Company registration number 10887298 (Scotland)
NATIONAL TIMBER GROUP TOPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NATIONAL TIMBER GROUP TOPCO LIMITED
COMPANY INFORMATION
Directors
R G Myatt
A D Steel
(Appointed 25 May 2023)
M Mikhailova
(Appointed 6 November 2023)
Company number
10887298
Registered office
22 Cross Keys Close
Marylebone
London
United Kingdom
W1U 2DW
Auditor
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
Bankers
Santander UK plc
Bootle Centre
Bridle Road
Bootle
L30 4GB
Solicitors
Addleshaw Goddard LLP
19 Canning Street
Edinburgh
EH3 8EH
NATIONAL TIMBER GROUP TOPCO LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 39
NATIONAL TIMBER GROUP TOPCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The Group is primarily engaged in the distribution of timber and value-added timber products.

National Timber Group serves a diverse and varied customer base including joiners, regional house builders, contractors, and national infrastructure projects. As a specialist supplier of timber, sheet, and joinery products, with substantial warehousing, processing, and distribution capabilities, the Group is able to provide a broad range of high quality products on short lead times, supported by comprehensive knowledge and expertise.

The Group’s strategy is to create the UK’s leading provider of sustainable timber solutions, growing by continuing to drive specialist volumes through the Group’s existing infrastructure, new trading sites, and accretive acquisitions. The Group’s proven integration framework quickly allows acquisitions to benefit from the advantages and synergies of the larger National Timber Group.

2023 proved to be an extremely challenging operating environment across our markets. The continued macroeconomic uncertainty and higher interest rate environment resulted in a significant reduction in demand. These impacts were particularly seen in the residential and RMI (repairs, maintenance and improvement) end markets, which contribute c.78% of Group revenue. Alongside the reduction in volumes, the market also experienced sharp sales price deflation, with average selling price falling by c.11% versus 2022 levels. The combinations of these factors resulted in Group revenue decreasing by £50.5m to £297.3m.

The Group delivered a gross margin of 26.0%, which was 160bps lower than 2022, impacted by an increasingly competitive trading environment, as a consequence of the lower market volumes. Included within this gross margin position was a one-off stock impairment of £1.9m, representing 70bps of the gross margin decline. This impairment resulted from the sharp reduction in selling prices and lower levels of demand in certain product areas.

Overall, the Group’s operating costs % of sales, excluding one-off exceptional costs, increased by 350bps in 2023 to 27.5%, driven by the sales reduction. The Group continued to review its cost base in line with market demand and to mitigate inflationary cost pressures arising from external, geo-political factors. The net impact of these actions was that the Group was able to mitigate these inflationary pressures and the cost annualisation of 2022 acquisition. Overall operating costs, excluding exceptional items, decreased by £1.6m to £81.8m.

The Group delivered an operating loss of £10.0m, £20.7m behind prior year.

Whilst our results were impacted in 2023 by short-term economic trends, the Group continue to see and is well placed to benefit from long-term structural growth drivers, including the ageing housing stock, structural housing deficit and long-term infrastructure investment across the UK. In addition, given its strong sustainability credentials, timber usage in construction is set to outpace other building material usage providing a significant opportunity for the Group.

Principal risks and uncertainties

The Group's operations expose it to a variety of financial risks as discussed below. The Group has a risk management programme that seeks to limit the adverse effect of such risks on financial performance.

Given the size of the Group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the Board of directors are implemented by the group's finance department.

Macro-economic uncertainties

The business operates in an environment impacted by an increasingly complex set of external factors. Economic uncertainties, including the ongoing cost of living crisis and inflation, and geopolitical factors combine to create an unpredictable trading environment, which could negatively impact performance. The Group continually monitors external economic lead indicators and liaises with external parties, including key stakeholders, in order to ensure that forecasts and Board decisions are based on the latest market outlook.

NATIONAL TIMBER GROUP TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Price risk

The Group is exposed to commodity price risk as a result of its operations. Commodity prices are continually monitored and proactively managed at both an operational management level and through the Group procurement function to ensure that selling prices are quickly adjusted to mitigate the risk to earnings.

Credit risk

The Group has implemented a policy that requires credit checks on potential customers before sales are made, in line with the terms of its credit insurance. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed regularly by the Board.

Liquidity risk

The Group maintains a mixture of long-term and short-term debt finance that is designed to ensure that the Group has sufficient funds for its operations.

Interest rate cash flow risk

The Group has interest-bearing liabilities, including a term facility and a revolving credit facility. The Group’s term and revolving credit facilities accrue interest daily based on the sterling overnight index average (SONIA).

