Registration number:
W.G.M (Engineering) Limited
for the Year Ended 31 March 2024
W.G.M (Engineering) Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Profit and Loss Account |
|
Balance Sheet |
|
Statement of Changes in Equity |
|
Notes to the Financial Statements |
W.G.M (Engineering) Limited
Company Information
Directors |
D S M Aitken A S Draper I W Mathieson T J W Rowe A A Ryder G D Young |
Company secretary |
S Evans |
Registered office |
|
Auditors |
|
W.G.M (Engineering) Limited
Strategic Report for the Year Ended 31 March 2024
The directors present their strategic report for the year ended 31 March 2024.
Principal activity
The principal activity of the company is the provision of mechanical, electrical, industrial and engineering services.
Fair review of the business
The Company is based in Scotland and provides end-to-end mechanical, electrical and civil engineering services, supported by a technical design team. The Company has been trading for over 35 years and is one of the UK's leading engineering solution providers. It has built up a strong reputation for providing a high quality service to clients, quality solutions and a commitment to health and safety whilst managing the social and environmental impacts of the business.
The Company joined the RSK Group in October 2022 and is capitalising on the opportunities available providing services to other companies within RSK and benefiting from the services that the other group companies can offer. Such as manufacturing and erecting portal frame buildings for MWH Treatment (an RSK group company). WGM also entered into a joint arrangement called bWGM with Binnies UK (an RSK group company) to deliver projects for United Utilities and Southern Water.
Results for the year
The company's results for the year show a trading profit before tax of £2,655k (2023: £1,443k). Turnover for the year was £52,693k (2023: £44,109k). The company has made significant progress in a number of areas:
- WGM has adopted the principles of the Circular Economy that is regenerative through design, retaining as much value as possible from products;
- The WGM Health and Safety performance in the year, underpinned by our 5 Golden Rules continues to be very strong;
- Supported by the new relationships within RSK Group, the business has already been successful in securing new frameworks in the English water sector;
- WGM continues to operate a Hybrid working approach that balances the requirements of the company and the wellbeing of our people;
- WGM has continued to build for the future with the recruitment of Apprentices and Graduates;
- The Directors have invested resources in developing the company infrastructure to ensure that the business is in a strong position and able to capitalise on further opportunities arising; and
- WGM Engineering formed a joint arrangement in year with Binnies UK Ltd called bWGM.
The Directors have invested resources in developing the company infrastructure to ensure that the business is in a strong position and able to capitalise on further opportunities arising.
W.G.M (Engineering) Limited
Strategic Report for the Year Ended 31 March 2024
Key Performance Indicators
The directors monitor several Key Performance Indicators (KPIs), and debate the company performance relative to those KPI at board meetings and divisional meetings. Examples of KPIs monitored include:
- EBITDA;
- Staff Turnover;
- Cash at Bank; and
- Debtor and Creditor days.
The directors are pleased to report that performance of the company in respect to all KPIs monitored is satisfactory.
Corporate responsibility
W.G.M (Envineering) Limited is part of the RSK Group which is a diverse group of environmental, engineering and technical services businesses, connected by a shared commitment to finding environmental and socially sustainable ways to fix challenging
problems. In doing so, we have found commercial success while making a positive contribution to the world around us. The Company supports the wider group’s ambitions through its service
delivery to clients and corporate responsibility and sustainability activities.
Sustainability in all that we do
RSK Group has recognised and championed the importance of environmental and social impact since its inception over 30 years ago, with “promoting the concept of sustainability in all that we do” being
one of the group’s nine business principles.
As a fast-growing global business, RSK Group can play a part in tackling the environmental, economic, and social challenges faced around the world. Our work is aligned with the United Nations’ 17 Sustainable Development Goals (SDGs), a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. It is not just about climate action, but it is also about providing affordable and clean energy, sustainable infrastructure, protecting life on land and below water, ending poverty and famine, and ensuring water supply and sanitation are available to all people.
