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REGISTERED NUMBER: 02079614 (England and Wales)















Group Strategic Report, Report of the Directors and

Audited Consolidated Financial Statements for the Year Ended 31st May 2024

for

H.E. Group Ltd

H.E. Group Ltd (Registered number: 02079614)

Contents of the Consolidated Financial Statements
for the Year Ended 31st May 2024










Page

Company Information 1

Group Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 6

Consolidated Income Statement 10

Consolidated Other Comprehensive Income 11

Consolidated Balance Sheet 12

Company Balance Sheet 13

Consolidated Statement of Changes in Equity 14

Company Statement of Changes in Equity 15

Consolidated Cash Flow Statement 16

Notes to the Consolidated Cash Flow Statement 17

Notes to the Consolidated Financial Statements 18


H.E. Group Ltd

Company Information
for the Year Ended 31st May 2024







DIRECTORS: H R Edeleanu
P A Durey
C J Luscombe
B Walsh





REGISTERED OFFICE: Whitewall Centre
Whitewall Road
Strood
Rochester
Kent
ME2 4DZ





REGISTERED NUMBER: 02079614 (England and Wales)





AUDITORS: Beak Kemmenoe
Chartered Accountants
& Statutory Auditors
1-3 Manor Road
Chatham
Kent
ME4 6AE

H.E. Group Ltd (Registered number: 02079614)

Group Strategic Report
for the Year Ended 31st May 2024


The directors present their strategic report of the company and the group for the year ended 31st May 2024.

FAIR REVIEW OF THE BUSINESS
The group's hire revenues have reduced with a fall in turnover of 7.4% in the reporting period. The temporary reduction in activity within the construction industry was the main cause of this fall in turnover. Income from hiring our fleet of electric vehicles is a growth area where turnover has increased by 22%.

The sale of our second hand machines has generated a healthy profit on disposal of £3,275,626 (2023: £2,902,967), as discerning buyers from around the world continue to recognise that ex-hire plant from the H.E. fleet is maintained to the highest standards and amongst the best available. This shows no sign of abating and is an integral part of the H.E. Group Ltd business model.

We have continued to invest in our core fleet to ensure it is up to date and of the high quality customers rely on for their own success. We have invested £29,522,549 in new acquisitions and disposed of plant that originally cost £21,277,428. The work carried out to streamline the fleet to make it more responsive to demand has proved to be timely with more of the benefits being seen in the year. In a year with such significant investment, we were still able to improve the company's liquidity position by holding an additional £2.1m in bank reserves.

KEY PERFORMANCE INDICATORS
Management use a range of performance measures to monitor and manage the business. The KPIs used to determine the progress and performance are set out below:

Turnover

Turnover fell by 7.4% with £24,595,087 achieved in the reporting period.

Profit before tax

Profit before tax fell to £1,784,630 from £7,422,060 in the previous reporting period due to reduced activity within the construction industry. The company continued to make healthy profits on the sale of second hand plant.

Balance sheet

The balance sheet shows that the group's net assets at the reporting date have increased to £35,113,700 from £33,798,852.

Cash flow

The group saw a net cash inflow of £2,113,092 (2023: £1,776,446).

PRINCIPAL RISKS AND UNCERTAINTIES
The group operates in the construction industry, which is inherently uncertain and subject to several uncontrollable factors including: -

- Government policy and levels of public spending
- Economic conditions, interest rates in particular
- Investor and consumer confidence
- International pressures including conflicts

RISK MANAGEMENT
These principal risk factors are inextricably linked and while the outlook in the construction industry and the wider economy continues to be uncertain in a period of higher than usual inflation, we remain confident that our business can continue to be successfully managed through these challenging conditions. The group's success over the years is predicated on a business model that enables it to generate liquid funds quickly from the sale of second hand plant as and when required. This model has proven itself over the last three decades.


