Company registration number 04234695 (England and Wales)
LJJ LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
LJJ LTD
COMPANY INFORMATION
Directors
Mr S J Baines
(Appointed 1 April 2024)
Mr J R Daly
Mr I Rennison
Mr J Rennison
Mr L Rennison
Mr I Weedall
(Appointed 1 August 2023)
Secretary
Mr S J Baines
Company number
04234695
Registered office
Richmond House
107 Bowesfield Lane
Stockton on Tees
TS18 3HF
Auditor
Azets Audit Services
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
Solicitors
Endeavour Partnership LLP
Tobias House
St. Marks Court
Teesdale Business Park
Stockton-On-Tees
United Kingdom
TS17 6QW
LJJ LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Directors' responsibilities statement
7
Independent auditor's report
8 - 10
Income statement
11
Statement of comprehensive income
12
Statement of financial position
13
Statement of changes in equity
14
Notes to the financial statements
15 - 25
LJJ LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -

The directors present the strategic report for the year ended 31 July 2024.

Principal activities

The principal activity of the company continued to be that of electrical and mechanical installation contractors.

Review of the business

The company continued to consolidate and strengthen its relationship with its existing client base and introduced a more selective policy on clientele during this year. New work continues to be mainly achieved through referrals and recommendations and we now have selective criteria for the client base from the introduction of new clients. The company's continued investment in training and information technology ensures that group continues to be at the forefront of any technological advances.

 

We continue the policy of employing people with the relevant expertise and ethos of partnering which will continue to enable the business to improve on its already strong market position.

 

Turnover for the business positively increased by circa 26% on last year outperforming the industry average and sales where focused on working with the right clients on the right projects. The Global economy encountered many challenges due to inflation, conflict and trade disputes. This resulted in many jobs being extended into the next financial year and as everyone knows, the cost of such overruns ends up being borne by everyone in the industry. However, the board feel now the business as accounted for all its previous legacy projects, with secured orders at record levels for 24-25. This will give the company the springboard to return to results previously enjoyed in the last 20 years. Having overcome and put behind us the challenges of a very difficult environment last year, we now continue to look forward to our next financial year with optimism and confidence once again.

Principal risks and uncertainties

The company's business covers the building services sector of construction within the United Kingdom. Performance of the business is influenced by local economic factors as well as more global factors where construction plays a major role throughout the world. The world economy has been subject to significant uncertainty in recent years with some difficult trading conditions experienced globally. International conflicts throughout the world have interrupting the supply of goods in construction as well as general trade. The effect of the Covid 19 pandemic established the vulnerability for everyone in construction for such rare events, however, the Construction Industry is now much more prepared for such factors. The resulting economic downturn and inflationary measures that followed Covid 19 also added to a very challenging time in the Industry. With the above experiences now generally behind us, it is less obstacles for the Construction Industry to manoeuvre in the future, however, the Industry is much more aware and prepared for such factors, should there be repeated in the future. Overall, there are still a number of principle risks and uncertainties associated with the construction market that currently need to be considered and navigated, including Inflation, which continues to be a major factor in the financial markets. The challenges associated with inflation will continue to be carefully managed in the coming year. Overall, considerable care still needs to be taken with regards to the type, duration and value of contracts that will be taken on for the future.

Key performance indicators

The company's key financial and other performance indicators were as follows:

            Unit        2024        2023

Turnover        £      58,688,893     46,563,390

Gross profit margin    %         17         15

Employee numbers    No.         103         127

LJJ LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
Other information and explanations

Future developments

Our goal is to facilitate the continued development of our operations across the country and to continue to structure our business accordingly. We will take advantage of the many opportunities that continue to arise, building on the excellent working relationships and repeat trading with our more selective number of clients. The coverage of our network throughout the UK is served by our existing offices in Stockton-on-Tees, Coventry, and High Wycombe. The ongoing consolidation of LJJ in all our existing offices provides our clients with comprehensive coverage of the UK. All offices remain busy and we continue to nurture the key relationships with our selective clients from all our offices. The maintenance facility for LJJ continues to develop well with lots of new opportunities being developed with our clientele. This facility allows our clients to continue to utilise LJJ's services well after the construction phase is completed and this is something that we will continue to develop further during 2025.