Governments, businesses, organisations and individuals are embracing these goals, seeking the support from businesses, like those within RSK, to help them play their part. These fundamental drivers will have great impact on the RSK Group and the Company in the future, both on how we operate ourselves, but also how we support our clients.
Our holistic strategy
Our Sustainability Route Map integrates business and sustainability performance into a holistic strategy structured around five key pillars: safety, health and quality; our people and ethics; environment and communities; our clients and suppliers; financial and governance.
These five pillars provide the framework to align our business strategy to the SDGs and are key to our business’s success. To measure our progress, the Route Map sets out clear milestones each year
which keep us moving towards our overarching goals.
W.G.M (Engineering) Limited
Strategic Report for the Year Ended 31 March 2024
Key principles
The directors continue to run the business according to 10 key principles:
- Hiring, retaining and rewarding talented and dedicated people;
- Building enduring client relationships;
- Encouraging continuous improvement and innovation;
- Promoting a learning culture in a positive work environment;
- Making strategic investments for sustainable growth;
- Committing to strong, predictable financial performance;
- Maintaining unwavering commitment to health and safety;
- Responsibly managing the supply chain;
- Promoting the concept of sustainability in al that we do; and
- Encouraging staff consultation and clear communication.
Our commitment to our people
The directors recognise that our people are the key to our success as an organisation, and we strive to engage with all our employees, making sure everyone is involved in the development of our
business and is proud to be part of it.
Equal opportunities
The Company is committed to equality, diversity and inclusion which is core to our company culture. This is integral to the success of our business and supports our corporate responsibility and
sustainability efforts. To help the Company fully embrace equality, diversity and inclusion, The Company has pledged the following:
• Champion equality, diversity and inclusion from the top of the organisation.
• Acknowledge and tackle unconscious bias.
• Communicate and educate about the importance of equality, diversity and inclusion at all levels of our business, making this part of our everyday conversations.
• Empower our workforce through the introduction of employee networks.
We believe in equal opportunities for all employees and applicants and oppose all forms of unlawful or unfair discrimination in relation to a protected characteristic. All employees and applicants,
whether part time, full time or temporary, will be treated fairly and with respect.
The Company is committed to ensuring that every employee has a working environment that promotes dignity and respect, and where individual differences and contributions of employees are
recognised and valued.
As directors it is also important to us that we look after the wellbeing of our employees, so we subscribe to the group’s wellbeing policy which is built on five interconnected wellbeing pillars: physical, mental, social, financial and environmental. This policy is delivered through a diverse calendar of activities aimed at engaging, educating and connecting employees.
W.G.M (Engineering) Limited
Strategic Report for the Year Ended 31 March 2024
Principal risks and uncertainties
The directors are required to identify risks that might adversely affect the Company's business in the medium and long-term. The directors have considered the risks to the business and means to
manage those risks and have identified the following primary risks.
- Failure to maintain a sufficient employee resource at appropriate levels of seniority and experience. The directors recognise that having a sufficient resource to undertake projects is critical to the continued success of the Company. Skilled employees are in short supply with other industries within construction offering inflated rates making recruitment challenging. To that end, the directors are committed to all the components of Investors In People and seek to be an employer of choice. We aim to hire the most talented of people; we communicate widely and openly, share our Vision and Principles, we train our people and empower them. In this way we plan to look after our clients' needs in an exemplary fashion. The directors monitor people metrics, including retention statistics to identify any trends or issues. We support local schools and colleges in fostering interest in construction from an early age and we are now accredited with the National Centre for Diversity.
- Termination of projects or failure to win work in our core markets. We strive to delight our clients and keep abreast of their requirements and expectations through regular communication, project reviews, client satisfaction surveys and wider market assessments. We want to work to the highest technical and health and safety standards and to these ends, we operate in accordance with ISO 9001, ISO 14001 and ISO 45001 and, where applicable, comply with the various specific industry codes of practice and standards.