Note 29 includes detail over the Group's post year-end financial restructuring.

The Group continually reviews its fixed versus floating interest rate position, performing sensitivity analysis to understand the impact of interest rate movements on future cash flows. The appropriateness of this position will be reassessed should the Group's operations change in size or nature.

Key performance indicators

Key performance indicators are used throughout the organisation to monitor performance and provide timely feedback to directors and employees. The Board use a number of indicators to monitor and improve the development, performance and position of the business. These indicators include customer metrics, revenue per day, gross profit margin, operating margin, working capital days and health & safety measures (LTAFR). Indicators are reviewed and altered as necessary to meet changes in the internal and external environments.

S172 Statement

In accordance with section 172 of the Companies Act 2006, each of our directors acts in the way he considers, in good faith would promote the success of the Group for the benefit of its members as a whole. The directors have taken into consideration, amongst other matters:

The Board acknowledges that every decision it makes will not necessarily result in a positive outcome for all the Group’s stakeholders. By considering the Group’s purpose, vision, and values, together with its strategic priorities and having a process in place for decision making the Board does, however, aim to make sure that its decisions are consistent.

Stakeholder engagement

The Board believes that considering our stakeholders in key business decisions is not only the right thing to do, but is fundamental to our ability to drive value creation. The Board seeks to understand the respective interest of such stakeholder groups through various methods, including direct engagement by Board members; receiving of reports and updates from members of management who engage with such groups; and coverage in our Board papers of relevant stakeholder interests with regards to proposed courses of action. The directors consider the following to be the Group’s key stakeholders:

NATIONAL TIMBER GROUP TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

Employees

The strength of our business is built on the hard work and dedication of our employees. The Board recognises that the implementation of an effective people strategy and strong culture underpin the effective delivery of the Group strategy.

Employees are kept informed of performance and strategy through regular presentations and updates from members of the Board. These updates are further supported by newsletters and management briefings. The directors attend key business meetings throughout the year, including weekly trading meetings. An anonymous employee whistleblowing line is also in place, allowing employees to raise any concerns in confidence.

Key focus of the Board includes employee health and well-being, personal development, pay and benefits.

Customers

The profitability of the business is underpinned by providing effective partnerships with customers to understand their needs and requirements. In recognition of this a core principle of the business is to be customer centric, building relationships and engaging at a local and national level, providing a high level of service through the expert knowledge of our employees and ensuring a quality product.

The Board receives regular updates on customer opinions, behaviour and feedback, including analysis of Rate Us. The insight received is used to inform decision making, understand customer needs and views in order to improve our offer and service for them.

Suppliers

The Board recognises that relationships with suppliers are important to the Group’s long-term success and is briefed on supplier feedback and issues on a regular basis. The Board seeks to balance the benefit of maintaining these strong relationships with the need to ensure the desired quality and service for our customers. Engagement with suppliers is primarily through our Group procurement function. Key areas of focus include innovation, product development, health and safety and sustainability.

Communities

The Board supports the initiatives with regards to reducing the adverse impacts on the environment and engages with the communities in which we operate. Key areas of focus include how we can support local causes and issues, create opportunities to recruit and develop local people and help to look after the environment. We partner with local charities at a site level to raise awareness and funds. The key issues and themes across local communities are reported back to the Board.

Government and regulations

We engage with the government and regulators through a range of industry consultations, forums, and meetings to communicate our views to policy makers relevant to our business. Key areas of focus are compliance with laws and regulations, health and safety and product safety. The Board is updated on legal and regulatory developments and takes these into account when considering future actions.

Investors

The Group relies on our shareholders and providers of debt funding as essential sources of capital to further our business objectives. Investor involvement in the decision making process includes representation on the Group Board. The Group has open dialogue with all investors through regular meetings which cover a wide range of topics including financial performance, strategy, outlook and governance.

On behalf of the board

R G Myatt
Director
21 January 2025
NATIONAL TIMBER GROUP TOPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company is that of a holding company.

