Company registration number 11729518 (England and Wales)
POTTER RAPER LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
POTTER RAPER LTD
COMPANY INFORMATION
Directors
Mr P Denny
Mr R Humphrey
Mr J Parker
Mr D Spiller
Ms N Tilbury
Mr A Baker
Company number
11729518
Registered office
Duncan House
Burnhill Road
Beckenham
Kent
BR3 3LA
Auditor
Perrys Audit Limited
Chartered Accountants
4th Floor
399-401 Strand
London
United Kingdom
WC2R 0LT
POTTER RAPER LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
Independent auditor's report
23 - 25
POTTER RAPER LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -
The directors present the strategic report for the year ended 30 April 2024.
Review of the business
Potter Raper has been in existence and trading since 1970. In 2018, the trade was incorporated into Potter Raper Limited. The financial statements for the year ended 30 April 2024 represent the sixth period in this entity.
Overall, turnover for the business has decreased from £19.7m in the period to 30 April 2023 to £17.0m for the year ended 30 April 2024. Operating profit margins have decreased from the previous year to 0.4% (2023: 8%). During the year, certain projects were paused which contributed to these decreases. This was as a result of the uncertainty surrounding the change in government and high interest rates as generally less capital was invested in property to take advantage of the savings interest rates.
The company chose to retain their employees during this time as it is anticipated turnover will increase in the next accounting period.
The company continues to provide nine core services: project management; quantity surveying; employer’s agent; building surveying; joint venture management; health, safety & environmental (including the Principal Designer role), fund/bank monitoring services, clerk of works; and laser scanning and CAD services.
The company is made up of a diverse team, guided by experience, leading and investing in young people and it is committed to developing the careers of all employees.
On 1 May 2022, the shareholders transferred their shares to an employee ownership trust, PRL Trustee Limited, so that the company is now owned by its employees.
POTTER RAPER LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
Principal risks and uncertainties
The principal risks are the continuing economic conditions and the competitive market that the company operates in. The directors are confident that with its standing, level of service and history the Company is well placed to continue achieving strong results.
The impact of the departure of the UK from the EU remains to be seen for the company and the economy generally. As in the previous year, the company has not noticed any significant changes in demand for their services or any significant increases in their costs in relation to Brexit.
Predictions regarding an economic downturn in the UK and the recent, ongoing high interest rates and change in Government will likely have an impact on the company’s position and resources in the coming year.
The directors consider that the company is in a strong position to deal with the above and has the structure to take any necessary decisions quickly to protect itself, the workforce and clients.
Exposure to liquidity, credit, price and cashflow risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company aims to mitigate liquidity risk by managing cash generation by its operations and by applying consistent procedures for collecting debtors as they fall due.
Cashflow risk is the risk of exposure to variability in cashflows that is attributable to a particular risk associated with a recognised asset or liability, such as future interest payments on a variable rate debt. The company manages this risk by ensuring that there are sufficient ongoing cash reserves to meet obligations.
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The key credit risk is potential non payment by a customer. However, historically bad debts have been low and the company will continue to maintain its strict internal controls to minimise such risk.
Development and Performance
Our success is built upon the trust of our clients, upon long-term working relationships and the certainty of repeat business. We prioritise the quality of our service delivery over short term commercial gains; we do “whatever it takes” for each and every job and we aspire to be the best in everything we do.
Ours is a modernising business in an industry which demands this. We are a diverse team, guided by experience, leading and investing in young people, committed to developing the careers of all who work for us.
We believe in sharing our knowledge and experience with our peers and clients to the benefit of both ourselves and the industry as a whole.
It is this ethos on which we have built a successful, trusted and respected company and on which we will continue to build for the years to come.
POTTER RAPER LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
Key performance indicators
2024 2023 2022
Turnover £17.0m £19.7m £18.7m
Operating profit £0.1m £1.6m £4.9m
Operating profit margin 0.4% 8.0% 26.5%
Shareholders funds £3.6m £5.2m £5.5m
Mr D Spiller
Director
10 December 2024
POTTER RAPER LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 4 -
The directors present their annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company in the year under review was that of construction consultancy services.