- Financial risk management. The company's operations expose it to a variety of financial risks and these risks need to be considered throughout the lifetime of a project. The directors operate an internal review process so that tenders are reviewed before submission to a client. Risk of late payment by clients and bad debts could result in the company having insufficient cash to pay suppliers in a timely fashion. The directors have considered this and have adequate working capital facilities, allowing for late payments by clients and pressure from creditors for more prompt settlement of accounts. A primary strategy employed by the directors to minimise financial risk is one of diversity of operations as set out above with a mix of services, clients, projects and geographical spread of operations.
- Global economy. Rising inflation and the risk of recession present risk to all businesses. To mitigate this risk, we remain as diverse as possible, strengthening our offer in sectors which we consider most resilient. The Company is also very nimble, able to make decisions very quickly and pivot to different market sectors when required. We closely manage costs to remain competitive in the marketplace.
W.G.M (Engineering) Limited
Strategic Report for the Year Ended 31 March 2024
Section 172(1) statement
The directors of the company must act in accordance with a set of general duties as detailed in section 172 of the UK Companies Act 2006. A director of a company must act in a way they
consider, in good faith, would be most likely to promote the success of the company for the benefits of its members, and in doing so have regard to:
- the likely consequences of any decision in the long term,
- the interests of the company's employees,
- the need to foster the company's business relationships with suppliers, customers and others,
- the impact of the company's operations on the community and the environment,
- the desirability of the company maintaining a reputation for high standards of business conduct,and
- the need to act fairly as between members of the RSK Group.
All directors are required to complete a directors' duty training module which provides them with an overview of the general duties and further support is provided by the RSK Group company
secretary.
As a large organisation the directors fulfil their duties through a governance framework that delegates day to day responsibilities to its employees with appropriate review and assurance processes in place.
The directors have regard to the likely consequences of any decision in the long term in all aspects of the business. The "Principal Risks and Uncertainties" section of the company's Strategic Report
sets out the company's approach to management of risks that might adversely affect the company's
business in the medium and long term.
The company is committed to being a responsible employer, our directors recognising that our people are the key to success. We strive to engage with all our employees, making sure everyone is
involved in the development of our business and feels pride in it. Please refer to "Our commitment to our people" section of the company's Strategic Report for more details.
The directors regularly review our business relationships, maintaining high levels of customer satisfaction and operating many long term partnership arrangements with key suppliers.
Our directors appreciate that the communities in which we operate are a key stakeholder and engagement with such communities is detailed in our Corporate Responsibility and Sustainability Route Map.
A reputation for high standards of business conduct is crucial to the business and its future success. This underpins everything we do and influences the decisions that the directors make.
W.G.M (Engineering) Limited
Strategic Report for the Year Ended 31 March 2024
Key event/decision |
Stakeholders affected |
Actions and impact |
Formed a joint arrangement with Binnies UK Ltdf (an RSK Group Company) to geographically expand WGM service offering to England & Wales Water utility clients. |
Employees, customers and shareholders |
The decision will expand the company’s customer base, grow revenues and create opportunities for our employees |
Ongoing investment in fleet to replacing aging fleet and support our growth. |
Employees, customers and shareholders |
The company operates a rolling capital investment programme of vehicle replacement with each tranche of spend approved by the board. This ongoing investment ensures the company operates with a fleet profile appropriate for the services provided to our customers. |
Approved by the
......................................... |
W.G.M (Engineering) Limited
Directors' Report for the Year Ended 31 March 2024
The directors present their report and the financial statements for the year ended 31 March 2024.
Directors of the company
The directors who held office during the year were as follows:
Dividends
The company paid a dividend of £5,500,000 in the period (2023: £500,000).
Events since the end of the period
There are no reported events since the end of the period.
Directors Indemnities
All directors benefited from qualifying third party indemnity provisions in place during the financial year and at the date of approval of this report.