 

The principal activity of the Group is the distribution of timber and value added timber products.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

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

J R L Declerck
(Resigned 6 November 2023)
J J M Faulds
(Resigned 31 May 2024)
N A McGill
(Resigned 25 May 2023)
R T Barclay
(Resigned 19 September 2023)
R G Myatt
J M Chilton
(Resigned 6 November 2023)
A D Steel
(Appointed 25 May 2023)
S Cairns
(Appointed 1 February 2024 and resigned 30 June 2024)
J E Gatfield
(Appointed 19 September 2023 and resigned 13 January 2025)
M Mikhailova
(Appointed 6 November 2023)
AF T Bayliss
(Appointed 6 November 2023 and resigned 1 February 2024)
Disabled persons

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

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Post reporting date events

On 13 January, National Timber Group Midco, the Company’s immediate subsidiary, completed its financial restructuring. This included securing a new £35 million super-senior asset-based lending facility, a new £18 million term loan facility, the repayment of its £15 million revolving credit facility, and a £96 million recapitalisation, in which outstanding debt was exchanged for new share capital. Following this recapitalisation, Pricoa Private Capital, part of Prudential Financial Inc., became the majority shareholder of National Timber Group Midco Limited and all group subsidiary companies.

The significant incremental liquidity generated by the new long-term facilities along with the debt reduction and cost saving measures implemented in Q4 2024, provides National Timber Group Midco and its subsidiaries with a solid platform upon which to deliver its planned strategic growth in markets which remain subdued.

NATIONAL TIMBER GROUP TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Future developments

Future developments are explained fully in the Group's Strategic Report as part of the business review.

Auditor

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

Energy and carbon report

In accordance with the requirements of the Streamlined Energy and Carbon Reporting (SECR) regulation, the Group’s greenhouse gas emissions are reported below for all in scope subsidiary businesses. The Group has adopted the reporting methodology as set out in the Greenhouse Gas Protocol when calculating its reportable CO2 emissions.

2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
28,160,868
18,532,522
- Electricity purchased
7,231,160
4,552,799
35,392,028
23,085,321
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
6,836.00
3,392.00
6,836.00
3,392.00
Scope 2 - indirect emissions
- Electricity purchased
1,497.00
871.00
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
-
-
Total gross emissions
8,333.00
4,263.00
Intensity ratio
per £m on turnover
28.09
15.67
Quantification and reporting methodology
Measures taken to improve energy efficiency

The Group continues to identify and implement measures across all businesses for the purpose of increasing energy efficiency and reducing waste, including the employment of a Group Sustainability Manager during the year. In 2023, the Group has continued its commercial vehicle replacement programme, replacing older vehicles with greener, more fuel efficient alternatives and amended its company car offering to electric and hybrid vehicles only. Energy efficiency measures have continued to be implemented across the branch network through the installation of LED lighting.

NATIONAL TIMBER GROUP TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
R G Myatt
Director
21 January 2025
NATIONAL TIMBER GROUP TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NATIONAL TIMBER GROUP TOPCO LIMITED
- 7 -
Opinion

We have audited the financial statements of National Timber Group Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

NATIONAL TIMBER GROUP TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NATIONAL TIMBER GROUP TOPCO LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

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.

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:

 

 

 

 

NATIONAL TIMBER GROUP TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NATIONAL TIMBER GROUP TOPCO LIMITED
- 9 -

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

 

 

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

 

 

 

 

 

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

 

 

 

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

NATIONAL TIMBER GROUP TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NATIONAL TIMBER GROUP TOPCO LIMITED
- 10 -
Paul Winwood (Senior Statutory Auditor)
For and on behalf of BHP LLP
21 January 2025
Chartered Accountants
Statutory Auditor
2 Rutland Park
Sheffield
S10 2PD
NATIONAL TIMBER GROUP TOPCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
as restated
Notes
£
£
Turnover
3
297,285,876
347,759,499
Cost of sales
(217,954,809)
(251,802,175)
Gross profit
79,331,067
95,957,324
Distribution costs
(16,491,640)
(15,545,127)
Administrative expenses
(66,885,922)
(68,033,921)
Other operating (expenses)/income
(444,827)
168,156
Exceptional items
4
(5,485,380)
(1,823,483)
Operating (loss)/profit
5
(9,976,702)
10,722,949
Interest receivable and similar income
9
2,453
8,083
Interest payable and similar expenses
10
(12,310,966)
(8,783,068)
(Loss)/profit before taxation
(22,285,215)
1,947,964
Tax on (loss)/profit
11
(453,089)
(1,154,814)
(Loss)/profit for the financial year
(22,738,304)
793,150
All of the (loss)/ profit for the financial year and other comprehensive income is attributable to the owners of the parent company.
NATIONAL TIMBER GROUP TOPCO LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
12
14,690,657
17,056,364
Other intangible assets
12
209,249
285,002
Total intangible assets
14,899,906
17,341,366
Tangible assets
13
21,925,189
20,314,923
Investments
14
4,521
4,521
36,829,616
37,660,810
Current assets
Stocks
16
40,779,971
51,157,164
Debtors
17
46,792,942
60,731,373
Cash at bank and in hand
11,537,367
5,459,387
99,110,280
117,347,924
Creditors: amounts falling due within one year
18
(58,626,358)
(68,364,549)
Net current assets
40,483,922
48,983,375
Total assets less current liabilities
77,313,538
86,644,185
Creditors: amounts falling due after more than one year
19
(97,192,202)
(83,924,072)
Provisions for liabilities
Deferred tax liability
22
3,086,250
2,947,350
(3,086,250)
(2,947,350)
Net liabilities
(22,964,914)
(227,237)
Capital and reserves
Called up share capital
24
1,191,855
1,191,228
Share premium account
504
504
Profit and loss reserves
(24,157,273)
(1,418,969)
Total equity
(22,964,914)
(227,237)
The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
21 January 2025
R G Myatt
Director
Company registration number 10887298 (Scotland)
NATIONAL TIMBER GROUP TOPCO LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
14
1
1
Current assets
Debtors
17
1,194,026
1,193,399
Creditors: amounts falling due within one year
18
(1)
(1)
Net current assets
1,194,025
1,193,398
Net assets
1,194,026
1,193,399
Capital and reserves
Called up share capital
24
1,191,855
1,191,228
Share premium account
504
504
Profit and loss reserves
1,667
1,667
Total equity
1,194,026
1,193,399