H.E. Group Ltd (Registered number: 02079614)

Group Strategic Report
for the Year Ended 31st May 2024

FUTURE DEVELOPMENTS
We continue to operate at the top end of the market and strive to meet our customers' requirements on the basis of quality and reliability. Our reputation for offering the most up to date hire fleet on the market remains integral to our business strategy. As we look to the spring of 2025 the group has strengthened it's management structure with internal promotion and recruitment and plans to continue it's growth to meet changing market conditions and the requirements of our growing customer base.

ON BEHALF OF THE BOARD:





H R Edeleanu - Director


29th November 2024

H.E. Group Ltd (Registered number: 02079614)

Report of the Directors
for the Year Ended 31st May 2024


The directors present their report with the financial statements of the company and the group for the year ended 31st May 2024.

PRINCIPAL ACTIVITY
The principal activity of the group in year under review was the hire of plant.

The group is made up of three trading companies H.E. Group Ltd, H.E. Services (Plant Hire) Ltd and Masterhitch Europe Limited. H.E. Group Ltd and H.E. Services (Plant Hire) Ltd hires plant and machinery, Masterhitch Europe Limited sells and manufactures excavator quick hitches, buckets and wearparts. The parent company has further subsidiaries, all of which are dormant.

DIVIDENDS
No dividends were distributed in the year ended 31st May 2024.

DIRECTORS
The directors shown below have held office during the whole of the period from 1st June 2023 to the date of this report.

H R Edeleanu
P A Durey
C J Luscombe
B Walsh

DISCLOSURE IN THE STRATEGIC REPORT
The directors have disclosed their review of the business, the key performance indicators, risk management policies, principal risks and uncertainties along with future developments in the Strategic Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

H.E. Group Ltd (Registered number: 02079614)

Report of the Directors
for the Year Ended 31st May 2024


AUDITORS
The auditors, Beak Kemmenoe, are deemed to be reappointed.

ON BEHALF OF THE BOARD:





H R Edeleanu - Director


29th November 2024

Report of the Independent Auditors to the Members of
H.E. Group Ltd


Opinion
We have audited the financial statements of H.E. Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31st May 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 group's and of the parent company affairs as at 31st May 2024 and of the group's 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.

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 the 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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
H.E. Group Ltd


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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' 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 Statement of Directors' Responsibilities set out on page four, 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 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 group's and 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Report of the Independent Auditors to the Members of
H.E. Group Ltd


Auditors' 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 a Report of the Auditors 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:

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 group through discussions with directors and other management, and from our commercial knowledge and experience of the business sector;

- 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 group, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and health and safety legislation;

- We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and

- Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

- Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

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

- Performed analytical procedures to identify any unusual or unexpected relationships;

-Tested journal entries to identify unusual transactions;

- 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; and

- Enquiring of management as to actual and potential litigation and claims;

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Report of the Independent Auditors to the Members of
H.E. Group Ltd


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 a Report of the Auditors 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.




Ronald Price FCA (Senior Statutory Auditor)
for and on behalf of Beak Kemmenoe
Chartered Accountants
& Statutory Auditors
1-3 Manor Road
Chatham
Kent
ME4 6AE

29th November 2024

H.E. Group Ltd (Registered number: 02079614)

Consolidated
Income Statement
for the Year Ended 31st May 2024

2024 2023
Notes £    £   

TURNOVER 3 24,595,087 26,559,583

Cost of sales 20,866,104 17,769,743
GROSS PROFIT 3,728,983 8,789,840

Administrative expenses 5,855,281 5,425,952
(2,126,298 ) 3,363,888

Other operating income 4 2,322,725 2,224,044
Profit on sale of fixed assets 3,275,626 2,902,967
OPERATING PROFIT 6 3,472,053 8,490,899

Interest receivable and similar income 8 253,999 68,704
3,726,052 8,559,603

Interest payable and similar expenses 9 1,941,422 1,137,543
PROFIT BEFORE TAXATION 1,784,630 7,422,060