Results for the year
W.G.M continued to provide its services in year to clients directly or where the Directors deem appropriate, via joint arrangements with strategic partners.
The company's results for the year show a trading profit before tax of £2,665k (2023: £1,443k). Turnover for the year was £52,693k (2023: £44,109k).
Donations
During the year the company made a charitable donation of £1,100. (2023: £2,660)
Business review
See Strategic report heading Fair review of the business.
W.G.M (Engineering) Limited
Directors' Report for the Year Ended 31 March 2024
Employees
As a rapidly growing business built by our employees, our ability to keep everyone in the group informed and engaged is very important. 'Encouraging staff consultation and clear communication' has been one of RSK's nine guiding principles since it was founded more than 30 years ago. Today, our employees remain at the heart of everything we do, and we are committed to open and clear communication at all levels.
We have several internal initiatives in place to engage our employees, share news and updates quickly and make it easier to collaborate and communicate across the group. Ranging from a weekly internal newsletter' comprehensive intranet system; monthly leadership reports from Executive Directors; and frequent group-wide email updates from Alan Ryder, RSK Chief Executive Officer. Employees are also encouraged to get involved in regular internal webinars, group-wide events and initiatives.
Our policies and procedures support our disabled colleagues. It is the policy of the Group that the recruitment, learning and development and promotion of disabled persons should, as far as possible, be identical to that of other employees. Should any employee of the Group become disabled during their time with us, we aim to retrain that employee and make reasonable adjustments to their working environment where possible, in order to keep the employee with the Group.
Going concern
The Directors have acknowledged the latest guidance on going concern from the Financial Reporting Council and considered various relevant matters noted here. The company participates in RSK Group’s (the Group) centralised treasury arrangements and so shares banking arrangements with its subsidiaries. As at 31 March 2024 the funds comprised £1bn committed acquisition facility and the Group has a £50m revolving credit facility with NatWest bank. These facilities were extended from 2028 to 2030 in September 2024. In September 2024 RSK Group received £520m preferred equity investment from a consortium of investors. The Company is party to cross
guarantee arrangements relating to a borrowing facility provided by Ares Management to RSK Group Limited. The amount borrowed under this agreement at 31 March 2024 is £1,060,136,000 (2023: £765,384,000).The directors have received a Letter of Support from the parent company.
The facilities will finance growth, both organic and acquisitive and associated working capital requirements.
After a thorough review, the Group’s consolidated business plan, forecasts and projections show that it is expected to operate within its facilities.
The Group has established contracts and master service agreements with several customers across a wide range of sectors and markets and has a significant pipeline of committed work, tenders in progress and opportunities. The Directors believe that the Group will continue to manage its business risks successfully despite uncertain economic conditions in some business sectors and countries.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue to operate for the foreseeable future, being a period of at least twelve months after the date on which the report and financial statements are signed. Accordingly, they have continued to adopt a going concern basis in the preparation of the annual report and financial statements.
W.G.M (Engineering) Limited
Directors' Report for the Year Ended 31 March 2024
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Auditors
BDO LLP was appointed as auditor in the year, and will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Approved by the
......................................... |
W.G.M (Engineering) Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
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.
W.G.M (Engineering) Limited
Independent Auditor's Report to the Members of W.G.M (Engineering) Limited
Opinion on the financial statements
In our opinion the financial statements:
• | give a true and fair view of the state of the Company’s affairs as at 31 March 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 have audited the financial statements of W.G.M (Engineering) Limited for the year ended 31 March 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 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 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
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 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.
Independence
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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 original financial statements were 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 Directors are responsible for the other information. The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. 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.
W.G.M (Engineering) Limited
Independent Auditor's Report to the Members of W.G.M (Engineering) Limited
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
Other Companies Act 2006 reporting
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
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 Directors’ 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 Statement of Directors Responsibilities, 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.