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2022 - £0)

The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
21 January 2025
R G Myatt
Director
Company registration number 10887298 (Scotland)
NATIONAL TIMBER GROUP TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
1,191,228
504
668,423
1,860,155
Effect of prior year restatement (Note 32)
-
-
(2,880,542)
(2,880,542)
Restated at 1 January 2022
1,191,228
504
(2,212,119)
(1,020,387)
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
732,967
732,967
Effect of prior year restatement (Note 32)
60,183
60,183
Balance at 31 December 2022
1,191,228
504
(1,418,969)
(227,237)
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(22,738,304)
(22,738,304)
Issue of share capital
24
30,407
-
0
-
30,407
Reduction of shares
24
(29,780)
-
-
(29,780)
Balance at 31 December 2023
1,191,855
504
(24,157,273)
(22,964,914)
NATIONAL TIMBER GROUP TOPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
1,191,228
504
1,667
1,193,399
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
-
0
Balance at 31 December 2022
1,191,228
504
1,667
1,193,399
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
-
0
Issue of share capital
24
30,407
-
0
-
30,407
Reduction of shares
24
(29,780)
-
-
(29,780)
Balance at 31 December 2023
1,191,855
504
1,667
1,194,026
NATIONAL TIMBER GROUP TOPCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
31
(3,880,676)
20,550,762
Interest paid
(8,537,712)
(8,355,291)
Income taxes paid
(630,566)
(2,008,131)
Net cash (outflow)/inflow from operating activities
(13,048,954)
10,187,340
Investing activities
Purchase of business
-
(7,885,036)
Purchase of intangible assets
(112,603)
(136,333)
Purchase of tangible fixed assets
(5,349,640)
(3,948,297)
Proceeds from disposal of tangible fixed assets
85,915
45,303
Interest received
2,453
8,083
Net cash used in investing activities
(5,373,875)
(11,916,280)
Financing activities
Proceeds from issue of shares
627
-
Drawdown/(repayment) of shareholder funding
12,000,000
(33,986,842)
Increase/(decrease) in invoice discounting facility
-
(31,034,359)
Net proceeds from/(repayments of) bank loans
12,600,000
67,205,327
Payment of finance leases obligations
(99,818)
(773,769)
Net cash generated from financing activities
24,500,809
1,410,357
Net increase/(decrease) in cash and cash equivalents
6,077,980
(318,583)
Cash and cash equivalents at beginning of year
5,459,387
5,777,970
Cash and cash equivalents at end of year
11,537,367
5,459,387
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

National Timber Group Topco Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 22 Cross Keys Close, Marylebone, London, United Kingdom, W1U 2DW.

 

The group consists of National Timber Group Topco Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

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

 

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

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company National Timber Group Topco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

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

1.4
Going concern

After reviewing the Group’s forecasts and risk assessments and making other enquiries, the Board has formed the judgement at the time of approving the financial statements that there is a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the 12 months from the date of signing this Annual report and financial statements. For this reason, the Board continues to adopt the going concern basis in preparing the financial statements.

 

In arriving at their opinion, the Directors considered:

 

• The Group’s cash flow forecasts and revenue projections

 

• The impact of reasonable possible changes in trading performance

 

• The committed debt facilities available to the Group and the covenants thereon

 

• The Group’s ability to successfully manage the principal risk and uncertainties outlined on page 2 during periods of uncertain economic outlook and challenging macroeconomic conditions.

