Company registration number 10608445 (England and Wales)
NATIONAL TIMBER GROUP ENGLAND LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NATIONAL TIMBER GROUP ENGLAND LIMITED
COMPANY INFORMATION
Directors
R G Myatt
J E Gatfield
(Appointed 30 June 2024)
P Procyck
(Appointed 13 January 2025)
S Shipley
(Appointed 13 January 2025)
E J Cunningham
(Appointed 13 January 2025)
Company number
10608445
Registered office
Bramall Lane
Sheffield
South Yorkshire
England
S2 4RJ
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 ENGLAND LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 29
NATIONAL TIMBER GROUP ENGLAND 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 principal activities of National Timber Group England Limited are timber importing and the merchanting and manufacture of timber and related products. These activities originate from Arnold Laver’s founding of the business in Sheffield in 1920.

There has been a continued focus on specialist, value-add business. This includes National Timber Systems, covering the engineered timber products business (roof systems, floor joists & roof cassettes), which performed particularly strongly in 2023 within the housing sector. In addition, we continue to provide door set solutions into the commercial and hospitality sectors via our production facilities in Bradford & Leeds.

The business will continue to remain a timber specialist that is customer-focused, delivering service and product innovation to support its growth plans across its target market segments. Its broad range of products, market sectors and customers should ensure that it is not over-reliant on any one market. It is well placed to service the growth opportunities that exist in most of the major cities, particularly in the areas of commercial development, house-building and major infrastructure investment. We also continue to target specialist end-users with a range of innovative decorative products and the Company continues to invest in value-add production capacity to support its growth plans and to deliver product solutions for our customers.

As part of the Company’s continuing commitment to quality and standards, it remains a member of all major timber industry bodies and has representation at main and technical board level. In addition, all its major sites hold relevant ISO accreditations and all timber products are certified under both FSC and PEFC, where applicable. The Company’s environmental focus has led to significant investments in people and systems to support carbon measurement and help to implement appropriate action plans to deliver sustainable reductions in carbon usage. Finally, health & safety continues to be the Company’s number one priority, as reflected in the ongoing investment in systems, training and support.

Development and performance

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

 

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 Company 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.

 

Price risk

The Company 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 procurement function to ensure that selling prices are quickly adjusted to mitigate the risk to earnings.

Credit risk

The Company 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.

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

During the year the opportunity was taken to simplify the Group’s corporate structure which resulted in the Company acquiring, at book value, the trade, assets and liabilities of its subsidiary companies Norclad Timber Limited and AMA Timber Services Limited on 31 January 2023 and the trade, assets and liabilities of S.V. Timber Limited on 31 March 2023.

Revenue increased by £7.2m in the year, including £12.6m from the post hive-up trade of the three subsidiary companies noted above. Excluding this, underlying revenue was down by £5.4m, impacted by 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.69% of 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 Company delivered a gross margin of 25.4%, which was 100bps lower than 2022, impacted by an increasingly competitive trading environment, as a consequence of the lower market volumes.

Overall operating costs % of sales, excluding one-off exceptional costs, increased by 350bps in 2023 to 26.1%, driven by the sales reduction. The Company continued to review its cost base in line with market demand and to mitigate inflationary cost pressures arising from external, geo-political factors. Despite this, overall costs excluding exceptional items increased by £8.5m to £51.4m.

Following the acquisition of the trade, assets and liabilities of Norclad Timber Limited, AMA Timber Services Limited and S.V. Timber Limited and the subsequent distribution of reserves to the Company by way of a £20.6m dividend receipt, the Company’s investments in these subsidiaries were impaired. This resulted in a £21.7m impairment loss being recognised within exceptional items which totalled £25.6m.

Excluding the exceptional items noted above, the Group reported an underlying operating loss of £1.4m, £8.5m below prior year.

NATIONAL TIMBER GROUP ENGLAND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
S.172 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 company 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 of the Group’s stakeholders. By considering the Company’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 Company’s key stakeholders:

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 company 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 the Net Promoter Score. 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 along with the need to obtain value for money for our investors and desired quality and service levels 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.