W.G.M (Engineering) Limited
Independent Auditor's Report to the Members of W.G.M (Engineering) Limited
Auditor 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.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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:
Non-compliance with laws and regulations
Based on:
• Our understanding of the company and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be Financial reporting standard 101, UK Companies Act 2006 and those that relate to the payment of employees.
The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be and industry related such as compliance with health and safety legislation.
Our procedures in respect of the above included, but were not limited to:
• Holding discussions with those charged with governance, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
• Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of legal expenditure accounts to understand the nature of expenditure incurred; and
• Obtaining an understanding of the control environment in monitoring compliance with laws and regulations.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
• |
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud; |
• |
Obtaining an understanding of the Company’s policies and procedures relating to: |
• |
Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; |
W.G.M (Engineering) Limited
Independent Auditor's Report to the Members of W.G.M (Engineering) Limited
• |
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and |
• |
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud. |
Based on our risk assessment, we considered the areas most susceptible to fraud to be posting inappropriate journal entries, management bias in accounting estimates, and revenue, specifically in relation to estimations of cost to complete, the shifting of costs between Projects and revenue recognised in advance of the transfer of risks and rewards.
• |
Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation; |
• |
Assessing significant estimates made by management for bias in particular in relation to cost to complete estimates and useful economic lives of property plant and equipment; |
• |
To address the risk of revenue recognised in advance of the transfer of risks and rewards, we have tested a sample of revenue recognised in the month before year end to supporting documentation to ensure it has been recognised in the correct period; |
• |
To address the risk in relation to estimations of cost to complete, we have challenged project managers and quantity surveyors on the forecasted costs and estimated completion date, as well as testing a sample of costs incurred post year end, to ensure the accuracy of the revenue recognised at year end; |
• |
To address the risk of the shifting of costs between Projects, we have tested a sample of costs in the year to supporting documentation to verify the samples have been allocated to the correct project; and |
• |
Agreeing the financial statement disclosures to underlying supporting documentation. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
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.
W.G.M (Engineering) Limited
Independent Auditor's Report to the Members of W.G.M (Engineering) Limited
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.
......................................
For and on behalf of
Manchester , UK
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
W.G.M (Engineering) Limited
Profit and Loss Account for the Year Ended 31 March 2024
Note |
2024 |
(As restated) |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit |
2,679,398 |
1,441,283 |
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(24,525) |
1,504 |
||
Profit before tax |
|
|
|
Tax on profit |
( |
( |
|
Profit for the financial year |
|
|
The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
W.G.M (Engineering) Limited
(Registration number: SC099834)
Balance Sheet as at 31 March 2024
Note |
2024 |
2023 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Deferred tax liability |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
21,622 |
21,622 |
|
Revaluation reserve |
722,062 |
722,062 |
|
Retained earnings |
4,299,758 |
7,759,320 |
|
Shareholders' funds |
5,043,442 |
8,503,004 |
Approved and authorised by the
......................................... |
W.G.M (Engineering) Limited
Statement of Changes in Equity for the Year Ended 31 March 2024
Share capital |
Revaluation reserve |
Retained earnings |
Total |
|
At 1 April 2022 |
|
|
|
|
Profit for the year |
- |
- |
|
|
Dividends paid |
- |
- |
( |
( |
At 31 March 2023 |
21,622 |
722,062 |
7,759,320 |
8,503,004 |
Share capital |
Revaluation reserve |
Retained earnings |
Total |
|
At 1 April 2023 |
|
|
|
|
Profit for the year |
- |
- |
|
|
Dividends paid |
- |
- |
( |
( |
At 31 March 2024 |
|
|
|
|
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
General information |
The company is a private company limited by share capital, incorporated in Scotland.
The address of its registered office is:
Scotland
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies.
The financial statements are presented in sterling, which is the functional currency of the company.
Company disclosure exemptions
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
• the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
• the requirements of Section 7 Statement of Cash Flows;
• the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
• the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
• the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; and
• the requirements of Section 33 Related Party Disclosures paragraph 33.7.
