dividends paid to shareholders are outlined in note 12.

30
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
16,174,087
20,843,818
Adjustments for:
Taxation charged
5,519,443
5,376,251
Finance costs
13,635
12,300
Investment income
(536,424)
(208,194)
Gain on disposal of tangible fixed assets
(82,753)
(64,831)
Amortisation and impairment of intangible assets
277,063
277,063
Depreciation and impairment of tangible fixed assets
1,497,324
1,390,840
Foreign exchange gains on cash equivalents
(139,377)
(133,463)
Other gains and losses
(93,105)
-
Decrease in provisions
(26,683)
(11,997)
Movements in working capital:
Increase in stocks
(6,926,675)
(11,265,852)
Decrease/(increase) in debtors
703,114
(11,470,559)
Increase in creditors
5,522,155
6,790,701
Decrease in deferred income
(2,824)
(2,824)
Cash generated from operations
21,898,980
11,533,253
SPECIAL STEEL CO., LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 39 -
31
Analysis of changes in net funds - group
1 June 2023
Cash flows
New finance leases
31 May 2024
£
£
£
£
Cash at bank and in hand
14,228,111
12,694,096
-
26,922,207
Obligations under finance leases
-
16,999
(71,230)
(54,231)
14,228,111
12,711,095
(71,230)
26,867,976
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