NATIONAL TIMBER GROUP ENGLAND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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 company Board. The company has open dialogue with all investors through regular meetings which cover a wide range of topics including financial performance, strategy, outlook and governance.

R G Myatt
Director
21 January 2025
NATIONAL TIMBER GROUP ENGLAND LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

Principal activities

The principal activity of the company continued to be the distribution of timber and value added timber product.

Results and dividends

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

No ordinary dividends were paid.

Directors

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

P J Guest
(Resigned 30 June 2024)
R T Barclay
(Resigned 19 September 2023)
N A McGill
(Resigned 7 March 2023)
R G Myatt
J M Chilton
(Resigned 7 March 2023)
S Cairns
(Appointed 1 February 2024 and resigned 30 June 2024)
J E Gatfield
(Appointed 30 June 2024)
E Holder
(Appointed 2 September 2024 and resigned 13 September 2024)
M Mikhailova
(Appointed 30 June 2024 and resigned 13 January 2025)
A D Steel
(Appointed 30 June 2024 and resigned 13 January 2025)
P Procyck
(Appointed 13 January 2025)
S Shipley
(Appointed 13 January 2025)
E J Cunningham
(Appointed 13 January 2025)
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 company continues and that the appropriate training is arranged. It is the policy of the company 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 company'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 company's performance.

Post reporting date events

On 13 January 2025, the Company’s immediate parent, National Timber Group Midco Limited, successfully 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 its subsidiary companies, including National Timber Group England Limited.

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 the Company and wider National Timber Group with a solid platform upon which to deliver its planned strategic growth in markets which remain subdued.

NATIONAL TIMBER GROUP ENGLAND LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Auditor

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

Energy and carbon report

The SECR disclosures relating to the Company are included within the SECR disclosures made in the annual report of National Timber Group Topco Limited, the Company's ultimate parent at the balance sheet date. The Company has taken advantage of the exemption from the requirement to make SECR disclosures in these financial statements.

Statement of directors' responsibilities

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

 

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

 

 

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

Statement of disclosure to auditor

Each of the directors in office at the date of approval of this annual report confirms that:

 

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

We have audited the financial statements of National Timber Group England Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 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.

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 ENGLAND LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF NATIONAL TIMBER GROUP ENGLAND LIMITED
- 8 -
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:

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.

 

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.

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

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:

 

 

 

 

We assessed the susceptibility of the company’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.

NATIONAL TIMBER GROUP ENGLAND LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF NATIONAL TIMBER GROUP ENGLAND LIMITED
- 10 -

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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

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 ENGLAND LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
as restated
Notes
£
£
Turnover
3
196,551,129
189,306,863
Cost of sales
(146,682,912)
(139,320,471)
Gross profit
49,868,217
49,986,392
Distribution costs
(13,588,856)
(12,230,614)
Administrative expenses
(38,249,749)
(30,828,573)
Other operating income
487,399
168,156
Exceptional items
4
(25,634,827)
201,119
Operating (loss)/profit
5
(27,117,816)
7,296,480
Interest receivable and similar income
7
20,871,749
2,158
Interest payable and similar expenses
8
(101,377)
(255,596)
(Loss)/profit before taxation
(6,347,444)
7,043,042
Tax on (loss)/profit
9
(651,153)
(757,847)
(Loss)/profit for the financial year
(6,998,597)
6,285,195