Section 172 (1) statement

The company's board believe that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 July 2024.

 

Material decisions taken by the Board in the year include approval of forecast and strategies, a review of corporate financing activities and subsequent strategic review, internal promotions and the continuous development of our staff.

 

LJJ Ltd is a UK business which depends on the trust and confidence of its stakeholders to operate sustainably in the long term. The company seeks to puts its customers' best interests first, invests in its employees, supports the communities in which it operates and strives to generate sustainable profits for shareholders.

Engagement with employees

LJJ Ltd's people is key to its success. Our people help us maintain our strong reputation for high standards of business conduct that are fundamental to the delivery of our strategic plan. The directors recognise the importance of the staff by offering careers with real value, access to professional development initiatives and the chance to be involved in shaping the future of this dynamic business.

 

We aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and well-being of our employees in one of our primary considerations in the way we do business. Competitive training programmes and personal development schemes are provided to help our staff reach their goals. Recognition of achievement is embedded in the group culture.

 

Our staff is regularly involved in evaluating the business progress against targets and they play a crucial role in delivering against our strategy and creating value. It is also our responsibility as a Board to manage our people's performance and develop and bring through talent whilst ensuring we operate as efficiently as possible.

 

Engagement with suppliers, customers and other relationships

As the Board of directors, our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours. This is reflected in the "4 pillars" of our company, Integrity, Respect, Loyalty and Reliability. These values have been chosen by the staff and have Trust at their foundation.

 

The company regularly reviews the financial health of its clients to ensure that we are only working for robust, strong companies and any companies that are less than financially sound, exposure is closely monitored and strict financial terms and conditions are imposed.

LJJ LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 3 -

On behalf of the board

Mr L Rennison
Director
24 February 2025
LJJ LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 4 -

The directors present their annual report and financial statements for the year ended 31 July 2024.

Results and dividends

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

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

Directors

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

Mr S J Baines
(Appointed 1 April 2024)
Mr J R Daly
Mr I Rennison
Mr J Rennison
Mr L Rennison
Mr I Weedall
(Appointed 1 August 2023)
Financial instruments

The company's operations expose it to a variety of financial risks that include customer relationships, liquidity risk, interest rate risk and credit rating risk. Whilst LJJ is in a very strong position, with good liquidity, high credit rating and blue chip clients, we will remain vigilant as the construction market picks up pace.

Liquidity Risk

The company's policy aims to ensure that an appropriate amount of reasonably priced funding is availble to meet both current and future requirements. It aims to ensure that there is always at least a fixed level of headroom between the amount of banking facilitiies available and those that are being used at present and for the foreseeable future. Each year facilities are reviewed in light of current and ongoing requirements.

Interest Rate Risk

At present the company is not exposed to any interest rate risk as the level of borrowing on LJJ is minimal at any point throughout the year. The company tends to manage its cash flow position exceptionally well which mitigates the chance of any interest rate rise risk.

Credit Risk

The principal credit risk arises from the company's trade debtors. The company's finance team manages credit risk through a combination of payment history and third party credit reference agencies. Credit limits are regularly reviewed.

Client Relationships

The company regularly reviews the financial health of its clients to ensure that we are only working for robust, strong companies and any companies that are less than financially sound, exposure is closely monitored and strict financial terms and conditions are imposed.

Auditor

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.

LJJ LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 5 -
Energy and carbon report

In line with the Companies (Director's Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 our energy use and greenhouse gas (GHG) emissons are set out below. The data relates to UK emissions for the 12-month period from 1 August 2023 to 31 July 2024.

