Company registration number 00693397 (England and Wales)
F.C. BROWN (STEEL EQUIPMENT) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
F.C. BROWN (STEEL EQUIPMENT) LIMITED
COMPANY INFORMATION
Directors
R Costin
M Pierleoni
N Howells
(Appointed 3 July 2024)
Company number
00693397
Registered office
Caswell Way
Reevesland Industrial Estate
Newport
South Wales
United Kingdom
NP19 4PW
Auditor
UHY Hacker Young
Bradbury House
Mission Court
Newport
Gwent
United Kingdom
NP20 2DW
F.C. BROWN (STEEL EQUIPMENT) LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 31
F.C. BROWN (STEEL EQUIPMENT) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The directors present the strategic report for the year ended 31 July 2024.
Review of business
Turnover decreased by 9.9% in the year from £47.5m to £42.8m. The decline was mainly caused by lower distribution of products to overseas subsidiaries. UK sales increased by 2.9% whilst sales to Europe declined by 12.0% and sales to the rest of the world declined by 73.6%.
Profits before taxation rose to £1.5m (2023: loss £5.9m), which includes £3.1m exceptional profit from the disposal of a surplus building, partially offset by other exceptional costs of £1.2m (including £0.3m redundancy costs and £0.3m for employment ownership trust bonus commitments made by Mr Tony Brown to the Group’s staff). Excluding the exceptional items, the adjusted profit before interest, tax, depreciation and amortisation came to £0.9m (2023: profit £0.6m). 2024 also suffered from foreign exchange losses of £0.1m.
Net cash and cash equivalents increased to £6.5m (2023: £4.9m).
Net Current assets at 31 July 2024 were £13.7m (2023: £8.2m), and net assets were £27.0m (2023: £25.6m).
Principal risks and uncertainties
Demand risk
Although demand in the UK remained steady compared to the previous year, we saw further material falls in demand from our overseas subsidiaries, with market challenges continuing in Europe and the US, partially offset by strong demand in the Middle East. In response the business continued to deliver efficiencies in its manufacturing operations as well as overhead cost savings. The impact on currency exchange remains a risk along with cost of global shipment and the ongoing increasing cost of raw materials.
Price risk
The company is exposed to the risk of commodity price volatility. During the year, strategic buying from our supply partners resulted in retention of strong prime margins. The company remains vigilant and continues to consolidate its supply chain wherever possible to ensure the business is protected.
Current risk
The company's principal financial assets are bank balances and cash, due to the restructure and the focus on cash management the company is pleased with its current position. The company’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance is made where there is evidence of a reduction in the recoverability of the cash flows. Where possible, and commercially practical to do so, the company insures its trade receivables. Average collection days for trade receivables in the year was 46 days (2023: 51 days). The credit risk on liquid funds is spread and limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies or have a significant UK Government shareholding.
Foreign exchange risk
The company's activities increasingly expose it to the financial risks of changes in foreign currency exchange rates. Where possible the company seeks to match purchases and sales in foreign currencies. When it is appropriate the company uses forward exchange contracts to reduce risk and protect it against adverse short term exchange movements.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
Future developments
The impact of the global recession because of the Ukraine War has had a significant impact on the performance of the business, particularly on overseas sales. The extraordinary rise in energy costs and inflation, continues to impact on raw material and distribution costs. However, against this backdrop the business continues to see double digit growth in its online retail and trade channels. The launch of online sites in Bisley Netherlands and Bisley Ireland will also drive future growth for the company.
The business also continues to focus on operational efficiencies, stronger procurement with strategic suppliers, continued product diversification and innovation and new markets. Tight control over working capital remains a strong focus ensuring trade receivables are kept within agreed credit terms, inventory cycles are maximised, and trade payable terms are respected to ensure continuation of strong relationships with our strategic suppliers.
As a result of all of the aforementioned actions, the directors remain confident in the future of the business, and its ability and prospects to ride through the challenging market conditions.
Going Concern
The Board has prepared forecasts for the foreseeable future. The Board has factored in the restructuring work already done, a focus on rigorous cost control, the adoption of new purchasing strategies and the passing on of costs where possible. The Board is satisfied that the group will have the resources to continue as a going concern for the foreseeable future and hence the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.
Statement by the directors on performance of their statutory duties in accordance with s172(1) of the Companies Act 2006
The Board of directors of F.C. Brown (Steel Equipment) Limited consider, both individually and collectively, that they have acted in ways that they believe in good faith to 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 other matters set out in s172(1) of the Act) in the decisions they made during the year ended 31 July 2024.