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

NATIONAL TIMBER GROUP ENGLAND LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
10
2,716,366
3,316,366
Tangible assets
11
18,946,835
15,757,661
Investments
12
-
0
21,582,807
21,663,201
40,656,834
Current assets
Stocks
14
28,122,450
33,945,576
Debtors
15
38,132,422
42,468,766
Cash at bank and in hand
4,106,671
991,991
70,361,543
77,406,333
Creditors: amounts falling due within one year
16
(61,260,277)
(80,327,276)
Net current assets/(liabilities)
9,101,266
(2,920,943)
Total assets less current liabilities
30,764,467
37,735,891
Creditors: amounts falling due after more than one year
17
(1,684,826)
(2,196,903)
Provisions for liabilities
Deferred tax liability
19
2,706,250
2,167,000
(2,706,250)
(2,167,000)
Net assets
26,373,391
33,371,988
Capital and reserves
Called up share capital
21
2
2
Profit and loss reserves
26,373,389
33,371,986
Total equity
26,373,391
33,371,988
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:
R G Myatt
Director
Company registration number 10608445 (England and Wales)
NATIONAL TIMBER GROUP ENGLAND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
2
28,817,942
28,817,944
Effect of prior year misstatement (Note 26)
-
(1,731,151)
(1,731,151)
Restated at 1 January 2022
2
27,086,791
27,086,793
Year ended 31 December 2022:
Profit and total comprehensive income
-
6,322,315
6,285,195
Effect of prior year misstatement (Note 26)
-
(37,120)
(37,120)
Total comprehensive income
-
6,285,195
6,285,195
Balance at 31 December 2022
2
33,371,986
33,371,988
Year ended 31 December 2023:
Loss and total comprehensive income
-
(6,998,597)
(6,998,597)
Balance at 31 December 2023
2
26,373,389
26,373,391
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

National Timber Group England Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bramall Lane, Sheffield, South Yorkshire, England, S2 4RJ.

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.

This 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:

 

 

The financial statements of the company are consolidated in the financial statements of National Timber Group Topco Limited. These consolidated financial statements are available from Companies House.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.2
Going concern

The Company is part of the National Timber Group and is a guarantor company for the Group’s borrowing facilities. The Company’s ability to operate as a going concern is therefore directly linked to the Group’s funding position which the Directors have considered in their assessment of going concern.true

 

After reviewing the Group’s forecasts and risk assessments and making enquiries, the Directors have formed a judgement at the time of approving the financial statements, that there is a reasonable expectation that the Company has 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 Directors continue to adopt the going concern basis in preparing the financial statements.

 

In arriving at their opinion, the Directors considered:

 

The Group 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.

1.3
Turnover

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts and VAT.

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

1.4
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. No amortisation is provided in the year of acquisition.

 

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.

1.5
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.

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

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:

Leasehold land and buildings
over the life of the lease
Plant and equipment
5 - 20 years straight line
Fixtures and fittings
5 - 20 years straight line

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

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

 

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

1.7
Impairment of fixed assets

At each reporting period end date, the company 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.

1.8
Stocks

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

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.

1.9
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.

1.10
Financial instruments

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

 

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

 

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

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

Loans and receivables

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Basic financial liabilities

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

 

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

 

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

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.

Financial liabilities at fair value through profit or loss

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

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

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

1.12
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.

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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.

1.13
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.

1.14
Retirement benefits

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

1.15
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 leases asset are consumed.

1.16
Foreign exchange

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

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.

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
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.

Impairment of fixed assets

The Company tests tangible fixed assets and investments annually for impairment, or more frequently if there are indications that an impairment may be required.

 

In determining whether no-current assets are impaired, the value of use of the 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 charges are made for depreciations.

Stock provisions

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.

Retrospective rebates

A number of rebate receivable and payable agreements are non-coterminous with the Company’s financial year, requiring estimation over the level of future purchases and sales. At the balance sheet date the Directors estimate the amount of rebate that will become due to and payable by the Company under these agreements based upon historical experience, current trading patterns and the latest internal and external forecasts.

3
Turnover and other revenue

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

2023
2022
£
£
Turnover analysed by class of business
Timber trade
196,551,129
189,306,863
2023
2022
£
£
Turnover analysed by geographical market
UK
196,466,619
188,988,604
Europe
84,510
318,259
196,551,129
189,306,863
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 21 -
2023
2022
£
£
Other revenue
Interest income
-
2,158
Dividends received
20,871,749
-
4
Exceptional item
2023
2022
£
£
Expenditure
Restructure and redundancy costs
3,951,265
-
Operational provision
-
(201,119)
Impairment of fixed asset investments
21,683,562
-
25,634,827
(201,119)

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.