 

The forecasts on which the going concern assessment is based have been subject to sensitivity analysis and stress testing to assess the impact of the above risks and the Directors have also reviewed mitigating actions that could be taken. The conclusions from these reviews all supported the adoption of the going concern basis.

1.5
Turnover

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

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

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

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

1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Software
3 years straight line
1.8
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold property
25 years straight line
Leasehold land and buildings
9 years straight line
Plant and equipment
5 years straight line
Fixtures and fittings
5 years straight line
Motor vehicles
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.9
Fixed asset investments

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

 

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

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -

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

1.10
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

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

1.11
Stocks

Stocks are stated at the lower of cost after deducting supplier rebates, and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.13
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
Derecognition of financial liabilities

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

1.14
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.16
Provisions

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

 

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

1.17
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.

1.18
Retirement benefits

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

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.19
Leases

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

 

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.20
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
2
Judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, as described above, the Directors are required to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the year end date, and the amounts reported for revenues and expenses during the period.

 

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, and in future period should it affect these.

 

The significant estimates and assumptions which are currently applicable are outlined below.

 

Impairment of fixed assets

The Group tests goodwill, other intangible assets and tangible fixed assets annually for impairment, or more frequently if there are indications that an impairment may be required.

 

In determining whether fixed assets are impaired, the value in use of the relevant cash generating unit is reviewed. The key estimates made in the value in use calculation are those regarding discount rates, sales growth rates and direct costs to reflect the operational gearing of the business. Reviews are performed by forecasting cashflows based upon the budget and latest forecasts, which anticipates sales growth based on industry growth expectation and management experience.

 

Useful economic lives of tangible fixed assets

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

 

Stock provision

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

 

The stocks valuation at the reporting date is after the deduction of rebates due to the Group pursuant to contractual agreements with suppliers - see supplier rebates paragraph later in this note.

 

Supplier rebates

As supplier rebate income is received in arrears, estimates are required to calculate the amount receivable and to be included in debtors. Detailed purchase records and current rebate deals agreed with suppliers are used to estimate rebate amounts receivable.

 

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
297,201,366
347,451,242
Rest of Europe
84,510
308,257
297,285,876
347,759,499
2023
2022
£
£
Other revenue
Interest income
2,453
8,083
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
4
Exceptional item
2023
2022
£
£
Expenditure/ (Income)
Restructuring and redundancy costs
4,594,165
915,137
Operational provision
-
(487,818)
Refinancing and other
891,215
1,396,164
5,485,380
1,823,483

Exceptional costs are expenses that are material in nature and arise from events or transactions outside the ordinary course of business. These costs are typically unrelated to the normal operating activities of the company and arise from restructuring or other one-off events. Costs may include redundancy, property closure costs, consultancy costs and legal fees which are significant in size and will not be incurred on an ongoing basis.

 

Exceptional costs are recognised in the financial statements when they are directly attributable to the exceptional event or circumstance occurring in the period, it is probably that an outflow of economic benefit will occur and the cost can be reliably measured.

5
Operating (loss)/profit
2023
2022
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange gains
(15,772)
(61,656)
Depreciation of owned tangible fixed assets
2,533,992
2,116,445
Depreciation of tangible fixed assets held under finance leases
367,069
367,069
Loss/(profit) on disposal of tangible fixed assets
752,398
(4,167)
Amortisation of intangible assets
2,554,063
2,065,756
Operating lease charges
10,327,273
8,982,887
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
33,693
36,415
Audit of the financial statements of the company's subsidiaries
133,427
91,082
167,120
127,497
For other services
Taxation compliance services
42,228
17,642
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
7
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Production & distribution staff
1,042
956
-
-
Management, administration & sales staff
329
441
-
-
Directors
2
2
-
-
Total
1,373
1,399
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
46,584,068
48,367,390
-
0
-
0
Social security costs
4,255,111
4,167,424
-
-
Pension costs
1,603,468
1,572,062
-
0
-
0
52,442,647
54,106,876
-
0
-
0

Of the 5 Directors appointed in 2023, 3 were not employees of the group and act in a non-executive capacity.

