Company registration number SC157534 (Scotland)
THE FURNISHING SERVICE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD FROM 1 AUGUST 2023 TO 30 NOVEMBER 2024
THE FURNISHING SERVICE LIMITED
COMPANY INFORMATION
Directors
Mr R Wilson
Mr A Wilson
Mrs G Wilson
(Appointed 15 December 2023)
Company number
SC157534
Registered office
1 Glenburn Road
College Milton Industrial Estate
East Kilbride
G74 5BA
Auditor
Thomson Cooper
3 Castle Court
Carnegie Campus
Dunfermline
Fife
KY11 8PB
Business address
1 Glenburn Road
College Milton Industrial Estate
East Kilbride
G74 5BA
Bankers
Royal Bank of Scotland
Cartsdyke Avenue
Cartsburn East
Greenock
PA15 1EF
THE FURNISHING SERVICE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
THE FURNISHING SERVICE LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 1 -

The directors present the strategic report for the period ended 30 November 2024.

Fair review of the business

The company earned a profit of £353k for the 16-month period to 30 November in comparison to a loss of £451k for the 12-month period to 31 July 2023, representing an increase in profits of £804k. The profit was earned after a significant restructuring exercise was undertaken in the early 2024 to stem ongoing losses.

 

Restructuring was necessary as the business returned an EBITDA loss of £514k for the 8-month period to 31 March 2024, at which time senior management undertook a detailed review of all costs and operating processes to turnaround performance. This was successfully achieved, by removing both overhead and direct costs through a streamlining of operations, and a review of procurement.

 

The result of this exercise was that despite revenues dropping by £1.25m in the second 8-month period of the extended financial year, an EBITDA profit of £858k was earned, a profit improvement of £1.4m.

 

The directors will continue to monitor expenditure to maintain current margins, and believe that following the restructuring the business is now on a sound financial footing.

 

The directors chose to extend the financial year to align the trading period with the expected renewal of the Scotland XL tender which was due to end in November 2024. However, we have subsequently learned that it has been extended by a further six months.

Principal risks and uncertainties

The principal risks and uncertainties facing the company are:

Tender Renewals – The majority of revenues are earned through the successful award of contracts via framework agreements. The company works with its suppliers to achieve competitive pricing. and manages other costs to deliver best value to its customers while ensuring it remains profitable.

Stock prices – Stock price fluctuations, particularly where imports are affected by currency exchange rates are recognised as a risk, and the company continually reviews the marketplace for alternative supply lines to mitigate this risk;

Economic risk - As the company works closely with Local Authorities and the Scottish Government, it is potentially vulnerable to any changes that would have a negative impact on Local Authority spending. Local Authorities are required by statute to provide the services in question and therefore mitigates this risk.

Key performance indicators

 

 

16 Months to            12 Months to

2024               2023

 

Turnover             £48,174,435            £38,047,966

 

Gross Profit             £12,671,514 (26.3%)        £9,212,186 (24.2%)

 

Profit/(Loss) before Taxation    £353,359            £(451,065)

THE FURNISHING SERVICE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 2 -
Other information and explanations

Looking ahead, we are confident of the continued growth of the company in the coming financial year and look forward to the challenges ahead.

On behalf of the board

Mr R Wilson
Director
7 March 2025
THE FURNISHING SERVICE LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 3 -

The directors present their annual report and financial statements for the period ended 30 November 2024.

Principal activities
The principal activity of the company continued to be that of contract furnishers.
Directors

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

Mr R Wilson
Mr A Wilson
Mrs G Wilson
(Appointed 15 December 2023)
Results and dividends

The results for the period are set out on page 7.