• the requirements of Section 9 Consolidated and Separate Financial Statements paragraph 9.3(a).
These accounts are consolidated into the accounts of RSK Group Ltd.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Going concern
The Directors have acknowledged the latest guidance on going concern from the Financial Reporting Council and considered various relevant matters noted here.
The company participates in the Group’s centralised treasury arrangements and so shares banking arrangements with its subsidiaries. As at 31 March 2024 the funds comprised £1bn committed acquisition facility and the Group has a £50m revolving credit facility with NatWest bank. These facilities were extended from 2028 to 2030 in September 2024. In September 2024 the Group received £520m preferred equity investment from a consortium of investors.
The company is party to cross guarantee arrangements relating to a borrowing facility provided by Ares Management to RSK Group Limited. The amount borrowed under this agreement as at 31 March 2024 is £1,060,136,000 (2023 - £765,384,000). The company has received a letter of support from its parent company that it will continue to receive support in respect of this.
The facilities will finance growth, both organic and acquisitive and associated working capital requirements.
After a thorough review, the Group's consolidated business plan, forecasts and projections show that it is expected to operate within its facilities.
The Group has established contracts and master service agreements with several customers across a wide range of sectors and markets and has a significant pipeline of committed work, tenders in progress and opportunities. The Directors believe that the Group will continue to manage its business risks successfully despite uncertain economic conditions in some business sectors and countries.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue to operate for the foreseeable future, being a period of at least twelve months after the date on which the report and financial statements are signed. Accordingly, they have continued to adopt a going concern basis in the preparation of the annual report and financial statements.
Prior period errors
Historically, staff costs were fully allocated to administrative expenses. Following a review, it has been determined that apportioning staff costs between cost of sales and administrative expenses provides a more accurate reflection of the company’s performance
Relating to the prior period disclosed in these financial statements | |
Cost of sales | 13,018,633 |
Administrative expenses | (13,018,633) |
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Key sources of estimation uncertainty
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have the greatest level of uncertainty are addressed below:
(i) Amounts recoverable on contracts - £9,370,987 (2023: £8,270,724)
The company’s revenue policies (set out in revenue recognition policy below) are fundamental to how the Group values the work it has carried out in each reporting period. Contracts are assessed on a contract by contract basis, and estimations are made regarding amounts not invoiced based on the stage of completion of the service.This is included in note 14 of the financial statements.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the Company's activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.
In respect of long-term contracts for on-going services, turnover represents the value of work done in the period, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
- the amount of turnover can be measured reliably;
- it is probable that the company will receive the consideration due under the contract;
- the stage of completion of the contract at the end of the reporting period can be measured reliably; and
- the costs incurred and the costs to complete the contract can be measured reliably.
Long-term contracts are assessed on a contract by contract basis and reflected in the profit and loss account by recording turnover and related costs as contract activity progresses. Turnover represents the value of work done in the period, including estimates of amounts not invoiced, and is recognised by reference to the stage of completion. Operating profit includes attributable profit on long-term completed contracts and amounts recoverable on uncompleted contracts, the latter being included within debtors due within one year.
Government grants
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants relating to revenue are recognised in income over the period in which the related costs are recognised.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Current tax
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generate income.
Deferred tax
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
• Any deferred tax balances are reversed if and when all conditions for retaining associated tax balances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the different between the fair value of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Revaluation
Properties are initially recognised at cost and subsequently revalued to fair value, with any changes in value recognized in other comprehensive income and credited to the revaluation reserve, unless a decrease in value is recognised in the profit or loss. Revaluations are performed as required to ensure carrying amounts reflect fair value. Depreciation is based on the revalued amount, and useful lives are reassessed following each revaluation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Property |
2% on revalued amount |
Plant, fixtures and fittings |
15-33% straight line |
Motor vehicles |
25% reducing balance |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Debtors
Short-term debtors are measured at transaction price, less any impairment.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include all purchase, transport, and handling costs in bringing stocks to their present location and condition.