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Daniels
(Resigned 30 April 2024)
Mr P Denny
Mr R Humphrey
Mr J Parker
Mr G Potter
(Resigned 30 September 2024)
Mr D Spiller
Ms N Tilbury
Mr A Baker
Auditor
Perrys Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr D Spiller
Director
10 December 2024
POTTER RAPER LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2024
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
POTTER RAPER LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2024
- 6 -
2024
2023
Notes
£
£
Turnover
3
17,010,301
19,729,363
Cost of sales
(247,036)
(405,451)
Gross profit
16,763,265
19,323,912
Administrative expenses
(16,709,068)
(17,746,926)
Other operating income
12,511
8,557
Operating profit
4
66,708
1,585,543
Interest receivable and similar income
7
9,506
8,140
Interest payable and similar expenses
8
(42,431)
(58,849)
Profit before taxation
33,783
1,534,834
Tax on profit
9
(247,873)
(377,919)
(Loss)/profit for the financial year
(214,090)
1,156,915
The profit and loss account has been prepared on the basis that all operations are continuing operations.
POTTER RAPER LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 7 -
2024
2023
£
£
(Loss)/profit for the year
(214,090)
1,156,915
Other comprehensive income
-
-
Total comprehensive income for the year
(214,090)
1,156,915
POTTER RAPER LTD (REGISTERED NUMBER: 11729518)
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
3,000,002
3,600,002
Tangible assets
12
379,409
490,499
3,379,411
4,090,501
Current assets
Stocks
13
469,570
714,034
Debtors
14
2,771,384
3,702,728
Cash at bank and in hand
32,579
1,224,733
3,273,533
5,641,495
Creditors: amounts falling due within one year
15
(2,849,316)
(3,914,539)
Net current assets
424,217
1,726,956
Total assets less current liabilities
3,803,628
5,817,457
Creditors: amounts falling due after more than one year
16
(149,019)
(476,556)
Provisions for liabilities
Deferred tax liability
18
88,059
122,625
(88,059)
(122,625)
Net assets
3,566,550
5,218,276
Capital and reserves
Called up share capital
20
1,000
1,000
Profit and loss reserves
3,565,550
5,217,276
Total equity
3,566,550
5,218,276
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 10 December 2024 and are signed on its behalf by:
Mr D Spiller
Director
POTTER RAPER LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2022
1,000
5,477,424
5,478,424
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
1,156,915
1,156,915
Contributions
10
-
(1,417,063)
(1,417,063)
Balance at 30 April 2023
1,000
5,217,276
5,218,276
Year ended 30 April 2024:
Loss and total comprehensive income for the year
-
(214,090)
(214,090)
Contributions
25
-
(1,437,636)
(1,437,636)
Balance at 30 April 2024
1,000
3,565,550
3,566,550
POTTER RAPER LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,151,312
2,185,627
Interest paid
(42,431)
(58,849)
Income taxes paid
(398,889)
(931,951)
Net cash inflow from operating activities
709,992
1,194,827
Investing activities
Purchase of tangible fixed assets
(74,016)
(154,854)
Interest received
9,506
8,140
Net cash used in investing activities
(64,510)
(146,714)
Financing activities
Repayment of bank loans
(400,000)
(1,000,000)
Contributions paid
(1,437,636)
(1,417,063)
Net cash used in financing activities
(1,837,636)
(2,417,063)
Net decrease in cash and cash equivalents
(1,192,154)
(1,368,950)
Cash and cash equivalents at beginning of year
1,224,733
2,593,683
Cash and cash equivalents at end of year
32,579
1,224,733
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 11 -
1
Accounting policies
Company information
Potter Raper Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Duncan House, Burnhill Road, Beckenham, Kent, BR3 3LA.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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 and is amortised on a systematic basis over its expected life, which is 10 years.