8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
879,505
839,514
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
314,905
542,490
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,453
8,083
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
11,628,074
7,252,344
Interest on shareholders loans
-
1,054,004
Interest on finance leases and hire purchase contracts
61,054
48,943
Finance cost amortisation
621,838
427,777
Total finance costs
12,310,966
8,783,068
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
91,369
248,048
Adjustments in respect of prior periods
(68,745)
-
0
Total current tax
22,624
248,048
Deferred tax
Origination and reversal of timing differences
430,465
906,766
Total tax charge
453,089
1,154,814
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 28 -

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(22,285,215)
1,947,964
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(5,241,483)
370,113
Tax effect of expenses that are not deductible in determining taxable profit
546,116
383,811
Tax effect of income not taxable in determining taxable profit
-
0
(40,670)
Change in unrecognised deferred tax assets
4,982,619
(123,724)
Group relief
19,257
-
0
Permanent capital allowances in excess of depreciation
524,299
3,275
Adjustments in respect of financial assets
(1,858)
-
0
Other non-reversing timing differences
-
0
(310)
Other permanent differences
3,272
-
0
Under/(over) provided in prior years
(68,790)
-
0
Deferred tax adjustments in respect of prior years
(178,338)
-
0
Tax relief in respect of gift aid
(93,702)
-
Remeasurement of deferred tax
-
0
247,979
Other movements
(12,018)
(11,435)
Other tax adjustments, reliefs and transfers
(162,176)
280
Losses carried back
135,891
325,495
Taxation charge
453,089
1,154,814

The group has carried forward tax losses of £7.7m (2021: £8.5m) arising from unrelieved interest deductions. A deferred tax asset of £1.9m has not been provided for in these financial statements.

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
12
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
23,556,307
570,541
24,126,848
Additions
-
0
112,603
112,603
At 31 December 2023
23,556,307
683,144
24,239,451
Amortisation and impairment
At 1 January 2023
6,499,943
285,539
6,785,482
Amortisation charged for the year
2,365,707
188,356
2,554,063
At 31 December 2023
8,865,650
473,895
9,339,545
Carrying amount
At 31 December 2023
14,690,657
209,249
14,899,906
At 31 December 2022
17,056,364
285,002
17,341,366
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
13
Tangible fixed assets
Group
Freehold property
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
2,440,353
5,481,836
22,889,827
9,207,849
905,768
40,925,633
Additions
5,000
2,323,498
1,987,999
1,029,947
3,196
5,349,640
Disposals
-
0
(727,604)
(1,139,566)
(145,401)
(27,833)
(2,040,404)
At 31 December 2023
2,445,353
7,077,730
23,738,260
10,092,395
881,131
44,234,869
Depreciation and impairment
At 1 January 2023
(12,587)
1,501,019
13,887,408
5,161,819
73,051
20,610,710
Depreciation charged in the year
22,102
690,801
1,311,711
758,483
117,964
2,901,061
Eliminated in respect of disposals
-
0
(193,568)
(932,758)
(60,860)
(14,905)
(1,202,091)
At 31 December 2023
9,515
1,998,252
14,266,361
5,859,442
176,110
22,309,680
Carrying amount
At 31 December 2023
2,435,838
5,079,478
9,471,899
4,232,953
705,021
21,925,189
At 31 December 2022
2,452,940
3,980,817
9,002,419
4,046,030
832,717
20,314,923
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
2,871,798
2,667,018
-
0
-
0
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
1
1
Unlisted investments
4,521
4,521
-
0
-
0
4,521
4,521
1
1
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 January 2023 and 31 December 2023
4,521
Carrying amount
At 31 December 2023
4,521
At 31 December 2022
4,521

Unlisted investments represents a minority interest in National Merchant Buying Society and the directors are of the opinion that the amount recognised is an appropriate reflection of fair value.

Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
1
Carrying amount
At 31 December 2023
1
At 31 December 2022
1
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
LHSL 2 Limited*
England and Wales
Ordinary
-
100.00
Arnold Laver Holdings Limited*
England and Wales
Ordinary
-
100.00
NYT (Holdings) Limited*
England and Wales
Ordinary
-
100.00
North Yorkshire Timber Company Limited
England and Wales
Ordinary
-
100.00
National Timber Group Scotland Limited
Scotland
Ordinary
-
100.00
Glow Insulation & Site Supplies Limited*
Scotland
Ordinary
-
100.00
Scotia Roofing and Building Supplies Ltd*
Scotland
Ordinary
-
100.00
National Timber Group England Limited
England and Wales
Ordinary
-
100.00
Fire Door Inspect Limited*
England and Wales
Ordinary
-
100.00
National Timber Group Midco Limited
England and Wales
Ordinary
100.00
-
Joseph Thompson & Co Limited
England and Wales
Ordinary
-
100.00
Hymor Timber Limited*
England and Wales
Ordinary
-
100.00
Orchard Timber Products Limited*
Scotland
Ordinary
-
100.00
Ken's Yard Limited
Scotland
Ordinary
-
100.00
Legname Limited
Scotland
Ordinary
-
100.00
Intelligent Door Solutions Limited
England and Wales
Ordinary
-
100.00
Norclad Limited*
England and Wales
Ordinary
-
100.00
AMA Timber Services Limited*
England and Wales
Ordinary
-
100.00
S.V.Timber Limited*
England and Wales
Ordinary
-
100.00