At each reporting date, inventories are assessed for impairment. If inventory is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss
Creditors
Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Joint arrangement
The company participated in one joint arrangement during the year.
Joint Operation Name |
Company's Share |
Principle Place Of Activity |
Principle Acitivity |
bWGM |
50% |
UK |
Design/installation of water and sewerage treatment plants |
Reported results and the financial position include the Companies own assets, liabilities, turnover and expenses in joint operations as well as the appropriate share of joint assets, liabilities, turnover and expenses measured in accordance with the Company’s participation interest defined in the terms of each joint arrangement.
Financial instruments
Financial assets and liabilities are recognised in the company’s balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets
Basic financial assets, including trade and other receivables, loans receivable from other Group companies, investments in subsidiary companies and cash and cash equivalents, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts discounted at the market rate of
interest. Such assets are subsequently carried at amortised cost using the effective interest method, less any provision for impairment.
Impairment of financial assets
At each reporting date the company assesses whether there is objective evidence that a financial asset is impaired. If such evidence exists, the company recognises an impairment loss which is measured as the difference between the carrying amount and the present value of the future cashflows, discounted at the original effective interest rate. Impairment losses are recognised in profit or loss.
Impairment losses are reversed if the reversal can be objectively related to an event occurring after the impairment was recognised. The reversal of the impairment will be recognised in profit or loss.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, hire purchase contracts and loans payable to other 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 future payments discounted at the market rate of interest.
Debt instruments are subsequently carried at amortised cost using the effective interest method.
Derecognition of financial instruments
A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire, or the company transfers the financial asset and substantially all the risks and rewards
of ownership have been transferred.
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled, or expires.
Turnover |
The analysis of the company's turnover for the year from continuing operations is as follows:
2024 |
2023 |
|
Rendering of services |
|
|
The whole of the turnover arose solely within the United Kingdom
Other operating income |
The analysis of the company's other operating income for the year is as follows:
2024 |
2023 |
|
Other grants received |
- |
215,400 |
Government grants |
- |
4,205 |
R & D Tax credit |
811,754 |
78,000 |
|
|
The total of £215,400 from 2023 relates to Green job grant income.
Operating profit |
Arrived at after charging/(crediting)
2024 |
2023 |
|
Depreciation expense |
|
|
Operating lease expense - plant and machinery |
|
- |
Profit on disposal of property, plant and equipment |
( |
( |
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Other interest receivable and similar income |
2024 |
2023 |
|
Interest income on bank deposits |
|
|
Interest payable and similar expenses |
2024 |
2023 |
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2024 |
2023 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
2024 |
2023 |
|
Engineers |
|
|
Sales and administration |
|
|
Management |
|
|
Directors |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2024 |
2023 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
191,095 |
247,099 |
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
The remuneration in the table above relates to 1 director (2023: 1) who are remunerated by the company. The other directors’ remuneration is borne by the company’s ultimate parent, RSK Group Limited. No direct recharge is made to the company for services provided, but an estimate of the cost of these directors’ time is incorporated into the management charge charged to the company from RSK Group Limited.
During the year the number of directors who were receiving benefits and share incentives was as follows:
2024 |
2023 |
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
2024 |
2023 |
|
Remuneration |
|
|
Company contributions to money purchase pension schemes |
|
|
The remuneration in the table above relates to 1 director (2023: 2) who are remunerated by the group. The other directors’ remuneration is borne by the group’s ultimate parent, RSK Group Limited.