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

Auditor

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

Statement of directors' responsibilities

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

 

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

 

 

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

Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors 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 auditors are aware of that information.
On behalf of the board
Mr R Wilson
Director
7 March 2025
THE FURNISHING SERVICE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE FURNISHING SERVICE LIMITED
- 4 -
Opinion

We have audited the financial statements of The Furnishing Service Limited (the 'company') for the period ended 30 November 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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:

THE FURNISHING SERVICE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE FURNISHING SERVICE LIMITED (CONTINUED)
- 5 -
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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was capable of detecting irregularities, including fraud

We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, posting of unusual journals along with complex transactions and manipulating the Company’s key performance indicators to meet targets. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, tested a sample of journals to confirm they were appropriate and reviewed areas of judgement for indicators of management bias to address these risks.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards).

We reviewed the laws and regulations in areas that directly affect the financial statements including financial and taxation legislation and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.

With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

THE FURNISHING SERVICE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE FURNISHING SERVICE LIMITED (CONTINUED)
- 6 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

 

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

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

Use of our Report

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

Alan Mitchell (Senior Statutory Auditor)
For and on behalf of Thomson Cooper, Statutory Auditors
Dunfermline
7 March 2025
THE FURNISHING SERVICE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 7 -
Period
Year
ended
ended
30 November
31 July
2024
2023
Notes
£
£
Turnover
3
48,174,435
38,047,966
Cost of sales
(35,502,920)
(28,835,780)
Gross profit
12,671,515
9,212,186
Administrative expenses
(12,042,779)
(9,471,929)
Operating profit/(loss)
4
628,736
(259,743)
Interest receivable and similar income
7
836
-
0
Interest payable and similar expenses
8
(276,213)
(191,322)
Profit/(loss) before taxation
353,359
(451,065)
Tax on profit/(loss)
9
2,059
13,579
Profit/(loss) for the financial period
355,418
(437,486)
THE FURNISHING SERVICE LIMITED
BALANCE SHEET
AS AT 30 NOVEMBER 2024
30 November 2024
- 8 -
30 November 2024
31 July 2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
329,547
417,020
Current assets
Stocks
11
1,336,733
1,538,172
Debtors
12
7,825,793
9,226,021
Cash at bank and in hand
160,152
704,235
9,322,678
11,468,428
Creditors: amounts falling due within one year
13
(7,207,262)
(9,641,160)
Net current assets
2,115,416
1,827,268
Total assets less current liabilities
2,444,963
2,244,288
Creditors: amounts falling due after more than one year
14
(83,333)
(216,667)
Provisions for liabilities
Deferred tax liability
16
82,847
104,256
(82,847)
(104,256)
Net assets
2,278,783
1,923,365
Capital and reserves
Called up share capital
18
220,000
220,000
Profit and loss reserves
2,058,783
1,703,365
Total equity
2,278,783
1,923,365

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 7 March 2025 and are signed on its behalf by:
Mr R Wilson
Director
Company registration number SC157534 (Scotland)
THE FURNISHING SERVICE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 August 2022
220,000
2,140,851
2,360,851
Year ended 31 July 2023:
Loss and total comprehensive income
-
(437,486)
(437,486)
Balance at 31 July 2023
220,000
1,703,365
1,923,365
Period ended 30 November 2024:
Profit and total comprehensive income
-
355,418
355,418
Balance at 30 November 2024
220,000
2,058,783
2,278,783
THE FURNISHING SERVICE LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
34,975
1,768,924
Interest paid
(276,213)
(191,322)
Income taxes refunded/(paid)
17,972
(153,480)
Net cash (outflow)/inflow from operating activities
(223,266)
1,424,122
Investing activities
Purchase of tangible fixed assets
(156,162)
(145,895)
Interest received
836
-
0
Net cash used in investing activities
(155,326)
(145,895)
Financing activities
Proceeds from new bank loans
-
0
500,000
Repayment of bank loans
(133,334)
(604,828)
Net cash used in financing activities
(133,334)
(104,828)
Net (decrease)/increase in cash and cash equivalents
(511,926)
1,173,399
Cash and cash equivalents at beginning of period
(2,326,636)
(3,500,035)
Cash and cash equivalents at end of period
(2,838,562)
(2,326,636)
Relating to:
Cash at bank and in hand
160,152
704,235
Bank overdrafts included in creditors payable within one year
(2,998,714)
(3,030,871)
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 11 -
1
Accounting policies
Company information

The Furnishing Service Limited is a private company limited by shares incorporated in Scotland. The registered office is 1 Glenburn Road, College Milton Industrial Estate, East Kilbride, G74 5BA.