We support diversity and inclusion within the workplace and recognise our colleagues as our most important and valuable asset, and aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and wellbeing of our colleagues are of the highest importance and ensuring these is one of our primary considerations in the way we do business.
Caring for our customers is fundamental to the success of our business and we endeavour to serve them to the very best of our ability, whether this is dealing with other businesses or directly with consumers through our Online operations. We are committed to ensuring that all the products we sell meet the latest industry standards and offer our customers both high quality and great value.
We also aim to act responsibly and fairly in our engagement with suppliers, regulators, bankers, insurers and stakeholders. All suppliers are paid in accordance with their agreed terms. We respond quickly and fully to queries from regulators, bankers, insurers and stakeholders, providing the last with monthly updates on our performance.
The business is committed to protecting and ensuring the health and wellbeing of the communities in which we operate, and that of the wider environment and society as a whole. We work with and support local and national charities and have done so for many years. We continue to work hard to reduce our impact on the environment by continuous improvement of our processes and procedures.
As the Board of Directors, our intention is always to behave responsibly and to ensure that the business operates in a responsible manner, adhering to high standards of business conduct and good governance. We recognise that the maintenance of our good reputation, founded on responsible behaviour, is fundamental to our continuing ability to achieve profitable growth for the benefit of all our stakeholders in the future.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
R Costin
Director
14 March 2025
F.C. BROWN (STEEL EQUIPMENT) LIMITED
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.
Principal activities
The principal activity of the company continued to be that of the manufacture and distribution of office furniture.
Results and dividends
The results for the year are set out on page 10, a review of business is provided in the strategic report on page 1.
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:
P A Crutcher
(Resigned 21 August 2023)
R Bayliss
(Resigned 30 July 2024)
R Costin
M Pierleoni
N Howells
(Appointed 3 July 2024)
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company recognises the importance of good communications and relations with all employees. Employees are regularly informed of the company's performance and are actively encouraged to discuss with management any matters which may be of concern to them. Suggestions from employees which may improve their working environment or the company's performance are welcomed.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Auditor
The auditors, UHY Hacker Young, have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting.
Energy and carbon report
Details around the company's energy and carbon usage are included in the parent company consolidated accounts.
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.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 5 -
On behalf of the board
R Costin
Director
14 March 2025
F.C. BROWN (STEEL EQUIPMENT) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 6 -
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF F.C. BROWN (STEEL EQUIPMENT) LIMITED
- 7 -
Opinion
We have audited the financial statements of F.C. Brown (Steel Equipment) Limited (the 'company') for the year ended 31 July 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 July 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF F.C. BROWN (STEEL EQUIPMENT) LIMITED
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and ISO standards;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF F.C. BROWN (STEEL EQUIPMENT) LIMITED
- 9 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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.
Mr John Griffiths (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
14 March 2025
Chartered Accountants
Statutory Auditor
Newport
Gwent
United Kingdom
F.C. BROWN (STEEL EQUIPMENT) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
2024
2024
2023
2023
as restated
Notes
£'000
£'000
£'000
£'000
Turnover
3
42,834
47,542
Exceptional cost of sales
10
-
(4,455)
Other cost of sales
(35,121)
(39,185)
Total cost of sales
(35,121)
(43,640)
Gross profit
7,713
3,902
Distribution costs
(6,702)
(7,633)
Exceptional administrative income/(expenses)
10
1,947
(237)
Other administrative expenses
(2,049)
(2,304)
Total administrative expenses
(102)
(2,541)
Other operating income
230
405
Operating profit/(loss)
4
1,139
(5,867)
Interest receivable and similar income
8
445
29
Interest payable and similar expenses
9
(31)
(31)
Profit/(loss) before taxation
1,553
(5,869)
Tax on profit/(loss)
11
(123)
1,339
Profit/(loss) for the financial year
1,430
(4,530)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
2024
2023
as restated
£'000
£'000
Profit/(loss) for the year
1,430
(4,530)
Other comprehensive income
-
-
Total comprehensive income for the year
1,430
(4,530)
F.C. BROWN (STEEL EQUIPMENT) LIMITED
BALANCE SHEET
- 12 -
2024
2023
as restated
Notes
£'000
£'000
£'000
£'000
Fixed assets
Intangible assets
12
74
123
Tangible assets
13
13,323
17,314
13,397
17,437
Current assets
Stocks
14
4,034
4,926
Debtors
15
14,051
13,869
Cash at bank and in hand
7,463
4,949
25,548
23,744
Creditors: amounts falling due within one year
16
(11,892)
(15,542)
Net current assets
13,656
8,202
Total assets less current liabilities
27,053
25,639
Government grants