 

During the year the opportunity was taken to simplify the Group’s corporate structure which resulted in the Company acquiring, at book value, the trade, assets and liabilities of its subsidiary companies Norclad Timber Limited and AMA Timber Services Limited on 31 January 2023 and the trade, assets and liabilities of S.V. Timber Limited on 31 March 2023.

 

Following the acquisition of the trade, assets and liabilities of Norclad Timber Limited, AMA Timber Services Limited and S.V. Timber Limited and the subsequent distribution of reserves to the Company by way of a dividend receipt totalling £20,606,828, the Company’s investments in these subsidiaries were impaired. This resulted in an impairment loss being recognised of £21,683,562.

 

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
(17,762)
(63,898)
Fees payable to the company's auditor for the audit of the company's financial statements
73,244
66,000
Depreciation of owned tangible fixed assets
2,123,158
1,605,941
Loss on disposal of tangible fixed assets
688,571
8,770
Amortisation of intangible assets
600,000
600,000
Operating lease charges
7,080,903
5,132,214
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
6
Employees

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

2023
2022
Number
Number
Selling and distribution
710
614
Administration and management
295
258
Total
1,005
872

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
32,556,418
26,372,790
Social security costs
2,883,262
2,390,927
Pension costs
1,095,276
853,054
36,534,956
29,616,771
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
-
0
2,158
Income from fixed asset investments
Income from shares in group undertakings
20,871,749
-
0
Total income
20,871,749
2,158
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
101,377
255,596
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
32,847
Adjustments in respect of prior periods
(32,847)
-
0
Total current tax
(32,847)
32,847
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 23 -
Deferred tax
Origination and reversal of timing differences
684,000
725,000
Total tax charge
651,153
757,847

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
(6,347,444)
7,043,042
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(1,492,919)
1,338,178
Tax effect of expenses that are not deductible in determining taxable profit
5,154,060
22,995
Tax effect of income not taxable in determining taxable profit
(84,632)
(38,212)
Group relief
129,313
(880,451)
Permanent capital allowances in excess of depreciation
409,722
-
0
Adjustments in respect of financial assets
(1,858)
-
0
Other permanent differences
887
-
0
Under/(over) provided in prior years
(32,847)
-
0
Foreign exchange differences
(44,216)
-
0
Movement in deferred tax not recognised
1,585,209
-
0
Fixed asset difference
-
0
1,281
Change in unrecognised deferred tax
-
0
790
Effect of change in deferred tax rates
-
0
173,811
Other tax adjustments
56,212
132,402
Transferred from interco
(154,000)
-
0
Losses carried back
35,370
-
0
Group income
(4,909,148)
-
0
Restatement of cost of sales
-
0
7,053
Taxation charge for the year
651,153
757,847
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
6,316,366
Amortisation and impairment
At 1 January 2023
3,000,000
Amortisation charged for the year
600,000
At 31 December 2023
3,600,000
Carrying amount
At 31 December 2023
2,716,366
At 31 December 2022
3,316,366
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2023
6,852,347
22,467,364
6,553,263
35,872,974
Additions
2,232,590
1,913,551
728,006
4,874,147
Business combinations
525,883
660,649
77,038
1,263,570
Disposals
(727,604)
(1,139,566)
(145,401)
(2,012,571)
At 31 December 2023
8,883,216
23,901,998
7,212,906
39,998,120
Depreciation and impairment
At 1 January 2023
1,638,936
14,285,791
4,190,586
20,115,313
Depreciation charged in the year
448,715
1,175,430
499,013
2,123,158
Eliminated in respect of disposals
(193,568)
(932,758)
(60,860)
(1,187,186)
At 31 December 2023
1,894,083
14,528,463
4,628,739
21,051,285
Carrying amount
At 31 December 2023
6,989,133
9,373,535
2,584,167
18,946,835
At 31 December 2022
5,213,411
8,181,573
2,362,677
15,757,661

