The directors present the strategic report for the year ended 31 May 2024.
Financial performance
Gross profit was £2.0m (2023 - £1.3m) and profit before taxation was £0.7m (2023 - £0.2m). Profit before tax reflects the growth in operations and interest income.
We continue to focus on quality led technology, processes, and support services to fulfil our strategy across the Giant Precision Group of companies of providing compliance driven global workforce solutions via our cloud-based, end to end proprietary software and managed services.
The company continues to invest in operations, IT and sales team for future growth.
The company's key financial and other performance indicators during the year are as follows:
2024 2023
£ £
Turnover 169,284,273 162,772,522
Gross profit 2,045,979 1,289,741
Profit before tax 709,542 151,250
Through ongoing service innovation and deep understanding of clients and market needs, Giant continues to deliver a straightforward, compliant service to all clients.
We strictly adhere to the international security standard (held by parent company "Giant Precision Limited") ISO 27001 to keep sensitive data safe and comply with GDPR. This helps protect us from financial and reputation risks. We also meet ISO 9001 standards for quality and ISO 14001 for environmental management. Our parent company holds these important certifications, which help us operate effectively and manage risks. The most recent compliance audit conducted for the parent company was completed in October 2023.
Investment in our business
Our investment planning and decision-making process takes into account both our clients' needs and our solutions. We maintain a strong focus on quality processes and staff training to excellent exceptional customer service.
We continue to invest in our business to keep pace with evolving tax and employment legislation, meet client requirements, and continuously enhance our information technology capabilities.
Investment in our communities
Our company remains committed to supporting our communities where we can either via our key customers or suppliers or from our contacts within the local business community.
Vision of the future
Our strategy across Giant Precision Contracts Limited continues to provide an outsourced PAYE payroll and payment services, coupled with providing dedicated support to individual contractors in relation to payroll and payment processing.
Directors are firm in their conviction that group is responsible for maintaining exemplary customer service, driving continuous innovation, and upholding core compliance values. These commitments are vital for sustaining and boosting revenue growth in the coming years.
Going concern
Management’s attention is given to the cash flow forecast on a daily basis. The Board is satisfied that the cash flow forecasts for the period of 12 months from the date of signing the financial statements show that the Company can meet its liabilities as they fall due.
Corporate social responsibility
The parent company (Giant Precision Limited) holds ISO 14001 certification demonstrating its commitment to reducing its impact on the environment and providing assurance to management and employees as well as external stakeholders that its environmental impact is being measured and improved.
Charitable Donations
The company has continued with "giant giving" - its charitable initiative. The primary chosen charity is the Great Ormond Street Hospital (GOSH), who the Company has entered a corporate partnership with and is committed to raising both donations and awareness of the hospital.
Principal risks and uncertainties
Our regular meetings at various management levels across the business continue to operate an effective corporate governance system to identify and evaluate the key business risks against the strategic objectives in place.
Our market sectors, competitors, partnerships, and the impact of political decisions may influence our trading activity and therefore primary sources for risk assessments.
Risk Management
Price risk
Within a highly competitive industry, price risk remains a focus. As a result, the company is continually engaged in understanding the competitive landscape by studying existing market offerings and assessing various pricing strategies.
Liquidity Risk
The company oversees all facets of its cash needs to guarantee ample liquid resources for meeting operational requirements. During periods of elevated interest rates and robust cash reserves, the business has effectively utilised deposit rates to generate a substantial amount of interest income throughout the financial year.
Credit risk
The company proactively manages its credit risks to ensure the stability of its financial position and protect against potential disruptions to cash flows. The company diligently assesses the creditworthiness of both new and existing customers by evaluating their credit scores, payment history, and any other relevant external factors.
Furthermore, the risk of delayed or non-payments persists due to unfavorable economic conditions or challenges in industry. As a result, appropriate credit limits are established at the outset of any new customer relationship, and credits provided outside of standard terms are only extended when a relevant credit insurance plan is in place.