21
(7)
(23)
Net assets
27,046
25,616
Capital and reserves
Called up share capital
20
100
100
Revaluation reserve
1,497
1,497
Profit and loss reserves
25,449
24,019
Total equity
27,046
25,616
The financial statements were approved by the board of directors and authorised for issue on 14 March 2025 and are signed on its behalf by:
R Costin
Director
Company registration number 00693397 (England and Wales)
F.C. BROWN (STEEL EQUIPMENT) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£'000
£'000
£'000
£'000
As restated for the period ended 31 July 2023:
Balance at 1 August 2022
100
1,497
17,986
19,583
Prior year adjustment
-
(792)
(792)
As restated
100
1,497
17,194
18,791
Year ended 31 July 2023:
Loss and total comprehensive income for the year
-
-
(4,530)
(4,530)
Other movements
-
-
11,355
11,355
Balance at 31 July 2023
100
1,497
24,019
25,616
Year ended 31 July 2024:
Profit and total comprehensive income for the year
-
-
1,430
1,430
Balance at 31 July 2024
100
1,497
25,449
27,046
The revaluation reserve represents the cumulative effect of revaluations of freehold and leasehold land and buildings.
The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 14 -
1
Accounting policies
Company information
F.C. Brown (Steel Equipment) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Caswell Way, Reevesland Industrial Estate, Newport, South Wales, United Kingdom, NP19 4PW.
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 £000.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value.
The company took advantage of the transitional provisions in Section 35 of FRS 102 to use a previous GAAP revaluation of property as its deemed cost. The company had similarly used the transition provisions in FRS 15 Tangible Fixed Assets and retained the book amounts of freehold land and buildings that were revalued prior to implementation of that standard.
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, Bisley Office Equipment Limited, 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 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Bisley Office Equipment Limited. These consolidated financial statements are available from its registered office, Bisley Factory, Caswell Way, Reevesland Industrial Estate, Newport, South Wales, NP19 4PW.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
F.C. Brown (Steel Equipment) Limited is a wholly owned subsidiary of Bisley Office Equipment Limited and the results of F.C. Brown (Steel Equipment) Limited are included in the consolidated financial statements of Bisley Office Equipment Limited which are available from Bisley Factory, Caswell Way, Reevesland Industrial Estate, Newport, South Wales, NP19 4PW.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
1.2
Going concern
The Boardtrue has prepared forecasts for the foreseeable future. The Board has factored in the restructuring work already done, a focus on rigorous cost control, the adoption of new purchasing strategies and the passing on of costs where possible. The Board is satisfied that the group will have the resources to continue as a going concern for the foreseeable future and hence the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Software
5 years
Website
3 years
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
The company took advantage of the transitional provisions in Section 35 of FRS 102 to use a previous GAAP revaluation of property as its deemed cost. The company had similarly used the transition provisions in FRS 15 Tangible Fixed Assets and retained the book amounts of freehold land and buildings that were revalued prior to implementation of that standard.
Subsequent additions are stated at cost. All repairs are written off as incurred. Where depreciation charges are increased following a revaluation, an amount equal to the increase is transferred annually from the revaluation reserve to the profit and loss account as a movement in reserves.
Tangible fixed assets other than freehold land and buildings are stated at cost less depreciation and provision for any impairment. Depreciation is not provided on freehold land or assets in the course of construction. On all other assets it is provided on cost or revalued sum less residual amount in equal instalments over the estimated useful lives of the assets. The estimated lives of the assets have been assessed as follows:
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
Freehold buildings
50 years
Leasehold improvements
Over life of lease
Plant, machinery and press tools
3 to 10 years
Motor vehicles
4 years
Fixtures, furniture & office equipment
3 to 10 years
Assets in the course of construction are not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
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
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.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 17 -
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.
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.
Other financial liabilities
Derivatives, including 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
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 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 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 profit and loss account, 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
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.
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.
Employee Ownership Trust
The company's parent established Bisley Employee Ownership Trust with the object of ensuring that shares in the parent company are held by the Trustees for the benefit of the company’s employees to have an interest in the company’s business, a voice in its operations and a share in its profits.