* Subsidiaries that are exempt from audit by virtue of section 479A of the Companies Act 2006 with parental guarantee given by the company. The Company Registration numbers have been provided in relation to these exempt subsidiaries in note 30.

16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
40,779,971
51,157,164
-
0
-
0
40,779,971
51,157,164
-
-
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
32,920,466
44,556,565
-
0
-
0
Corporation tax recoverable
10,986
-
0
-
0
-
0
Amounts owed by group undertakings
-
-
1,149,800
1,149,173
Other debtors
2,547,915
2,861,652
44,226
44,226
Prepayments and accrued income
11,313,575
13,313,156
-
0
-
0
46,792,942
60,731,373
1,194,026
1,193,399
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
20
16,300,000
2,000,000
-
0
-
0
Obligations under finance leases
21
447,566
635,307
-
0
-
0
Trade creditors
30,176,082
47,005,636
-
0
-
0
Corporation tax payable
189,757
495,148
-
0
-
0
Other taxation and social security
3,288,241
4,483,650
-
-
Other creditors
1,507,107
1,314,017
-
0
-
0
Accruals and deferred income
6,717,605
12,430,791
1
1
58,626,358
68,364,549
1
1

Bank loans are secured by a fixed and floating charge over the group's assets.

 

The obligations under finance lease are secured against the relevant assets.

19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
95,507,376
81,727,169
-
0
-
0
Obligations under finance leases
21
1,084,826
996,903
-
0
-
0
Other creditors
600,000
1,200,000
-
0
-
0
97,192,202
83,924,072
-
-
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Creditors: amounts falling due after more than one year
(Continued)
- 34 -

On 7 April 2022, National Timber Group Midco completed a refinancing exercise resulting in new term loan borrowing of £85m. This term facility was used to repay the Group’s existing bank borrowings and shareholder loan notes in full. Throughout 2023, a further £15m has been drawn down on this facility. This term facility was supplemented with a £15m revolving credit facility to fund the seasonal working capital requirements of the Group.

 

Post year end there has been a subsequent refinancing excercise undertaken by the Group. Details are included in Note 29.

 

20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
111,807,376
83,727,169
-
0
-
0
Payable within one year
16,300,000
2,000,000
-
0
-
0
Payable after one year
95,507,376
81,727,169
-
0
-
0

The Group's revolving credit facility and term loans, included within bank loans, are secured over the assets of the Group.

 

Bank loans were repayable in quarterly installments of £425,000, commencing March 2025.

 

Interest on borrowings carries a variable interest rate of SONIA plus 4.00 to 10.25 percent.

 

21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
447,566
635,307
-
0
-
0
In two to five years
1,084,826
996,903
-
0
-
0
1,532,392
1,632,210
-
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Fixed assets timing differences
3,020,000
2,821,350
Short term timing differences
66,250
(28,000)
Other
-
154,000
3,086,250
2,947,350
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
2,947,350
-
Charge to profit or loss
138,900
-
Liability at 31 December 2023
3,086,250
-
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,603,468
1,572,062

The group operates a number of defined contribution pension schemes for all qualifying employees. The assets of the schemes are held separately from those of the group in independently administered funds.

24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
1,003,188
1,003,188
1,038,968
1,003,188
Ordinary B shares of £1 each
188,040
188,040
152,260
188,040
Ordinary C shares of 1p each
62,697
-
627
-
1,253,925
1,191,228
1,191,855
1,191,228
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
10,314,782
8,934,053
-
-
Between two and five years
31,941,235
20,637,372
-
-
In over five years
8,634,360
14,893,560
-
-
50,890,377
44,464,985
-
-
26
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
359,184
645,474
-
-
27
Related party transactions

The Group has taken advantage of the exemption provided by FRS 102 from the requirement to report transactions with other group companies that are 100% subsidiaries of the parent company National Timber Group Topco Limited.

The Company and Cairngorm Capital II LP are related parties due to the existence of common members / directorships and because the private equity funds Cairngorm Capital II LP, which is managed by Cairngorm Capital Partners LLP, own a controlling interest in the parent company National Timber Group Topco Limited.