1.1
Accounting convention

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

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

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

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

 

 

The financial statements of the company are consolidated in the financial statements of The Furnishing Service Holdings Limited. These consolidated financial statements are available from its registered office, 1 Glenburn Road, East Kilbride, Glasgow G74 5BA

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.

 

The directors have reviewed the cashflow requirements and projections and are satisfied that at the time of approving the financial statements the company has adequate resources to continue in operational existence for a period of not less than twelve months.  This included a comprehensive review of the financial projections and cash-flow requirements, covering a period beyond one year from the date of approval of the financial statements. These forecasts were prepared using assumptions which the directors consider appropriate to the financial position of the company and its future anticipated revenues and costs. On the basis of the above, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Income is recognised as a sale, at the point of delivery.

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

1.4
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. The cost of minor additions or those costing below £500 are not capitalised.

THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 12 -

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:

Tenant improvements
14.29% - 50% straight line
Computer equipment
33.3% straight line
Fixtures, fittings & equipment
25% 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
Impairment of fixed assets

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

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

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

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.7
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.

THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.8
Financial instruments

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

 

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

 

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

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities

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

 

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

 

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

Other financial liabilities

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

 

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

Derecognition of financial liabilities

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

1.9
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.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.10
Taxation

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

Current tax

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

Deferred tax
Deferred tax has been provided for in full, to take account of timing differences between the treatment of certain items for accounts purposes and their treatment for tax purposes.  The deferred tax balance has not been discounted.
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received, where considered material.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits
The company operates a defined contribution pension scheme for employees.  The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
1.13
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.

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.

Income recognition on incomplete orders

Where sales orders are fulfilled by a series of deliveries, income is recognised only to the extent the order has been fulfilled and when delivery has occurred.

THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 16 -
3
Turnover and other revenue

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

2024
2023
£
£
Turnover
Domestic furniture
48,174,435
38,047,966
Other significant revenue
Interest income
836
-
Turnover analysed by geographical market
2024
2023
£
£
Wholly within the UK
48,174,435
38,047,966
4
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
29,271
25,509
Depreciation of owned tangible fixed assets
243,635
127,473
Operating lease charges
582,942
473,506
5
Employees

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

2024
2023
Number
Number
Distribution
167
203
Administration
32
30
199
233
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
5
Employees
(Continued)
- 17 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
6,271,333
5,159,190
Social security costs
507,562
391,992
Pension costs
120,350
83,471
6,899,245
5,634,653
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
289,574
214,991
Company pension contributions to defined contribution schemes
17,196
13,391
306,770
228,382

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
836
-
0
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
274,100
181,208
Other interest
2,113
10,114
276,213
191,322
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 18 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
19,351
(18,185)
Deferred tax
Origination and reversal of timing differences
(21,410)
4,606
Total tax credit
(2,059)
(13,579)

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

2024
2023
£
£
Profit/(loss) before taxation
353,359
(451,065)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.00%)
88,340
(94,724)
Tax effect of expenses that are not deductible in determining taxable profit
966
697
Unutilised tax losses carried forward
-
0
78,196
Permanent capital allowances in excess of depreciation
(37,776)
(34,033)
Depreciation added back
60,909
26,770
Other adjustments
-
0
4,909
Utilisation of tax losses
(93,088)
-
0
Deferred tax charge
(21,410)
4,606
Taxation credit for the period
(2,059)
(13,579)
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 19 -
10
Tangible fixed assets
Tenant improvements
Computer equipment
Fixtures, fittings & equipment
Total
£
£
£
£
Cost or valuation
At 1 August 2023
75,859
499,310
191,249
766,418
Additions
17,945
60,429
77,788
156,162
At 30 November 2024
93,804
559,739
269,037
922,580
Depreciation and impairment
At 1 August 2023
53,076
183,862
112,460
349,398
Depreciation charged in the period
19,168
154,509
69,958
243,635
At 30 November 2024
72,244
338,371
182,418
593,033
Carrying amount
At 30 November 2024
21,560
221,368
86,619
329,547
At 31 July 2023
22,783
315,448
78,789
417,020