The distributions made by the group to the Trust are treated as gift payments so that the Trust can meet its obligations.
1.10
Retirement benefits
The company operates a defined contribution pension scheme and a group personal pension scheme. The assets of these schemes are held separately from those of the company in independently administered funds. Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 19 -
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the Profit And Loss for the period.
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.
Deferred tax asset
Details of the asset are provided in note 18 to the accounts. The carrying value of the deferred tax asset at the year end is £3,912,000 (2023: £4,051,000 as restated). The critical judgement relates to the company's ability to utilise the asset arising from tax losses against future taxable profits. The board expects to be able to utilise the asset as the company continues to improve profitability after the pandemic, therefore the board is satisfied that its judgement to recognise the asset remains appropriate.
The company also has an unrecognised deferred tax asset of £223,000 (2023: £nil).
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock valuation
At 31 July 2024 the company held stock of £4,034,000 (2023: £4,926,000). Stocks are valued at the lower of cost and net realisable value. Cost includes the cost of materials, direct costs and production overheads using an appropriate absorption rate. This requires judgement. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment trends. This also involves significant judgement.
Carrying value of fixed assets
The company's tangible fixed assets cost £80,195,000 (2023: £85,152,000) and had a carrying value of £13,323,000 (2023: £17,314,000) at 31 July 2024. The depreciation policy is set out at 1.4 above; depreciation of £1,624,000 (2023: £1,808,000) was charged to the profit and loss account during the year. The estimation of useful economic life can have a significant impact on the depreciation charge and on the carrying value of assets; the board regularly reviews the asset lives based on past experience.
Impairment of intercompany balances
The carrying value of receivables from group undertakings at the balance sheet date was £3,724,000 (2023: £2,937,000). Balances are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit and loss account. The impairment loss is the difference between the asset’s carrying amount and the best estimate of the recoverable amount at the reporting date. Impairment losses of £nil (2023: £nil) were recognised in the year.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£'000
£'000
Turnover analysed by class of business
Sale of goods
42,834
47,542
2024
2023
£'000
£'000
Turnover analysed by geographical market
United Kingdom
30,899
30,030
Other European countries
10,444
11,864
Rest of the world
1,491
5,648
42,834
47,542
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
3
Turnover and other revenue
(Continued)
- 21 -
2024
2023
£'000
£'000
Other revenue
Interest income
50
29
Dividends received
395
-
Amortisation of capital grants
16
31
Rental income
198
381
4
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the year is stated after charging/(crediting):
£'000
£'000
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
111
(1)
Depreciation of owned tangible fixed assets
1,624
1,808
Exceptional profit on disposal of tangible fixed assets (see note 10)
(3,154)
-
Other exceptional items (see note 10)
1,207
4,692
Other profit on disposal of tangible fixed assets
(102)
(9)
Amortisation of intangible assets
49
34
Operating lease charges
467
332
Capital based grants
(16)
(31)
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
50
48
For other services
Taxation compliance services
10
10
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 22 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
311
333
Sales and distribution
44
50
Administration
12
11
Total
367
394
Their aggregate remuneration comprised:
2024
2023
£'000
£'000
Wages and salaries
13,620
13,837
Social security costs
1,191
1,134
Pension costs
668
494
15,479
15,465
Included within the above are exceptional redundancy costs of £340,000 (2023: £29,000), refer to note 10.
Also included within wages and salaries are subcontractors costs totalling £1,408,000 (2023: £1,253,000).
The employment contracts for various directors of the company are with the holding company, Bisley Office Equipment Limited, and information regarding their remuneration is included in that company’s accounts. No recharge from Bisley Office Equipment Limited to the company was made during the year (2023: £1,121,000). The total amount of the recharge in 2023 is included in the aggregate employment costs set out above.
7
Directors' remuneration
2024
2023
£'000
£'000
Remuneration for qualifying services
104
96
Company pension contributions to defined contribution schemes
7
51
111
147
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 23 -
8
Interest receivable and similar income
2024
2023
£'000
£'000
Interest income
Interest on bank deposits
50
27
Other interest income
2
Total interest revenue
50
29
Income from fixed asset investments
Income from shares in group undertakings
395
Total income
445
29
9
Interest payable and similar expenses
2024
2023
£'000
£'000
Interest on bank overdrafts and loans
31
31
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
10
Exceptional costs/(income)
2024
2023
£'000
£'000
Utilities
-
4,455
Exceptional costs/(income) included within cost of sales
-
4,455
Restructuring costs
225
29
Directors redundancy costs
115
-
EOT Bonuses
350
352
Asset Impairment
-
73
Intercompany debt forgiven
405
(220)
Profit on disposal of tangible fixed assets
(3,154)
-
Other
112
3
Exceptional costs/(income) included within administrative expenses
(1,947)
237
Total exceptional costs/(income) within operating profit
(1,947)
4,692
The £4,455,000 utility costs in 2023 related to exceptional costs relating to utility contracts that the company took out during the "energy crisis" that saw unprecedented rises in wholesale prices for gas and electricity in the UK, Europe and elsewhere. The board concluded that the impact of these contracts was exceptional and not reflective of underlying activity.