Tax on profit 10 469,782 2,947,524
PROFIT FOR THE FINANCIAL YEAR 1,314,848 4,474,536
Profit attributable to:
Owners of the parent 1,314,848 4,474,536

H.E. Group Ltd (Registered number: 02079614)

Consolidated
Other Comprehensive Income
for the Year Ended 31st May 2024

2024 2023
Notes £    £   

PROFIT FOR THE YEAR 1,314,848 4,474,536


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

1,314,848

4,474,536

Total comprehensive income attributable to:
Owners of the parent 1,314,848 4,474,536

H.E. Group Ltd (Registered number: 02079614)

Consolidated Balance Sheet
31st May 2024

2024 2023
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 12 69,522,613 61,657,245
Investments 13 - -
Investment property 14 2,340,695 2,340,695
71,863,308 63,997,940

CURRENT ASSETS
Stocks 15 1,211,122 1,301,269
Debtors 16 4,420,779 4,627,653
Cash at bank and in hand 7,497,541 5,384,449
13,129,442 11,313,371
CREDITORS
Amounts falling due within one year 17 23,610,265 19,232,448
NET CURRENT LIABILITIES (10,480,823 ) (7,919,077 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

61,382,485

56,078,863

CREDITORS
Amounts falling due after more than one
year

18

(19,491,944

)

(15,854,466

)

PROVISIONS FOR LIABILITIES 23 (6,776,841 ) (6,425,545 )
NET ASSETS 35,113,700 33,798,852

CAPITAL AND RESERVES
Called up share capital 24 100 100
Retained earnings 35,113,600 33,798,752
SHAREHOLDERS' FUNDS 35,113,700 33,798,852

The financial statements were approved by the Board of Directors and authorised for issue on 29th November 2024 and were signed on its behalf by:





H R Edeleanu - Director


H.E. Group Ltd (Registered number: 02079614)

Company Balance Sheet
31st May 2024

2024 2023
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 12 69,425,983 61,543,583
Investments 13 25 25
Investment property 14 2,340,695 2,340,695
71,766,703 63,884,303

CURRENT ASSETS
Stocks 15 65,241 143,101
Debtors 16 1,877,701 4,185,357
Cash at bank and in hand 6,907,883 975,284
8,850,825 5,303,742
CREDITORS
Amounts falling due within one year 17 25,028,674 18,529,051
NET CURRENT LIABILITIES (16,177,849 ) (13,225,309 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

55,588,854

50,658,994

CREDITORS
Amounts falling due after more than one
year

18

(19,491,944

)

(15,854,466

)

PROVISIONS FOR LIABILITIES 23 (6,774,527 ) (6,458,027 )
NET ASSETS 29,322,383 28,346,501

CAPITAL AND RESERVES
Called up share capital 24 100 100
Retained earnings 29,322,283 28,346,401
SHAREHOLDERS' FUNDS 29,322,383 28,346,501

Company's profit for the financial year 975,882 4,402,871

The financial statements were approved by the Board of Directors and authorised for issue on 29th November 2024 and were signed on its behalf by:





H R Edeleanu - Director


H.E. Group Ltd (Registered number: 02079614)

Consolidated Statement of Changes in Equity
for the Year Ended 31st May 2024

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1st June 2022 100 29,324,216 29,324,316

Changes in equity
Total comprehensive income - 4,474,536 4,474,536
Balance at 31st May 2023 100 33,798,752 33,798,852

Changes in equity
Total comprehensive income - 1,314,848 1,314,848
Balance at 31st May 2024 100 35,113,600 35,113,700

H.E. Group Ltd (Registered number: 02079614)

Company Statement of Changes in Equity
for the Year Ended 31st May 2024

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1st June 2022 100 23,943,530 23,943,630

Changes in equity
Total comprehensive income - 4,402,871 4,402,871
Balance at 31st May 2023 100 28,346,401 28,346,501