2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
561,048
865,304
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
17.00
15.00
- Fuel consumed for owned transport
16.00
28.00
33.00
43.00
Scope 2 - indirect emissions
- Electricity purchased
24.00
27.00
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the
66.00
123.00
Total gross emissions
123.00
193.00
Intensity ratio
Tonnes C02e per £m turnover
2
4
Quantification and reporting methodology

The boundaries of this report are based on operational control. We report our emissisons with reference to the latest Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol). In accordance with the 2018 Regulations, the energy use and associated greenhouse gas emissions are for those within the UK only that come under the operational control boundary. The 2023 UK Govenement GHG Conversion Factors for Company Reporting published by the UK Department for Environment Food & Rural Affairs (DEFRA) are used to convert energy use in our operations to emissions of C02e. Carbon emission factors for purchased electricity calculated according to the 'location-based grid average' method. This reflects the average emission of the grid where the energy consumption occurs. Data sources include billing, invoices and internal systems. Assumptions include, and are limited to, all unknown vehicle types assigned to be diesel medium for company cars and average sized petrol for grey fleet, in alignment with previous years analysis.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m turnover, the recommended ratio for the sector.

Measures taken to improve energy efficiency

We continue to replace our fleet of company vehicles with electric vehicles.

 

We have introduced the use video calls for meetings and beyond our immediate footprint, we aim to influence our employees to reduce commuting emissons through provision of bike sheds and supporting the cycle to work scheme.

LJJ LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 6 -
Statement of disclosure to auditor

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

On behalf of the board
Mr L Rennison
Director
24 February 2025
LJJ LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 7 -

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.

LJJ LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LJJ LTD
- 8 -
Opinion

We have audited the financial statements of LJJ LTD (the 'company') for the year ended 31 July 2024 which comprise the income statement, the statement of comprehensive income, the statement of financial position, 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:

LJJ LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LJJ LTD
- 9 -
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.

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.

LJJ LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LJJ LTD
- 10 -

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.

 

Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law and compliance with the UK Companies Act.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

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.

Claire Hinshaw ACCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
25 February 2025
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
LJJ LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
2024
2023
Notes
£
£
Turnover
3
58,688,893
46,563,390
Cost of sales
(48,798,036)
(39,712,682)
Gross profit
9,890,857
6,850,708
Administrative expenses
(9,984,567)
(6,769,023)
Operating (loss)/profit
4
(93,710)
81,685
Interest receivable and similar income
104,966
48,471
Profit before taxation
11,256
130,156
Tax on profit
8
23,846
7,312
Profit for the financial year
35,102
137,468

The income statement has been prepared on the basis that all operations are continuing operations.

LJJ LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
2024
2023
£
£
Profit for the year
35,102
137,468
Other comprehensive income
-
-
Total comprehensive income for the year
35,102
137,468
LJJ LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 JULY 2024
31 July 2024
- 13 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
37,458
80,225
Current assets
Debtors
10
22,405,291
27,862,199
Cash at bank and in hand
5,365,265
3,061,323
27,770,556
30,923,522
Creditors: amounts falling due within one year
11
(17,911,863)
(21,290,911)
Net current assets
9,858,693
9,632,611
Total assets less current liabilities
9,896,151
9,712,836
Creditors: amounts falling due after more than one year
12
(1,274,668)
(1,126,455)
Net assets
8,621,483
8,586,381
Capital and reserves
Called up share capital
15
74,069
74,069
Capital redemption reserve
26,111
26,111
Profit and loss reserves
8,521,303
8,486,201
Total equity
8,621,483
8,586,381
The financial statements were approved by the board of directors and authorised for issue on 24 February 2025 and are signed on its behalf by:
Mr L  Rennison
Director
Company Registration No. 04234695
LJJ LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 14 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 August 2022
74,069
26,111
8,348,733
8,448,913
Year ended 31 July 2023:
Profit and total comprehensive income for the year
-
-
137,468
137,468
Balance at 31 July 2023
74,069
26,111
8,486,201
8,586,381
Year ended 31 July 2024:
Profit and total comprehensive income for the year
-
-
35,102
35,102
Balance at 31 July 2024
74,069
26,111
8,521,303
8,621,483
LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 15 -
1
Accounting policies
Company information

LJJ Ltd is a private company limited by share capital, incorporated in England and Wales. The address of its registered office is Richmond House, 107 Bowesfield Lane, Stockton-on-Tees, TS18 3HF.