During the year the company incurred redundancy costs of £225,000 (2023: £29,000) as part of its restructuring of operations. Additional redundancy costs relating to directors were incurred the year of £115,000 (2023: £nil).
In the current year there were also additional exceptional costs of £350,000 (2023: £352,000) in relation to bonuses paid on behalf of the EOT; £nil (2023: £73,000) relating to the impairment of assets and other exceptional costs of £112,000 (2023: £3,000).
The intercompany debt relates to amounts cleared as a result of restructuring entities
During the year the company received exceptional income relating to profit on disposal of buildings of £3,154,000 (2023: £nil).
11
Taxation
2024
2023
£'000
£'000
Current tax
Benefit arising from a previously unrecognised tax loss or credit
(15)
(14)
Deferred tax
Origination and reversal of timing differences
138
(1,398)
Adjustment in respect of prior periods
73
Total deferred tax
138
(1,325)
Total tax charge/(credit)
123
(1,339)
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
11
Taxation
(Continued)
- 25 -
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£'000
£'000
Profit/(loss) before taxation
1,553
(5,869)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.00%)
388
(1,232)
Tax effect of expenses that are not deductible in determining taxable profit
12
20
Tax effect of income not taxable in determining taxable profit
(906)
(50)
Unutilised tax losses carried forward
223
Adjustments in respect of prior years
(14)
Effect of change in corporation tax rate
(239)
Group relief
3
Permanent capital allowances in excess of depreciation
(1)
Depreciation on assets not qualifying for tax allowances
99
106
Research and development tax credit
(35)
Other permanent differences
(5)
Deferred tax adjustments in respect of prior years
73
Chargeable gain
342
Taxation charge/(credit) for the year
123
(1,339)
12
Intangible fixed assets
Software
Website
Total
£'000
£'000
£'000
Cost
At 1 August 2023 and 31 July 2024
970
154
1,124
Amortisation and impairment
At 1 August 2023
900
101
1,001
Amortisation charged for the year
25
24
49
At 31 July 2024
925
125
1,050
Carrying amount
At 31 July 2024
45
29
74
At 31 July 2023
70
53
123
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 26 -
13
Tangible fixed assets
Land and buildings
Assets under construction
Plant, machinery, press tools & motor
Fixtures, furniture & office equipment
Total
£'000
£'000
£'000
£'000
£'000
Cost or valuation
At 1 August 2023
21,581
270
55,261
8,040
85,152
Additions
928
55
1
984
Disposals
(4,182)
(1,407)
(352)
(5,941)
Transfers
8
(605)
575
22
At 31 July 2024
17,407
593
54,484
7,711
80,195
Depreciation and impairment
At 1 August 2023
9,360
51,176
7,302
67,838
Depreciation charged in the year
421
944
259
1,624
Eliminated in respect of disposals
(971)
(1,400)
(219)
(2,590)
At 31 July 2024
8,810
50,720
7,342
66,872
Carrying amount
At 31 July 2024
8,597
593
3,764
369
13,323
At 31 July 2023
12,221
270
4,085
738
17,314
The carrying value of land and buildings comprises:
2024
2023
£'000
£'000
Freehold
8,416
11,976
Short leasehold
181
245
8,597
12,221
The company took advantage of the transitional provisions in Section 35 of FRS 102 to use a previous GAAP revaluation of property as its deemed cost. The company had similarly used the transition provisions in FRS 15 Tangible Fixed Assets and retained the book amounts of freehold land and buildings that were revalued prior to implementation of that standard. Note the valuation related purely to land which is not depreciated.
