The directors present the strategic report for the year ended 30 April 2024.
The accounts of the group have been prepared on a consolidated basis (see note 1.2 to the financial statements for the basis of consolidation) and our business review is based upon the consolidated financial statements. Our review is consistent with the size and nature of the business and is written in the context of the risks and uncertainties we face. We consider that our key financial performance indicators are those that communicate the financial performance and strength of the group as a whole, these being turnover, gross profit and return on capital employed.
Turnover has decreased by 0.92% (2023 - 28.7%) in comparison to last year. The gross profit margin has increased by 0.7% percentage points to 25.9%.
Group operating profit has decreased to £1,479,203 (3.8%) in comparison to last year (£1,936,162 - 4.7%), and the group profit before tax has decreased to £451,599 (2023 - £1,286,787). After taxation and dividends £115,121 has been added to reserves.
Return on capital employed has decreased to 5.2% (2023 - 7.4%). Return on capital employed is calculated as profit before tax and interest divided by capital employed. Capital employed is calculated as total assets less current liabilities.
The directors consider the following are the main KPIs underpinning the performance of the business:
2024 2023
Turnover £41,835k £41,611k
Gross Profit % 25.6% 25.2%
EBITDA £5,264k £5,905k
EBITDA less vehicle depreciation £2,612k £3,264k
The principal uncertainty facing the business relates to the price of fuel, however the company uses variable fuel surcharges to mitigate this risk.
The continued risk of the well published HGV driver shortage creates uncertainty, but the company is well placed with to handle this with various schemes to introduce drivers into the industry.
The likely consequences of any decision in the long term
Decisions are made with risk adversity and carefully thought out short, medium and long term impacts in mind. Expansion of our operations with the opening of a depot at Frontier Park ensures jobs are created not only for the local area, but also with promotion opportunities internally for employees. The investment in IT infrastructure to link our depots across Lancashire, the Midlands and South Wales gives solidarity to our operations for the future.
The interests of the group's employees
Health and Safety remains at the top of the agenda at all management reviews and is a focus for continual improvement, including topical safety campaigns and best in class processes. Annual salary/wage reviews ensure we are attracting and rewarding the best possible employees, who are offered both compulsory and optional training to ensure knowledge and skills are developed.
The need to foster the group's business relationships with suppliers, customers and others
Constant communication is in place with customers detailing KPIs and operational reviews where necessary. Customer satisfaction surveys are used to target areas for improvement and results with corrective action feedback to customers. Likeminded suppliers work in similar ways with regular review meetings to ensure we have continuation of services and supply.
The impact of the group's operations on the community and the environment
A structured fleet renewal policy aids investment in the latest vehicles to help cut emissions, whilst investment in telematics gives visibility to areas of improvement in vehicle usage and driving style. A structure and realistic ESG policy has been created to guide the business on the road to Net Zero Membership of the Burnley Bondholders continues to ensure we have a presence and input to the decisions being made in our local area. Sponsorships have been renewed with local sporting organisations, and the support of Blackburn Youth Zone Patrons Network helps to ensure a strong community and prospects for future generations.
The desirability of the group maintaining a reputation for high standards of business conduct
Both quality accreditations (BRCGS and Soil Association Organic Storage and Distribution) have again been awarded following successful audits with the highest standards being achieved. The board continuously spreads the message through regular management meetings that honesty and integrity are at the heart of our business.
The need to act fairly as between members of the group
The Executive Directors hold a controlling share of the business with other shareholders being close family members. The goals of the directors are fully aligned with the shareholders and this message is passed throughout the business through a tight and well structure organisation and levels of delegation.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2024.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £540,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group’s principal financial instruments comprise bank balances, trade debtors, trade creditors, loans and hire purchase contracts. The main purpose of these instruments is to finance the group's operations.
In respect of bank balances, the liquidity risk is managed by maintaining a balance where necessary between the continuity of funding and flexibility through the use of overdrafts and invoice discounting at floating rates of interest.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.
Loans comprise loans from the group’s bank, and other financial institutions. The group manages the liquidity risk by ensuring that there are sufficient funds to meet the payments due under the terms of the loans.
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.
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The results above exclude the small companies of the group who are exempt from the requirement to disclose the above information.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1,000,000 of turnover.
Fagan & Whalley Holdings Limited is committed to minimising its impact on climate change. The requirements of reducing Scope 1, 2 and 3 emissions is well understood by Fagan & Whalley Holdings Limited. During the financial year, the directors have monitored the amount of energy used in various processes across the business.
Energy savings during the financial period
During the financial reporting period, Fagan & Whalley Holdings Limited have explored ways of reducing their scope 2 and 3 emissions. The following energy efficiency improving measures have been carried out.