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 £.

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 LJJ Holdings Limited. These consolidated financial statements are available from its registered office, Richmond House, 107 Bowesfield Lane, Stockon-On-Tees, TS18 3HF.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and 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.

 

Contract revenue recognition

It is the company's policy to recognise profits per contract according to a predicted final result based on the costs expended rather than sales applied for, Most contracts will start at the tender profit margin. Contracts are reviewed on a monthly basis by the management team and an adjustment is made to the applied sales based on the actual costs incurred to bring the turnover in line with the predicted margins until accounts have been agreed on contracts. The total adjustment (to the applied sales) is shown on the accounts as "Long term contracts - payments received on account". Any bad debts or concerns have been reflected in the final margins.

 

The total of "Application Debtors" is included in trade debtors as this is based on Applied Sales.

 

Sales retentions

Sales retentions relates to balances that are retained by customers until they are satisfied that the contracted works have been completed to a satisfactory standard.

 

The total of "Sales retentions debtors" is included within trade debtors in the accounts as they relate to Applied Sales.

 

1.4
Tangible fixed assets

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

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

Fixtures and fittings
15%-33% reducing balance and 33% straight line
Motor vehicles
25%-33% 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.

1.5
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.

1.6
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
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.

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.

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.

Basic financial liabilities

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

 

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

 

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

Derecognition of financial liabilities

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

1.7
Equity instruments

Equity instruments issued by the company 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 company.

1.8
Taxation

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

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 18 -
Current tax

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

Deferred tax

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

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.9
Retirement benefits

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current or prior periods.

 

Contributions to defined contribution plans are recognised as an employee benefit expense when they are due. If the contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

1.10
Leases

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

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Long term contracts

The directors account for long term contracts using the stage of completion method as the contract progresses. The method requires judgement to accuratley estimate the extent of progress towards contract completion and may involve estimates of total contract costs to completion, total revenues, contract risks and other judgements.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Electrical & Mechanical Installation Contracts
58,688,893
46,563,390
2024
2023
£
£
Other revenue
Interest income
104,966
48,471
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
37,055
49,965
Bad and doubtful debts
3,930,795
10,500
Profit on disposal of tangible fixed assets
(9,466)
-

The bad and doubtful debts in 2024 relate to a historic contract which reached an agreed settlement during the year.

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 20 -
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,800
20,000
For other services
Taxation compliance services
625
550
Other taxation services
-
0
12,000
625
12,550
6
Employees

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

2024
2023
Number
Number
Office and Management
71
83
Mechanical and Electrical
32
44
Total
103
127

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
5,916,421
6,704,533
Social security costs
644,336
755,726
Pension costs
112,896
128,183
6,673,653
7,588,442
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
416,273
336,473
Company pension contributions to defined contribution schemes
12,189
10,868
428,462
347,341

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
7
Directors' remuneration
(Continued)
- 21 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
115,331
109,604
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
23,725
-
0
Adjustments in respect of prior periods
(47,812)
-
0
Total current tax
(24,087)
-
0
Deferred tax
Origination and reversal of timing differences
241
(7,312)
Total tax credit
(23,846)
(7,312)