Comparable amounts for land and buildings determined according to historical cost convention at 31 July are:
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
13
Tangible fixed assets
(Continued)
- 27 -
2024
2023
£'000
£'000
Cost
15,910
20,084
Accumulated depreciation
(8,809)
(9,359)
Carrying value
7,101
10,725
14
Stocks
2024
2023
£'000
£'000
Raw materials and consumables
1,849
2,371
Work in progress
1,085
1,230
Finished goods and goods for resale
1,100
1,325
4,034
4,926
The directors do not consider the replacement cost of stock to be materially different from the value stated above.
15
Debtors
2024
2023
Amounts falling due within one year:
£'000
£'000
Trade debtors
5,341
6,006
Amounts owed by group undertakings
3,724
2,937
Other debtors
690
616
Prepayments and accrued income
384
259
10,139
9,818
Deferred tax asset (note 18)
3,912
4,051
14,051
13,869
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 28 -
16
Creditors: amounts falling due within one year
2024
2023
Notes
£'000
£'000
Bank loans and overdrafts
17
966
Trade creditors
4,262
4,782
Amounts owed to group undertakings
1,611
2,566
Taxation and social security
294
335
Other creditors
1,777
2,454
Accruals and deferred income
2,982
5,405
11,892
15,542
17
Loans and overdrafts
2024
2023
£'000
£'000
Invoice finance facility
966
Payable within one year
966
Bank overdrafts are secured by a fixed and floating charge on the assets of the Company.
HSBC Invoice Finance (UK) Ltd has a legal charge dated 26 January 2024 with fixed and floating charges over all the property of the company.
18
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:
Assets
Assets
2024
2023
Balances:
£'000
£'000
Accelerated capital allowances (ACAs)
120
(189)
Tax losses
3,674
4,058
Retirement benefit obligations
11
153
Other short term timing differences
107
29
3,912
4,051
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
18
Deferred taxation
(Continued)
- 29 -
2024
Movements in the year:
£'000
Asset at 1 August 2023
(4,051)
Charge to profit or loss
139
Asset at 31 July 2024
(3,912)
The prior year asset has been restated (refer to note 26) due to an error in relation to non-qualifying assets.
In addition to the above, there is an unrecognised deferred tax asset of £223,000 in relation to the current year.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
668
494
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.
At the year end there were outstanding contributions of £44,000 (2023: £613,000).
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
ordinary shares of £1 each
100,000
100,000
100
100
The company has one class of ordinary shares which carry full voting, dividend and return of capital rights.
21
Government grants
2024
2023
£'000
£'000
Deferred government grants
7
23
Deferred income is included in the financial statements as follows:
2024
2023
£'000
£'000
Shown as deferred income on the face of the balance sheet
7
23
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
21
Government grants
(Continued)
- 30 -
In accordance with the accounting policy disclosed in note 1, amounts received by way of capital-based government grants during the year and the deferred income balance carried forward at 31 July are as follows:
2024
2023
£'000
£'000
At 1 August
(23)
(54)
Amounts received in the year
-
-
Less amounts credit to the profit and loss account
16
31
At 31 July
(7)
(23)
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£'000
£'000
Within one year
467
473
Between two and five years
1,118
1,549
1,585
2,022
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£'000
£'000
Acquisition of tangible fixed assets
483
293
24
Related party transactions
In accordance with FRS 102 section 33.1A, transactions with other group undertakings wholly owned within the Bisley Office Equipment Limited group have not been disclosed in the financial statements.
25
Ultimate controlling party
The immediate and ultimate parent company is Bisley Office Equipment Limited, a company incorporated in England and Wales. Bisley Office Equipment Limited is the parent of the smallest and largest group of which the company is a member and for which consolidated accounts are prepared. Copies of the Bisley Office Equipment Limited accounts can be obtained from Companies House, Cardiff, CF14 3UZ.
The ultimate controlling party at 31 July 2024 was the Bisley Employee Ownership Trust.
F.C. BROWN (STEEL EQUIPMENT) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 31 -
26
Prior period adjustment
Reconciliation of changes in equity
1 August
31 July
2022
2023
£'000
£'000
Adjustments to prior year
Adjustment to ACAs
(792)
(898)
Equity as previously reported
19,583
26,514
Equity as adjusted
18,791
25,616
Analysis of the effect upon equity
Profit and loss reserves
(792)
(898)
Reconciliation of changes in loss for the previous financial period
2023
£'000
Adjustments to prior year
Adjustment to ACAs
(106)
Loss as previously reported
(4,424)
Loss as adjusted
(4,530)
Prior year Accelerated Capital Allowances (ACAs) have been amended due to an error in the value of non-qualifying assets.
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