At 31 December 2023, the Group had a term loan payable to Cairngorm Capital II LP of £12,000,000 (2022: £nil).

 

28
Controlling party

The ultimate controlling party is Cairngorm Capital Partners II LP, a fund managed by Cairngorm Capital Partners LLP, a partnership registered in England and Wales.

 

The group headed by National Timber Group Topco Limited is the smallest and largest group in which the results of the company are consolidated.

NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
29
Post balance sheet events

On 13 January, National Timber Group Midco, the Company’s immediate subsidiary, completed its financial restructuring. This included securing a new £35 million super-senior asset-based lending facility, a new £18 million term loan facility, the repayment of its £15 million revolving credit facility, and a £96 million recapitalisation, in which outstanding debt was exchanged for new share capital. Following this recapitalisation, Pricoa Private Capital, part of Prudential Financial Inc., became the majority shareholder of National Timber Group Midco Limited and all group subsidiary companies.

The significant incremental liquidity generated by the new long-term facilities along with the debt reduction and cost saving measures implemented in Q4 2024, provides National Timber Group Midco and its subsidiaries with a solid platform upon which to deliver its planned strategic growth in markets which remain subdued.

30
Audit exemption provided to certain Group subsidiaries

The Company is providing certain wholly owned subsidiaries (as disclosed in note 15 and which are included within these Group consolidated financial statements) with guarantee of their respective debts in the form prescribed by Section 479A of the Companies Act 2006 ('the Act') such that they can claim exemption from requiring an audit in accordance with Section 479A of the Act. The guarantees cover all of the outstanding actual and contingent liabilities of these companies at 31 December 2023:

Subsidiary
Company number
Glow Insulation and Site Supplies Limited
SC463103
Scotia Roofing and Building Supplies Limited
SC045055
Fire Door Inspect Limited
11483283
Orchard Timber Products Limited
SC261671
S.V. Timber Limited
05112363
Norclad Limited
08151796
AMA Timber Services Limited
05968435
Arnold Laver Holdings Limited
10695726
LHSL 2 Limited
11282225
North Yorkshire Timber Company Limited
01419058
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
31
Cash (absorbed by)/generated from group operations
2023
2022
£
£
(Loss)/profit for the year after tax
(22,738,304)
793,150
Adjustments for:
Taxation charged
453,089
1,154,814
Finance costs
12,310,966
8,783,068
Investment income
(2,453)
(8,083)
Loss/(gain) on disposal of tangible fixed assets
752,398
(4,167)
Amortisation and impairment of intangible assets
2,554,063
2,065,756
Depreciation and impairment of tangible fixed assets
2,901,061
2,483,514
Decrease in provisions
-
(1,100,000)
Movements in working capital:
Decrease in stocks
10,377,193
4,241,828
Decrease in debtors
13,949,417
996,897
(Decrease)/increase in creditors
(24,438,106)
1,143,985
Cash (absorbed by)/generated from operations
(3,880,676)
20,550,762
32
Analysis of changes in net debt - group
1 January 2023
Cash flows
Other non-cash changes
31 December 2023
£
£
£
£
Cash at bank and in hand
5,459,387
6,077,980
-
11,537,367
Borrowings excluding overdrafts and shareholder loan notes
(83,727,169)
(19,560,415)
3,480,208
(99,807,376)
Obligations under finance leases
(1,632,210)
99,818
-
(1,532,392)
Shareholder term loan
-
(12,000,000)
-
(12,000,000)
(79,899,992)
(25,382,617)
3,480,208
(101,802,401)
NATIONAL TIMBER GROUP TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 39 -
33
Prior period adjustment
Changes to the balance sheet - group
As previously reported at 31 Dec 2022
Adjustment at 1 Jan 2022
Adjustment at 31 Dec 2022
As restated at 31 Dec 2022
£
£
£
£
Current assets
Stocks
53,977,523
(2,880,542)
60,183
51,157,164
Capital and reserves
Profit and loss reserves
1,401,390
(2,880,542)
60,183
(1,418,969)
Prior year adjustment

The directors, having previously considered the impact of rebate in stock to be immaterial, are aware that the adjustment required to ensure that stocks are valued at cost net of rebates receivable has become a significant figure. The Group's accounting policy has therefore been updated so that the holding of each item of stock at the reporting date should be after the deduction of rebates due per contractual agreement with suppliers, in line with the provision of FRS102. The stock value at 31 December 2023 of £40,779,971 is net of rebate amount of £2,380,311.

 

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