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

2024
2023
£
£
Profit before taxation
11,256
130,156
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.01%)
2,814
27,346
Tax effect of expenses that are not deductible in determining taxable profit
15,725
9,405
Tax effect of income not taxable in determining taxable profit
-
0
(23,386)
Adjustments in respect of prior years
(47,812)
-
0
Depreciation on assets not qualifying for tax allowances
2,113
-
0
Deferred tax adjustments in respect of prior years
3,391
-
0
Deferred tax credit relating to changes in tax rates or laws
-
0
(1,060)
Tax decrease from other short-term timing differences
-
0
(19,617)
Fixed asset differences
(77)
-
0
Taxation credit for the year
(23,846)
(7,312)
LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 22 -
9
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 August 2023
480,155
139,104
619,259
Additions
8,830
-
0
8,830
Disposals
-
0
(59,056)
(59,056)
At 31 July 2024
488,985
80,048
569,033
Depreciation and impairment
At 1 August 2023
445,040
93,994
539,034
Depreciation charged in the year
14,731
22,324
37,055
Eliminated in respect of disposals
-
0
(44,514)
(44,514)
At 31 July 2024
459,771
71,804
531,575
Carrying amount
At 31 July 2024
29,214
8,244
37,458
At 31 July 2023
35,115
45,110
80,225
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
19,286,274
24,447,475
Gross amounts owed by contract customers
1,474,955
1,504,449
Corporation tax recoverable
-
0
233,647
Amounts owed by group undertakings
267,811
330,641
Other debtors
782,380
885,868
Prepayments and accrued income
590,314
456,321
22,401,734
27,858,401
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 13)
3,557
3,798
Total debtors
22,405,291
27,862,199

Details of non-current trade and other debtors

£3,082,060.36 (2023 - £1,551,437) of trade debtors classified as non current.

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 23 -
11
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
8,698,743
9,097,508
Gross amounts owed to contract customers
7,919,160
11,053,066
Amounts owed to group undertakings
-
0
12,330
Corporation tax
23,725
-
0
Other taxation and social security
231,540
308,450
Other creditors
966,636
749,983
Accruals and deferred income
72,059
69,574
17,911,863
21,290,911
12
Creditors: amounts falling due after more than one year
2024
2023
£
£
Trade creditors
1,274,668
1,126,455
13
Deferred taxation

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

Assets
Assets
2024
2023
Balances:
£
£
Tax losses
3,557
3,798
2024
Movements in the year:
£
Asset at 1 August 2023
(3,798)
Charge to profit or loss
241
Asset at 31 July 2024
(3,557)

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
14
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
112,896
128,183

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.

 

Contributions totalling £18,146 (2023 - £25,146) were payable to the scheme at the end of the year and are included within creditors.

15
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
74,000
74,000
74,000
74,000
Ordinary B shares of £1 each
69
69
69
69
74,069
74,069
74,069
74,069
16
Reserves

Share capital

Share capital represents the nominal value of the share capital redeemed in 2015.

 

Capital redemption reserve

This reserve records the nominal value of the share capital redeemed in 2015.

 

Profit and loss account

The reserve records retained earnings and accumulated losses.

 

17
Operating lease commitments
Lessee

Amounts recognised in profit or loss as an expense during the period in respect of operating lease arrangements was £187,557 (2023 - £200,419).

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

2024
2023
£
£
Within one year
232,537
266,016
Between two and five years
212,182
376,446
444,719
642,462
LJJ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 25 -
18
Contingent liabilities

The company has provided a guarantee in respect of certain liabilities of LJJ Holdings which, at 31st July 2023, amounted to £Nil (2023 - £Nil).

 

There is a Composite Company Multilateral Guarantee given by the company and LJJ Holdings Limited in respect of bank borrowings which, at the balance sheet date, amounted to £Nil (2023 - £Nil).

 

There is a debenture including fixed charge over all present freehold and leasehole property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertaking both present and future in respect of bank borrowings, which at the balance sheet date, amounted to £Nil (2023 - £Nil).

19
Related party transactions
Transactions with related parties

The Company has taken advantage of the exemption available under 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.

 

During the year the company purchased goods in the normal course of business totalling £832,865 (2023 - £332,215) from Clear Climate Limited, a company under common control. In addition, the company sold goods of £12,352 (2023 - £10,945). At the balance sheet date amounts owed to Clear Climate Limited totalled £92,925 (2023 - £80,159).

 

During the year the company sold goods in the normal course of business totalling £1,656 (2023 - £1,024) to the Slobbery Dog Raw Limited, a company under common control.

20
Ultimate controlling party

The company's immediate parent is LJJ Holdings Limited, incorporated in England and Wales.

 

These financial statements are available upon request from Companies House.

The ultimated controlling party is LJJ Trustee Limited on behalf of the LJJ Employee Ownership Trust.

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