Changes in equity
Total comprehensive income - 975,882 975,882
Balance at 31st May 2024 100 29,322,283 29,322,383

H.E. Group Ltd (Registered number: 02079614)

Consolidated Cash Flow Statement
for the Year Ended 31st May 2024

2024 2023
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 13,187,835 13,444,636
Tax paid (833,930 ) (508,207 )
Net cash from operating activities 12,353,905 12,936,429

Cash flows from investing activities
Purchase of tangible fixed assets (29,522,549 ) (21,454,367 )
Sale of tangible fixed assets 12,615,535 9,576,399
Interest received 253,999 68,704
Net cash from investing activities (16,653,015 ) (11,809,264 )

Cash flows from financing activities
Loan repayments in year (129,157 ) (954,339 )
Finance costs (1,941,422 ) (1,137,543 )
Movement on hire purchase contracts 8,482,781 2,741,163
Net cash from financing activities 6,412,202 649,281

Increase in cash and cash equivalents 2,113,092 1,776,446
Cash and cash equivalents at beginning of
year

2

5,384,449

3,608,003

Cash and cash equivalents at end of year 2 7,497,541 5,384,449

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 31st May 2024


1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS

2024 2023
£    £   
Profit before taxation 1,784,630 7,422,060
Depreciation charges 12,317,272 9,189,653
Profit on disposal of fixed assets (3,275,626 ) (2,902,967 )
Finance costs 1,941,422 1,137,543
Finance income (253,999 ) (68,704 )
12,513,699 14,777,585
Decrease/(increase) in stocks 90,147 (305,085 )
Decrease/(increase) in trade and other debtors 206,874 (10,020 )
Increase/(decrease) in trade and other creditors 377,115 (1,017,844 )
Cash generated from operations 13,187,835 13,444,636

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31st May 2024
31.5.24 1.6.23
£    £   
Cash and cash equivalents 7,497,541 5,384,449
Year ended 31st May 2023
31.5.23 1.6.22
£    £   
Cash and cash equivalents 5,384,449 3,608,003


3. ANALYSIS OF CHANGES IN NET DEBT

At 1.6.23 Cash flow At 31.5.24
£    £    £   
Net cash
Cash at bank and in hand 5,384,449 2,113,092 7,497,541
5,384,449 2,113,092 7,497,541
Debt
Finance leases (29,200,827 ) (8,482,781 ) (37,683,608 )
Debts falling due within 1 year (71,804 ) 71,804 -
Debts falling due after 1 year (457,353 ) 57,353 (400,000 )
(29,729,984 ) (8,353,624 ) (38,083,608 )
Total (24,345,535 ) (6,240,532 ) (30,586,067 )

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements
for the Year Ended 31st May 2024


1. STATUTORY INFORMATION

H.E. Group Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 May 2024.

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

The accounts of H.E. Services (Plant Hire) Ltd and Masterhitch Europe Limited have been consolidated using the merger method of accounting as the original group was formed from a reconstruction whereby the ultimate shareholding and control of each entity was not changed as a result.

Inter-company transactions, balances and unrealised gains on transactions between the parent company and its subsidiaries, which are related parties, are eliminated in full. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing the financial statements the directors have made the following judgements:

Determining the useful lives and depreciation policies for the group's various classes of tangible fixed assets. The directors base these estimates on past performance and industry trends to ensure that the depreciation policy used is sufficient so that the carrying value does not exceed its net realisable value.

Turnover
Turnover is measured at the fair value of the consideration received or receivable from the provision of goods and services, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets
Tangible fixed assets are stated in the balance sheet at cost less accumulated depreciation. The cost of tangible fixed assets includes directly attributable costs incurred in their acquisition and installation.