 

11
Stocks
2024
2023
£
£
Finished goods and goods for resale
1,336,733
1,538,172
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,365,999
5,454,641
Corporation tax recoverable
73,452
91,423
Amounts owed by group undertakings
2,689,237
2,689,285
Other debtors
97,960
255,092
Prepayments and accrued income
599,145
735,580
7,825,793
9,226,021

Amounts owed by group undertakings are not receivable within 12 months of the balance sheet date.

THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 20 -
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
3,098,714
3,130,871
Trade creditors
2,968,835
5,713,241
Corporation tax
19,351
-
0
Other taxation and social security
730,084
512,123
Other creditors
80,081
39,001
Accruals and deferred income
310,197
245,924
7,207,262
9,641,160
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
83,333
216,667
15
Loans and overdrafts
2024
2023
£
£
Bank loans
183,333
316,667
Bank overdrafts
2,998,714
3,030,871
3,182,047
3,347,538
Payable within one year
3,098,714
3,130,871
Payable after one year
83,333
216,667

The bank overdraft is secured on the assets of the company by way of a floating charge.

16
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
82,847
104,256
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
16
Deferred taxation
(Continued)
- 21 -
2024
Movements in the period:
£
Liability at 1 August 2023
104,256
Credit to profit or loss
(21,409)
Liability at 30 November 2024
82,847

The deferred tax liability set out above is expected to reverse within the 36 months and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
120,350
83,471

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.

18
Share capital
2024
2023
£
£
Ordinary share capital
Authorised
220,000 A Class Ordinary Shares of £1 each
220,000
220,000
Issued and fully paid
220,000 A Class Ordinary Shares of £1 each
220,000
220,000
19
Operating lease commitments
Lessee

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

2024
2023
£
£
Within one year
1,195,702
557,909
Between two and five years
1,370,599
954,612
In over five years
116,250
166,348
2,682,551
1,678,869
THE FURNISHING SERVICE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2024
- 22 -
20
Ultimate controlling party

During the period ended 30 November 2024, the company's ultimate parent company is The Furnishing Service Holdings Ltd (SC546503), with its registered office at 1 Glenburn Road, East Kilbride, Glasgow, G74 5BA.

The company's accounts are consolidated into the accounts of the ultimate parent company The Furnishing Service Holdings Ltd. Copies of the consolidated accounts can be obtained from the registered office above.

21
Cash generated from operations
2024
2023
£
£
Profit/(loss) for the period after tax
355,418
(437,486)
Adjustments for:
Taxation credited
(2,059)
(13,579)
Finance costs
276,213
191,322
Investment income
(836)
-
0
Depreciation and impairment of tangible fixed assets
243,635
127,473
Movements in working capital:
Decrease/(increase) in stocks
201,439
(216,689)
Decrease in debtors
1,382,257
833,460
(Decrease)/increase in creditors
(2,421,092)
1,284,423
Cash generated from operations
34,975
1,768,924
22
Analysis of changes in net debt
1 August 2023
Cash flows
30 November 2024
£
£
£
Cash at bank and in hand
704,235
(544,083)
160,152
Bank overdrafts
(3,030,871)
32,157
(2,998,714)
(2,326,636)
(511,926)
(2,838,562)
Borrowings excluding overdrafts
(316,667)
133,334
(183,333)
(2,643,303)
(378,592)
(3,021,895)
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