Auditors' remuneration |
2024 |
2023 |
|
Audit of the financial statements |
|
|
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Taxation |
Tax charged in the profit and loss account
2024 |
2023 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
( |
- |
209,637 |
129,856 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
- |
Arising from changes in tax rates and laws |
|
- |
Total deferred taxation |
|
- |
Tax expense in the income statement |
|
|
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2024 |
2023 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Adjustments in respect of prior years |
( |
( |
Increase from effect of different UK tax rates on some earnings |
- |
|
Effect of revenues exempt from taxation |
- |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Decrease from effect of tax incentives |
- |
( |
Tax decrease from effect of adjustment in research and development tax credit |
( |
- |
Total tax charge |
|
|
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Tangible assets |
Properties |
Plant and machinery |
Office equipment |
Motor vehicles |
Total |
|
Cost or valuation |
|||||
At 1 April 2023 |
|
|
- |
|
|
Additions |
- |
|
|
|
|
Disposals |
- |
( |
( |
( |
( |
Transfers |
|
( |
|
( |
- |
At 31 March 2024 |
|
|
|
|
|
Depreciation |
|||||
At 1 April 2023 |
|
|
- |
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
- |
( |
( |
( |
( |
Transfers |
- |
( |
|
- |
- |
At 31 March 2024 |
|
|
|
|
|
Carrying amount |
|||||
At 31 March 2024 |
|
|
|
|
|
At 31 March 2023 |
|
|
- |
|
|
Revaluation
The fair value of the company's Property was revalued on
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
2024 |
2023 |
|
Plant, fixtures & fittings |
- |
110,301 |
Motor vehicles |
1,970,608 |
- |
1,970,608 |
110,301 |
Stocks |
2024 |
2023 |
|
Other inventories |
|
|
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Debtors |
Current |
2024 |
2023 |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
Other debtors |
|
|
Prepayments |
|
|
Accrued income |
|
|
Corporation tax debtor |
|
|
|
|
The corporation tax debtor relates to Research and Development Expenditure Credit.
Amount due by related parties and group undertakings and loan are interest free and due on demand.
As at 31 March 2024 there was a bad debt provision of £Nil (2023: £8,885)
Cash and cash equivalents |
2024 |
2023 |
|
Cash at bank |
|
|
Creditors |
2024 |
2023 |
|
Due within one year |
||
Loans and borrowings |
|
|
Trade creditors |
|
|
Amounts owed to group undertakings |
|
|
Social security and other taxes |
|
|
Other payables |
|
|
Accruals |
|
|
Group Relief |
108,694 |
187,872 |
Deferred income |
|
|
|
|
|
Due after one year |
||
Loans and borrowings |
|
|
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Amount due by related parties and group undertakings and loan are interest free and due on demand.
Loans and borrowings |
2024 |
2023 |
|
Non-current loans and borrowings |
||
Hire purchase contracts |
|
|
2024 |
2023 |
|
Current loans and borrowings |
||
Hire purchase contracts |
|
|
Provisions for liabilities |
Deferred tax |
|
At 1 April 2023 |
|
Fixed assets |
|
Pensions - P&L |
( |
RDEC - step 2 |
( |
Prior year adjustment |
( |
At 31 March 2024 |
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £1,055 (2023: £nil) were payable to the scheme at the end of the period.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Share capital |
Allotted, called up and fully paid shares
2024 |
2023 |
|||
No. |
£ |
No. |
£ |
|
|
|
21,622 |
|
21,622 |
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
2024 |
2023 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
- |
|
|
Dividends |
2024 |
2023 |
|||
£ |
£ |
|||
Final dividend of £ |
5,500,000 |
500,000 |
||
Contingent liabilities |
The company is party to cross guarantee arrangements relating to a borrowing facility provided by Ares Management to RSK Group Limited. The amount borrowed under this agreement at 31 March
2024 is £1,060,136,000 (2023: £765,384,000).
The company is also a guarantor of any trading and other obligations of any RSK Group member that may be a Junior Creditor in the related Subordination Deed.
W.G.M (Engineering) Limited
Notes to the Financial Statements for the Year Ended 31 March 2024
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
These financial statements are available upon request from Companies House, Crown Way, Cardiff, CF14 3UZ.