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


2. ACCOUNTING POLICIES - continued

Depreciation
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Land and buildings comprises predominantly of the group's freehold land and buildings at its Strood headquarters together with smaller sites at Castleford, Droitwich and Okehampton. Land is not depreciated, nor are freehold buildings on the basis that the estimated lives are deemed to be so long and the estimated residual values so high that any charge for depreciation would be considered trivial. Freehold property also includes some minor property improvements that are depreciated at 2% straight line per annum, which accounts for the small depreciation charge shown in the financial statements.

Plant and machinery comprises of electric vehicles and other plant. Electric vehicles are depreciated at 17.5% on a reducing balance basis. Other plant is depreciated at 17.5% on a reducing balance basis or 10% straight line.

Fixtures and fittings are depreciated at 25% on a reducing balance basis or between 10% and 15% on a straight line basis.

Motor vehicles are depreciated at 17.5% on a reducing balance basis.

An impairment review is carried out annually and full provision is made in the accounts for any impairment.

Investment property
The group's investment properties are included at fair value. Fair value gains and losses are recognised in the Income Statement. Deferred taxation is provided on these gains.

The directors consider that the fair value of the properties continues to be equal to the cost.

Stocks
Stocks are stated at the lower of cost and net realisable value. Cost is determined using a first-in, first-out method.

Stock of work in progress and finished goods are valued based on the cost of materials and a proportion of production overheads. The allocation of production overheads is based on the length of time stock items are worked on.

Stock items are regularly reviewed to determine if the net realisable value has fallen below the carrying amount.

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


2. ACCOUNTING POLICIES - continued

Financial instruments
Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument. 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.

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the balance sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debt instruments that comply with all of the conditions of paragraph 11.9 of FRS 102 are classified as 'basic'. For debt instruments that do not meet the conditions of FRS 102.11.9, the group considers whether the debt instrument is consistent with the principle in paragraph 11.9A of FRS 102 in order to determine whether it can be classified as basic. Instruments classified as 'basic' financial instruments are measured subsequently at amortised cost using the effective interest method. Debt instruments that have no stated interest rate (and do not constitute financing transaction) and are classified as payable or receivable within one year are initially measured at an undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

With the exception of some hedging instruments, other debt instruments not meeting conditions of being 'basic' financial instruments are measured at fair value through profit or loss.

Commitments to make and receive loans which meet the conditions mentioned above are measured at cost (which may be nil) less impairment.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the group transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the group, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


2. ACCOUNTING POLICIES - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Government grants
The company adopts the accrual model for accounting for government grants. Government grants in relation to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against on a straight line basis over the period of the lease.

3. TURNOVER

An analysis of turnover by class of business is given below:

2024 2023
£    £   
Sale of goods 180,397 220,154
Rendering of services 24,414,690 26,339,429
24,595,087 26,559,583

Turnover has not been analysed by geographical market since the markets in which the group operates are extremely competitive and the directors consider disclosure would seriously prejudice the group's trading in those areas.

4. OTHER OPERATING INCOME
2024 2023
£    £   
Rents receivable 2,036,802 1,913,009
Government grants 285,923 311,035
2,322,725 2,224,044

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


5. EMPLOYEES AND DIRECTORS
2024 2023
£    £   
Wages and salaries 6,753,672 6,485,359
Social security costs 537,024 576,714
Other pension costs 97,563 92,482
7,388,259 7,154,555

The average number of employees during the year was as follows:
2024 2023

Direct 149 134
Administration and support 81 84
Management 6 5
236 223

2024 2023
£    £   
Directors' remuneration 285,504 276,156
Directors' pension contributions to money purchase schemes 3,865 2,411

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 3 2

6. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2024 2023
£    £   
Depreciation - owned assets 12,317,272 9,189,653
Bad debts 371,415 120,774
Foreign exchange profits/(losses) (30,390 ) 21,362
Joint venture profits/(losses) 45,890 34,266
Profit on disposal of fixed assets 3,275,626 2,902,967
Operating lease payments 1,150,662 1,130,594