1.5
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:
Fixtures and fittings
15% straight line
Computers
20% straight line
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 12 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Stocks
Work in progress is based on the directors' assessments of any estimated unbilled works at the end of the year.
1.7
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.8
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.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
1.10
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:
Work In Progress
Work In Progress is based on directors' assessments of any estimated unbilled works at the end of a period.
Depreciation
Depreciation is provided for at the rates shown above in note 1.5.
Amortisation
Amortisation is provided for over the estimated useful life of 10 years.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction consultancy services
17,010,301
19,729,363
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
3
Turnover and other revenue
(Continued)
- 14 -
2024
2023
£
£
Other revenue
Interest income
9,506
8,140
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
8,310
7,915
Depreciation of owned tangible fixed assets
185,106
162,344
Amortisation of intangible assets
600,000
600,000
Operating lease charges
426,151
432,557
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
8
10
Employees
178
179
Total
186
189
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
11,224,786
11,834,725
Social security costs
1,098,063
1,380,330
Pension costs
288,249
276,916
12,611,098
13,491,971
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 15 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
1,013,207
1,593,094
Company pension contributions to defined contribution schemes
41,717
55,838
1,054,924
1,648,932
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
206,500
255,986
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
9,506
6,736
Other interest income
1,404
Total income
9,506
8,140
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
9,506
6,736
8
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
42,431
58,849
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 16 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
282,439
512,670
Adjustments in respect of prior periods
(132,878)
Total current tax
282,439
379,792
Deferred tax
Origination and reversal of timing differences
(34,566)
(1,873)
Total tax charge
247,873
377,919
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
33,783
1,534,834
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
8,446
291,618
Tax effect of expenses that are not deductible in determining taxable profit
25,085
97,922
Adjustments in respect of prior years
(132,878)
Permanent capital allowances in excess of depreciation
35,002
(3,840)
Amortisation on assets not qualifying for tax allowances
150,000
114,000
Tax at marginal rate
12,970
Deferred tax movement
(34,566)
(1,873)
Remuneration paid after 9 months
63,906
Taxation charge for the year
247,873
377,919
10
Contributions
2024
2023
£
£
Contribution to PR Trustee Ltd Employee Ownership Trust
1,437,636
1,417,063
1,437,636
1,417,063
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 17 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 May 2023 and 30 April 2024
6,000,005
Amortisation and impairment
At 1 May 2023
2,400,003
Amortisation charged for the year
600,000
At 30 April 2024
3,000,003
Carrying amount
At 30 April 2024
3,000,002
At 30 April 2023
3,600,002
12
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 May 2023
603,579
442,961
1,046,540
Additions
33,615
40,401
74,016
At 30 April 2024
637,194
483,362
1,120,556
Depreciation and impairment
At 1 May 2023
332,189
223,852
556,041
Depreciation charged in the year
92,738
92,368
185,106
At 30 April 2024
424,927
316,220
741,147
Carrying amount
At 30 April 2024
212,267
167,142
379,409
At 30 April 2023
271,390
219,109
490,499
13
Stocks
2024
2023
£
£
Work in progress
469,570
714,034
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,585,800
3,013,457
Other debtors
22,941
30,678
Prepayments and accrued income
162,643
658,593
2,771,384
3,702,728
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
17
333,333
400,000
Trade creditors
111,191
164,862
Corporation tax
57,968
174,418
Other taxation and social security
830,874
1,047,765
Other creditors
98,180
83,121
Accruals and deferred income
1,417,770
2,044,373
2,849,316
3,914,539
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
333,333
Other creditors
149,019
143,223
149,019
476,556
17
Loans and overdrafts
2024
2023
£
£
Bank loans
333,333
733,333
Payable within one year
333,333
400,000
Payable after one year
333,333
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
88,059
122,625
2024
Movements in the year:
£
Liability at 1 May 2023
122,625
Credit to profit or loss
(34,566)
Liability at 30 April 2024
88,059
The deferred tax liability set out above relates to accelerated capital allowances.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
288,249
276,916
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 20 -
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
250
250
250
250
Ordinary B of £1 each
250
250
250
250
Ordinary C of £1 each
100
100
100
100
Ordinary D of £1 each
20
20
20
20
Ordinary E of £1 each
125
125
125
125
Ordinary F of £1 each
150
150
150
150
Ordinary G of £1 each
20
20
20
20
Ordinary H of £1 each
65
65
65
65
Ordinary I of £1 each
10
10
10
10
Ordinary J of £1 each
10
10
10
10
1,000
1,000
1,000
1,000
21
Financial commitments, guarantees and contingent liabilities
The company's overdraft facility is secured by way of fixed and floating charges over all assets and property of the company.