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

2023
2022
£
£
Plant and equipment
2,871,798
2,667,018
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
12
Fixed asset investments
2023
2022
£
£
Other investments
-
0
21,582,807
Movements in fixed asset investments
Other
£
Cost or valuation
At 1 January 2023
21,582,807
Additions
100,755
At 31 December 2023
21,683,562
Impairment
At 1 January 2023
-
Impairment losses
21,683,562
At 31 December 2023
21,683,562
Carrying amount
At 31 December 2023
-
At 31 December 2022
21,582,807
13
Subsidiaries

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

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
S.V. Timber Limited
England & Wales
Ordinary
100.00
-
Hymor Timber Limited
England & Wales
Ordinary
100.00
-
North Yorkshire Timber Company Limited
England & Wales
Ordinary
100.00
-
Norclad Limited
England & Wales
Ordinary
100.00
-
AMA Timber Services Limited
England & Wales
Ordinary
-
100.00
NYT (Holdings) Limited
England & Wales
Ordinary
100.00
-
Joseph Thompson & Co Limited
England & Wales
Ordinary
-
100.00
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
28,122,450
33,945,576
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
25,706,630
29,016,537
Amounts owed by group undertakings
3,500,839
4,393,979
Other debtors
751,172
317,771
Prepayments and accrued income
8,173,781
8,740,479
38,132,422
42,468,766
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
447,566
635,307
Trade creditors
22,517,305
28,700,050
Amounts owed to group undertakings
29,998,463
40,728,571
Corporation tax
66,412
32,847
Other taxation and social security
2,791,876
3,054,499
Other creditors
923,435
980,041
Accruals and deferred income
4,515,220
6,195,961
61,260,277
80,327,276

Securities of fixed and floating charges are held over the assets of the company in relation to liabilities of the parent company, National Timber Group Midco Limited.

17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
1,084,826
996,903
Other creditors
600,000
1,200,000
1,684,826
2,196,903
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
447,566
635,307
In two to five years
1,084,826
996,903
1,532,392
1,632,210
19
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,632,000
2,031,000
Short term timing differences
74,250
(18,000)
Other
-
154,000
2,706,250
2,167,000
2023
Movements in the year:
£
Liability at 1 January 2023
2,167,000
Charge to profit or loss
539,250
Liability at 31 December 2023
2,706,250
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,095,276
853,054

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
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:

2023
2022
£
£
Within one year
6,555,300
4,734,678
Between two and five years
21,706,399
8,322,612
In over five years
7,124,619
7,605,947
35,386,318
20,663,237
23
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
359,184
563,000

Capital commitments are Directors best estimate of costs to be incurred.

24
Related party transactions
Transactions with related parties

The company 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.

25
Ultimate controlling party

The company's immediate parent company is National Timber Company Midco Limited.

During the year and through to 13 January 2025, the company's ultimate parent undertaking was National Timber Group Topco Limited, a company registered in England and Wales. The ultimate controlling party was Cairngorm Capital Partners II LP, a fund managed by Cairngorm Capital Partners LLP, a partnership registered in England and Wales. During the year, the group was headed by National Timber Group Topco Limited which was the smallest and largest group in which the results of the company were consolidated.

 

Following the financial restructuring of the Group, which concluded on 13th January 2025, the ultimate controlling partying became Sylvan Span LLC, a limited liability company incorporated in Delaware, USA and managed by Pricoa Private Capital. As a result of the restructuring, National Timber Group Midco became the smallest and largest group in which the results of the company are consolidated.

 

NATIONAL TIMBER GROUP ENGLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
26
Post balance sheet events

On 13 January 2025, the Company’s immediate parent, National Timber Group Midco Limited, successfully 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 its subsidiary companies, including National Timber Group England Limited.

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 the Company and wider National Timber Group with a solid platform upon which to deliver its planned strategic growth in markets which remain subdued.

27
Prior period adjustment

 

Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Current assets
Stocks
35,713,847
(1,768,271)
33,945,576
Capital and reserves
Profit and loss reserves
35,140,257
(1,768,271)
33,371,986

 

Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Cost of sales
(139,283,351)
(37,120)
(139,320,471)
Profit for the financial period
6,322,315
(37,120)
6,285,195

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 Company'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 £28,122,450 is net of rebate amount of £1,520,785.

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