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


7. AUDITORS' REMUNERATION

The audit fee stated in the financial statements is made up of the following services

2024 2023
£ £
Fees payable to the company’s auditor for the audit of the
company’s annual accounts 12,500 16,300
Fees payable to the company’s auditor for other services:
Audit of the accounts of subsidiaries 11,750 11,100
Non-audit related services 4,604 6,600
28,854 34,000

8. INTEREST RECEIVABLE AND SIMILAR INCOME
2024 2023
£    £   
Finance income 253,999 68,704

9. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Bank loan interest payable 5,593 21,022
Other interest payable 148,410 104,214
Hire purchase interest 1,787,419 1,012,307
1,941,422 1,137,543

10. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2024 2023
£    £   
Current tax:
UK corporation tax 118,486 829,768

Deferred tax 351,296 2,117,756
Tax on profit 469,782 2,947,524

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


10. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2024 2023
£    £   
Profit before tax 1,784,630 7,422,060
Profit multiplied by the standard rate of corporation tax in the UK of 25 %
(2023 - 20 %)

446,158

1,484,412

Effects of:
Expenses not deductible for tax purposes 23,361 15,032
Capital allowances in excess of depreciation - (122,364 )
Depreciation in excess of capital allowances 408,347 -
Utilisation of tax losses (34,629 ) -
Profit on disposal (755,710 ) (580,593 )
Chargeable gains 30,959 5,578
Losses carried forward - 27,703
Deferred tax provision 351,296 2,117,756
Total tax charge 469,782 2,947,524

11. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.


H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


12. TANGIBLE FIXED ASSETS

Group
Fixtures
Land and Plant and and Motor
buildings machinery fittings vehicles Totals
£    £    £    £    £   
COST
At 1st June 2023 4,803,641 89,787,576 1,308,969 320,712 96,220,898
Additions - 29,472,774 49,775 - 29,522,549
Disposals - (21,219,904 ) (57,524 ) - (21,277,428 )
At 31st May 2024 4,803,641 98,040,446 1,301,220 320,712 104,466,019
DEPRECIATION
At 1st June 2023 88,635 33,250,413 940,544 284,061 34,563,653
Charge for year 1,113 12,236,077 73,760 6,322 12,317,272
Eliminated on disposal - (11,922,131 ) (15,388 ) - (11,937,519 )
At 31st May 2024 89,748 33,564,359 998,916 290,383 34,943,406
NET BOOK VALUE
At 31st May 2024 4,713,893 64,476,087 302,304 30,329 69,522,613
At 31st May 2023 4,715,006 56,537,163 368,425 36,651 61,657,245

ASSETS HELD UNDER FINANCE LEASES AND HIRE PURCHASE CONTRACTS

The net carrying amount of tangible assets include the following amounts in respect of assets held under finance leases and hire purchase contracts:

2024 2023
£    £   
Plant and machinery 44,524,277 37,489,857

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


12. TANGIBLE FIXED ASSETS - continued

Company
Fixtures
Land and Plant and and Motor
buildings machinery fittings vehicles Totals
£    £    £    £    £   
COST
At 1st June 2023 4,803,641 89,162,679 1,262,122 320,712 95,549,154
Additions - 29,472,454 41,402 - 29,513,856
Disposals - (21,219,904 ) (57,524 ) - (21,277,428 )
At 31st May 2024 4,803,641 97,415,229 1,246,000 320,712 103,785,582
DEPRECIATION
At 1st June 2023 88,635 32,737,501 895,374 284,061 34,005,571
Charge for year 1,113 12,210,904 73,208 6,322 12,291,547
Eliminated on disposal - (11,922,131 ) (15,388 ) - (11,937,519 )
At 31st May 2024 89,748 33,026,274 953,194 290,383 34,359,599
NET BOOK VALUE
At 31st May 2024 4,713,893 64,388,955 292,806 30,329 69,425,983
At 31st May 2023 4,715,006 56,425,178 366,748 36,651 61,543,583