Cash flow risk
The Company finances its operations through a mixture of retained profits and cash balances. It operates a treasury function appropriate for the sale and complexity of its business, which is responsible for managing the regulatory, liquidity and credit risks. Cash flow forecasting serves as one of the important functions performed by the finance team where weekly, monthly, and quarterly forecasts are regularly monitored, and necessary measures are undertaken.
Foreign currency risk
Currently the exchange risk for the company is relatively low as the company predominately trades in pounds sterling.
Data Protection and Cybersecurity risk
We have implemented extensive security controls within our information infrastructure and conduct comprehensive training to familiarise our employees with the latest GDPR requirements, specific risks, scenarios, and the preventive/corrective actions to be undertaken. Keeping up with strong, scalable functional frameworks is significant in an exceptionally transactional business. The company takes the issue of network protection very seriously due to which we have undertaken extensive penetration testing of frameworks, fortified information back-up processes and invested in new hardware and firewall infrastructures.
Inflation risk
In the present economic environment, the company faces the risk of inflation. Ongoing vigilance is maintained regarding the uncertainties stemming from the deceleration in the UK economy. To mitigate the risk associated with inflation, the company persists in diversifying both its client base and income sources.
SECTION 172(1) STATEMENT
This section of the Strategic Report outlines how the directors have considered the matters stated in Section 172(1) of the Companies Act 2006 ('s172') while fulfilling their duty to promote the success of the company for the benefit of its shareholders. The Board acknowledges its obligations to enhance the firm's performance for the benefit of its members and all other stakeholders, who play a crucial role in the ongoing success of the company. The board ensures fair and equitable treatment of all stakeholders to ensure sustained business success. Regarding the matters outlined in Section 172 of the Act, the directors believe they have acted in good faith to advance the group's success on behalf of the stakeholders. We consider our employees, clients, suppliers, and regulatory bodies as the main stakeholders and the engagements we have with them are outlined below:
Employee interest
In discharging our duties as directors of Giant Precision Group, we acknowledge and consider the importance of our employees as an integral factor in the long-term growth and success of the company. Hence, we are devoted to making sure that the company succeeds in the long run, benefiting everyone, including our employees.
When making decisions that may affect employees, we focus on their working conditions, diversity and inclusion, and growth opportunities. We understand that a motivated and skilled workforce is key to our company's success.
We are also committed to engaging with employees through various channels, including internal newsletters, notice boards, the intranet, and surveys. These communication methods will ensure that their perspectives and concerns are considered when making strategic decisions that may affect them. Additionally, our commitment extends to corporate training programs, health and safety initiatives, and biannual appraisals. These measures aim to enhance employee well-being, skill development, and overall job satisfaction.
This collaborative approach reflects our commitment to maintaining a positive and inclusive working environment.
Clients
As directors of the company, we acknowledge that our clients are our most valuable assets, standing as one of the prime pillars towards our growth and the primary driving force behind our ability to innovate.
We are deeply committed to prioritising the interests and satisfaction of our clients in every decision and action we undertake. Our commitment to client interests encompasses the following:
Competitive Product Offerings: We strive to provide competitive and innovative products/services that meet or exceed the expectations of our clients.
Customer Relations: We recognise the importance of maintaining strong relationships with our clients. We do this by maintaining open lines of communication, addressing concerns promptly, and actively seeking feedback to enhance our services.
Access to Service and Support Staff: We are committed to providing accessible and responsive service and support staff, ensuring that our clients have a reliable and efficient channel for assistance and guidance.
Information and Transparency: We are committed to maintaining a high level of transparency in our interactions with clients, providing accurate and timely information where necessary.
Client feedback is also essential to our commitment towards continuous improvement. We actively seek and value the insights of our clients.
By upholding these principles, we aim to align our services with client expectations, fostering a climate of trust and mutual success.
Suppliers
We place a high value on maintaining positive relations with our suppliers, recognising their indispensable role in our service delivery.
Our commitment to these relationships is reflected in the following principles:
Fair Payment Practices: We are committed to ensuring that our suppliers are paid fairly and promptly for their goods and services, following the best payment practices as prevailing in the industry.