Fleet additions
Our fleet renewal policy ensures we are continuously purchasing modern vehicles which meet the latest emissions tests. Investment in telematics from Microlise ensures vehicles are being driven to the optimal standard.
Alternative Fuels
Investments in electrification of MHE continued this year, with all northern depots being 100% electric. Fleet cars are either BEV or PHEV, with trials ongoing for HGV electrification. HVO has been trialed this year with positive results. Solar plans are being developed for 2025.
We have audited the financial statements of Fagan & Whalley Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 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).
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
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 £1,485,503 (2023 - £596,909 profit).
Fagan & Whalley Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Mead Way, Padiham, Burnley, Lancashire, United Kingdom, BB12 7NG.
The group consists of Fagan & Whalley Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of Fagan & Whalley Holdings Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method.
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Fagan & Whalley Limited has been included in the group financial statements using the merger method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Fagan & Whalley Limited.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
The directors have considered the financial stability of the Group for a period of at least 12 months from the date of signing these accounts. They have assessed financial performance since the year end and ensured that the Group remains profitable, with a cash position that continues to strengthen. These factors demonstrate that the group will remain sustainable.
Although it is not anticipated this will be necessary, the group has significant assets against which it could secure new finance to support any additional cashflow requirements, were this to be required.
The directors consider it appropriate that the accounts are prepared on the going concern basis. These accounts do not include any adjustments that may be required should the going concern basis of preparation not be appropriate.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Freehold and long leasehold land is not depreciated.
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.
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.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
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, which include debtors and cash and bank balances, are measured at transaction price including transaction.
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.
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, including creditors and bank loans, are recognised at transaction price.
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 at transaction price.
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.
The tax expense represents the sum of the tax currently payable and deferred 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
The group's results are materially impacted by the application of the its depreciation policies, which are based on the expected useful life of its tangible fixed assets. The directors' estimates of useful life are subject to estimation uncertainty. The degree of uncertainty related to motor vehicles is reduced significantly as they are typically depreciated over a fixed hire purchase contract period.
The value of the company's investment property is subject to estimation uncertainty. The directors determine fair value by reference to independent professional valuations.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Investment property comprises land and buildings near Padiham, Lancashire, previously classified within tangible fixed assets. The fair value of the investment property has been arrived at on the basis of a valuation carried out by Cluttons, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's subsidiaries at 30 April 2024 are as follows:
Details of joint ventures at 30 April 2024 are as follows:
The financial period end of Farralls & Fagan & Whalley Limited is 31 December. The trading address of the entity is Ashton Lane, Ashton, Chester, Cheshire, CH3 8AA.
The shareholding in Farralls & Fagan & Whalley Limited is held by Fagan & Whalley Limited.
The group share of profits of Farralls & Fagan & Whalley Limited is (£79,920) (2023 - £24,183).
Other creditors includes £1,721,740 (2023 - £2,058,409) owed in respect of an invoice discounting facility. The liability is secured on the book debt of the company.
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.
The Company is party to a cross guarantee, supported by debentures, with its subsidiary company Fagan & Whalley Limited.
The bank borrowings of the Group are secured by a fixed and floating charge over the assets of the Group in the form of a debenture in favour of Yorkshire Bank, dated 1 February 2012 and legal charges over certain of the Group's properties.
Obligations under hire purchase contracts are secured on the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above relates to accelerated capital allowances.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
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:
Amounts contracted for but not provided in the financial statements:
Summary of transactions with joint venture
The Group is party to a joint venture in Farralls & Fagan & Whalley Limited.
During the year, the Group sold goods and services with a value of £2,837,872 (2023- £2,596,204) to Farralls & Fagan & Whalley Limited. At the balance sheet date the amount due from Farralls & Fagan & Whalley Limited, and included in trade debtors, was £296,785 (2023 - £218,959).
Summary of transactions with other related parties
The Group has entered into transactions with its pension scheme, The Fagan and Whalley Pension Scheme, during the year.
The Group was charged rent by the pension scheme during the year amounting to £184,000 (2023 - £184,000). At the balance sheet date, the amount owed to the company from the pension scheme, included within other debtors, was £145,490 (2023 - £287,364).
During the year, the company acquired land from the pension scheme at a cost of £1,000,000.
Dividends totalling £540,000 (2023 - £480,000) were paid in the year in respect of shares held by the company's directors.
Group
At the balance sheet date, the amounts due to directors was £nil (2023 - £28,771), included within creditors due within one year. At the balance sheet date, the amounts due from the directors was £57,482 (2023 - £46,015), included within debtors due within one year.
These amounts are unsecured and repayable on demand. The maximum amount advanced to the Directors during the period was £136,940 (2023 - £49,041).
Interest has been charged at a rate of 2.25% per annum on monies advanced to Directors.