ASSETS HELD UNDER FINANCE LEASES AND HIRE PURCHASE CONTRACTS

The net carrying amount of tangible assets include the following amounts in respect of assets held under finance leases and hire purchase contracts:

20242023
£   £   
Plant and machinery44,524,27737,489,857

13. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1st June 2023
and 31st May 2024 25
NET BOOK VALUE
At 31st May 2024 25
At 31st May 2023 25

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


13. FIXED ASSET INVESTMENTS - continued

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiaries

H. E. Services (Plant Hire) Ltd
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Plant Hire
%
Class of shares: holding
Ordinary shares 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves 5,072,843 4,947,000
Profit for the year 125,843 191,674

Masterhitch Europe Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Manufacture and augmentation of machinery
%
Class of shares: holding
Ordinary 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves 730,278 517,154
Profit/(loss) for the year 213,124 (120,010 )

Diggers Direct Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves 1 1

Diggerworld Limited
Registered office: 1 Garden Cottages, Court Lodge, Shorne, Gravesend, Kent, DA12 3EG
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.12.23 31.12.22
£    £   
Aggregate capital and reserves 1 1

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


13. FIXED ASSET INVESTMENTS - continued

H.E. Construction Services Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves (11,780 ) (11,780 )

H.E. Services Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves 1 1

Hy-Tools Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves 1 1

Diggerland Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.12.23 31.12.22
£    £   
Aggregate capital and reserves 1 1



H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


13. FIXED ASSET INVESTMENTS - continued

Buyadigger Limited
Registered office: Whitewall Centre, Whitewall Road, Medway City Estate, Rochester, England, ME2 4DZ
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00
31.5.24 31.5.23
£    £   
Aggregate capital and reserves 2 2


14. INVESTMENT PROPERTY

Group
Total
£   
FAIR VALUE
At 1st June 2023
and 31st May 2024 2,340,695
NET BOOK VALUE
At 31st May 2024 2,340,695
At 31st May 2023 2,340,695

Company
Total
£   
FAIR VALUE
At 1st June 2023
and 31st May 2024 2,340,695
NET BOOK VALUE
At 31st May 2024 2,340,695
At 31st May 2023 2,340,695

15. STOCKS

Group Company
2024 2023 2024 2023
£    £    £    £   
Raw materials 707,450 707,274 - -
Work-in-progress 137,850 115,579 - -
Finished goods 365,822 478,416 65,241 143,101
1,211,122 1,301,269 65,241 143,101

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


16. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2024 2023 2024 2023
£    £    £    £   
Trade debtors 3,785,793 3,782,876 856,151 664,178
Amounts owed by group undertakings - - - 2,236,565
Other debtors and prepayments 634,986 844,777 1,021,550 1,284,614
4,420,779 4,627,653 1,877,701 4,185,357

17. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2024 2023 2024 2023
£    £    £    £   
Bank loans and overdrafts (see note 19) - 71,804 - 71,804
Hire purchase contracts (see note 20) 18,591,664 13,803,714 18,591,664 13,803,714
Trade creditors 1,588,300 1,108,846 1,235,252 858,071
Amounts owed to group undertakings - - 2,203,717 -
Corporation tax 118,486 833,930 39,729 788,023
Social security and other taxes 156,063 138,162 42,937 35,938
Other creditors and accruals 3,155,752 3,275,992 2,915,375 2,971,501
23,610,265 19,232,448 25,028,674 18,529,051

18. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group Company
2024 2023 2024 2023
£    £    £    £   
Bank loans (see note 19) - 57,353 - 57,353
Preference shares (see note 19) 400,000 400,000 400,000 400,000
Hire purchase contracts (see note 20) 19,091,944 15,397,113 19,091,944 15,397,113
19,491,944 15,854,466 19,491,944 15,854,466

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


19. LOANS

An analysis of the maturity of loans is given below:

Group Company
2024 2023 2024 2023
£    £    £    £   
Amounts falling due within one year or on demand:
Bank loans - 71,804 - 71,804
Amounts falling due between one and two years:
Bank loans - 1-2 years - 57,353 - 57,353
Amounts falling due between two and five years:
Preference shares 400,000 400,000 400,000 400,000

Details of shares shown as liabilities are as follows:

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
400,000 Preference shares £1 400,000 400,000

Preference shares are non voting and not entitled to assets on a winding up in excess of their nominal value. Dividends are cumulative and paid at 7% of nominal value or based on a share of the profits. The shares must be redeemed by 15 November 2025, the company must give one month notice before redemption. The nominal value of preference shares is recognised as a financial liability. Preference share dividends are recognised as finance costs.

Preference share dividends have been accruing since 15 November 2005. There were accrued dividends of £440,126 at 31 May 2024 (2023 - £357,906). No dividends were paid in the reporting period (2023 - nil).

20. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Hire purchase contracts
2024 2023
£    £   
Net obligations repayable:
Within one year 18,591,664 13,803,714
Between one and five years 19,091,944 15,397,113
37,683,608 29,200,827

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


20. LEASING AGREEMENTS - continued

Company
Hire purchase contracts
2024 2023
£    £   
Net obligations repayable:
Within one year 18,591,664 13,803,714
Between one and five years 19,091,944 15,397,113
37,683,608 29,200,827

21. SECURED DEBTS

The following secured debts are included within creditors:

Group Company
2024 2023 2024 2023
£    £    £    £   
Bank loans - 129,157 - 129,157
Hire purchase contracts 37,683,608 29,200,827 37,683,608 29,200,827
37,683,608 29,329,984 37,683,608 29,329,984

Bank borrowings due to Shawbrook Bank Limited were repaid in the reporting period (2023 - £129,157). The terms of repayment were monthly instalments representing principal and interest at a fixed rate of 7.2%.

Obligations under hire purchase contracts are secured on the assets concerned.

22. OPERATING LEASES RECEIVABLE

The total future lease payments receivable are as follows:

2024 2023
£    £   
Within one year 1,122,774 1,256,388
Between one and five years 2,429,100 2,767,220
Later than five years 3,380,915 3,553,805
6,932,789 7,577,413

OPERATING LEASES PAYABLE

The total future lease payments are as follows:

2024 2023
£    £   
Within one year 980,569 943,526
Between one and five years 1,211,481 858,349
2,192,050 1,801,875

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


23. PROVISIONS FOR LIABILITIES

Group Company
2024 2023 2024 2023
£    £    £    £   
Deferred tax 6,776,841 6,425,545 6,774,527 6,458,027

Group
Deferred
tax
£   
Balance at 1st June 2023 6,425,545
Provided during the year 351,296
Balance at 31st May 2024 6,776,841

Company
Deferred
tax
£   
Balance at 1st June 2023 6,458,027
Provided during the year 316,500
Balance at 31st May 2024 6,774,527

24. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
100 Ordinary £1 100 100

Ordinary shares have full rights in respect of voting, entitlement to dividends and assets on a winding up.

H.E. Group Ltd (Registered number: 02079614)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31st May 2024


25. RELATED PARTY DISCLOSURES


The group had transactions with key management personnel as follows:

Related Party Transaction details 2024 2023
£ £
Key Management Personnel Sales 37,273 36,455
Indirect expenses 206,037 204,070
Other creditors 1,313,070 1,165,170

Other related parties with material transactions existed during the period. The nature of the relationship for each of them was that of shared individuals controlling the businesses and close family members of key management personnel.

Related Party Transaction details 2024 2023
£ £
Other related parties Sales 815,249 804,379
Indirect expenses 379,962 378,438
Other debtors 111,391 119,025
Other creditors 237,385 193,447

No amounts were written off in the year.


26. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is H R Edeleanu.