The directors present the strategic report for the year ended 30 June 2024.
The company is a wholly owned subsidiary of EKJT Limited (The 'Group')
The principal activity of the Company continued to be that of an intermediate holding company.
Business Strategy
The group operates in the UK Lift Market and supplies Vermaport Shopping Cart Conveyors and spare parts globally.
In order to stand out in our chosen markets we take pride in our commitment to industry-leading workmanship and exceptional customer service sets us apart in the market. We strive to exceed customer expectations by offering fair and transparent pricing without any hidden charges.
The directors’ primary objectives for the year were to maintain the profitability of its contracts, steady sustainable and profitable growth, and to prepay its bank facilities ahead of schedule to mitigate rising interest costs.
The directors are pleased with the results for the Group for the financial year ended 30 June 2024.
The Group’s main divisions are
Lift Servicing: comprising planned preventative maintenance, emergency call out & repair
Capital Projects: comprising new & replacement lift installation and modernisation
Vermaport: comprising new shopping cart conveyor sales and associated spare parts
The Group's main divisions include Lift Servicing, Capital Projects, and Vermaport. All three divisions performed better than expected, with a turnover of £19.7m (compared to £13.3m in FY23) and a gross margin of 33% (compared to 34% in FY23). The Group achieved a profit after tax of £2.4m (compared to £1.3m in FY23), and the net debt EBITDA leverage was 0.15x (compared to 0.63x in FY23).
The group met its objectives and prepaid early all of its bank loans as well as the deferred consideration owed to a former Director ahead of plan.
The Group met all of its interest obligations during the year despite significant rises in interest rates.
The Group made use of its Revolving Credit Facility which provides liquidity as and when as required up to £875,000 as well continuing to use its £300,000 multi-currency overdraft facility.
The group is exposed to a number of business risks and uncertainties and has plans in place mitigate these risks as much as practically possible
The group operates worldwide and has a supply chain based in Europe. As a result, the group is exposed to movements in foreign currency exchange rates in the Euro and US Dollar on purchases and receipts in those currencies. The Group manages these risks through the use its multi-currency overdraft and utilising receipts in Euro’s and USD to settle liabilities in those currencies and avoiding potential foreign currency exchange losses.
Competition is a significant risk to the Group. Our focus is to provide consistently good quality service and products to retain existing customers, as well as attract new ones.
The group is exposed to a moderate level of price risk, credit risk, liquidity risk and cash flow risk. The group manages these risks by financing its operations through retained profits, supplemented by a multi-currency bank overdraft when necessary to fund growth.
The group makes limited use of derivative financial instruments (forward exchange contracts), no forward exchange contracts have been entered into at the balance sheet date.
The directors anticipate the UK lift market will remain highly competitive, particularly in the sectors where our business is focused. Many companies tender for the same work giving rise to aggressive pricing structures and increasing pressure on our margins year on year.
We believe that the Group is in a good financial position and that the risks identified are being well managed. With continued focus on delivering an industry leading level of service, quality and communication the directors are confident in the company's ability to maintain and build on its success.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 8.
Ordinary dividends were paid to EKJT Limited amounting to £3,035,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Chanderhill Limited (the 'company') for the year ended 30 June 2024 which comprise 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud
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 management, and from our commercial knowledge and experience of the steel manufacturing and treatment and coating of metals 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 Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environments and health and safety legislation;
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;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
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 accounting estimates were indicative of potential bias;
investigated the rationale behind significant or unusual transactions; and
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims;
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, 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.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Chanderhill Limited is a private company limited by shares incorporated in England and Wales. The registered office is Park View House,, 58 The Ropewalk, Nottingham, England, NG1 5DW.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
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, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial 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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The average monthly number of persons (including directors) employed by the company during the year was:
Details of the company's subsidiaries at 30 June 2024 are as follows:
All classes of ordinary shares have attached to them full voting and dividend rights and shall rank pari passu in all respects save as otherwise provided in the current articles of association of the company. No ordinary shares any rights of redemption.
Contingent liabilities exist by virtue of cross guarantees over the bank indebtedness of Chanderhill Limited's parent company, EKJT Limited. At the year end there was a bank loan outstanding in the parent company of £nil (2023: £812,499). A fixed and floating charge over the assets of Morris Vermaport Ltd exists as security against the parent company debt.
Contingent liabilities exist by the virtue of cross guarantees over deferred consideration in the parent company, EKJT Limited. At the balance sheet date the maximum contingent liability under the cross guarantee amounted to £nil (2023: £800,000) for the ultimate parent company.
Post year end, Chanderhill Limited's trade and assets were hived up in to the parent company, EKJT Limited.
The company has taken advantage of the exemption provided by FRS102 from the requirement to report transactions with other group companies that are 100% subsidiaries of the parent company, EKJT Limited.