Transparent Communication: We prioritise clear and open communication with our suppliers to foster collaboration and understanding of expectations.
Fair Payment Terms: We promise to maintain fair payment terms in line with industry standards, aiming for mutually beneficial and positive relationships with our suppliers.
By following these principles, our goal is to build a mutually beneficial partnership that supports the success of both parties.
Regulators
As directors of the company, we are dedicated to maintaining positive connections with regulators, acknowledging their vital role in maintaining necessary oversight so that our business runs in a compliant manner. Our efforts extend to our commitment to FCSA accreditation held by our parent company (Giant Precision Limited), further exemplifying our adherence to industry best practices.
Our dedication to transparency, adherence to regulations, and cooperative efforts encompasses the following actions:
Meetings, Calls, and Correspondence: We ensure to actively engage in open and constructive communication through meetings, calls, and correspondence with regulators. This commitment ensures a continuous exchange of information and provides them with a clear understanding of our business activities.
Site Visits: We welcome and facilitate site visits from regulatory authorities. This commitment allows regulators to gain firsthand insights into our operations, promoting transparency and providing an opportunity for building mutual understanding.
Responding to Consultations and Calls for Evidence: We participate in consultations and respond to calls for evidence initiated by regulatory bodies.
By following FCSA accreditation standards, we show regulators our commitment to working together, being transparent, and actively participating and following industry benchmarks. This thorough approach builds trust and understanding, making the company and the wider Giant Precision Limited Group a strong supporter of responsible, compliant, and ethical business practices in the eyes of regulators and the wider industry community.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 May 2024.
Basis for 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. Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included;
obtaining, critically appraising and checking the arithmetical accuracy of the cashflow forecasts prepared by management supporting their formal going concern assessments,
discussing key events after the end of the reporting period with management to assess their impact on the going concern assumption and corroborating by reviewing board minutes and management accounts; and
reviewing disclosures in the annual report and financial statements relating to the going concern basis of preparation to ensure it is an accurate reflection of the basis for which the company is a going concern
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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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 has been prepared in accordance with applicable legal requirements.
As explained more fully in the Directors’ Responsibilities Statement set out on 9, 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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Giant Precision Contracts Limited is a private company limited by shares incorporated in England and Wales. The registered office is Fourth Floor, 90 High Holborn, London, England, WC1V 6LJ.
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:
Section 7 ‘Statement of Cash Flows’ : Presentation of statement of cash flow and related 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Giant Precision Limited. These consolidated financial statements are available from its registered office, Fourth Floor, 90 High Holborn, London, England, WC1V 6LJ.
The directors also note that the company is reliant on the full or partial repayment of the intercompany balances in order to settle its liabilities as they fall due. Receipt of such monies ultimately relies on the provision of financial support from the ultimate parent company.
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.
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.
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.
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.
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.
Company operates both accrued and rolled up holiday pay schemes. All workers are given monthly reminders to take their holiday.
A provision is made for bad and doubtful debts, where management believes there is an issue in the recoverability of trade and other debtors. In the current year, management believe all balances to be recoverable and hence no provision is included within the financial statements.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The deferred tax asset set out above is expected to reverse within 12 months and relates to timing difference on pension payments.
The company has taken advantage of exemption provided by section 33 of FRS 102 'Related Party Disclosures' and has not disclosed transactions entered into between two or more members of the group, provided that any subsidiary undertaking which is party to the transactions is wholly owned by a member of the group.
The following amounts were outstanding at the reporting end date:
Giant Precision Limited is the immediate parent company. Giant Precision Limited is the largest and smallest group in which Giant Precision Contracts Limited is a member and for which consolidated financial statements are prepared and publicly available. A copy of the group financial statements can be obtained from Giant Precision Limited, Fourth Floor, 90 High Holborn, London, England, WC1V 6LJ.
The company's ultimate controlling party is Matthew Brown, a director and majority shareholder of Giant Precision Limited.