As at the balance sheet date, there was a loan of £333,333 (2023: £733,333) representing a loan from the company's bankers for a business interruption loan. As part of its loan scheme the UK government guaranteed the advance and paid the interest and fees due for the first 12 months. This is shown within creditors within one year and over one year.
As at the balance sheet date, the remaining Employee Ownership Trust balance outstanding was £14,370,301 (2023: £15,807,937), this is anticipated to be payable over 8 years.
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
405,085
405,085
Between two and five years
1,156,639
1,388,694
In over five years
38,535
211,565
1,600,259
2,005,344
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
22
Operating lease commitments
(Continued)
- 21 -
Lessor
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2024
2023
£
£
Within one year
18,092
8,557
23
Directors' transactions
During the year, rent of £120,000 (2023 - £120,000) was paid to a company jointly owned by some of the directors.
24
Ultimate controlling party
On 1 May 2022, the shareholders transferred their shares to an employee ownership trust, PRL Trustee Limited, so that the company is now owned by its employees.
25
Employee Ownership Trust
On 1 May 2022 the entire issued share capital of the company was acquired by PRL Trustee Limited ("the trust"). The Trust holds the shares for the future benefit of the company's employees.
The Trust acquired the share capital of Potter Raper Ltd for £18,800,000. As at the balance sheet date, the remaining balance outstanding was £14,370,301 (2023: £15,807,937), this is anticipated to be payable over 8 years.
The Trust is financed by contributions from Potter Raper Limited (see note 10).
POTTER RAPER LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
26
Cash generated from operations
2024
2023
£
£
(Loss)/profit for the year after tax
(214,090)
1,156,915
Adjustments for:
Taxation charged
247,873
377,919
Finance costs
42,431
58,849
Investment income
(9,506)
(8,140)
Amortisation and impairment of intangible assets
600,000
600,000
Depreciation and impairment of tangible fixed assets
185,106
162,344
Movements in working capital:
Decrease in stocks
244,465
405,451
Decrease in debtors
931,344
845,875
Decrease in creditors
(876,310)
(1,413,586)
Cash generated from operations
1,151,312
2,185,627
27
Analysis of changes in net funds/(debt)
1 May 2023
Cash flows
30 April 2024
£
£
£
Cash at bank and in hand
1,224,733
(1,192,154)
32,579
Borrowings excluding overdrafts
(733,333)
400,000
(333,333)
491,400
(792,154)
(300,754)
POTTER RAPER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF POTTER RAPER LTD
- 23 -
Opinion
We have audited the financial statements of Potter Raper Ltd (the 'company') for the year ended 30 April 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
POTTER RAPER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF POTTER RAPER LTD (CONTINUED)
- 24 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
POTTER RAPER LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF POTTER RAPER LTD (CONTINUED)
- 25 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.
We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Declan McCusker
Senior Statutory Auditor
For and on behalf of Perrys Audit Limited
Chartered Accountants
Statutory Auditor
4th Floor
399-401 Strand
London
United Kingdom
WC2R 0LT
10 December 2024
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