The directors present the strategic report for the year ended 31 December 2024.
We aim to present a balanced review of the development and performance of the business during the year and its position at the year end. Our review is consistent with the size and relatively non-complex nature of the business and mindful of the risks and uncertainties we face.
The business review has been prepared solely to provide information to stakeholders as a body to assess the Group's strategies and the potential for those strategies to succeed. The review should not be relied on by any other party or for any other purpose.
The business’ principal customers are steel stockholders where the main risk is any significant reduction in steel demand and a deterioration in steel prices. There also remains an underlying problem of uncertainty caused by both EU/UK Safeguard quotas and stubbornly high inflation, which is stalling any general economic recovery.
The Group continues to insure its trading debts.
The Group’s principal foreign currency exposures arise from trading with overseas companies. Group procedure provides, but does not demand, that these exposures may be hedged in order to fix the cost in sterling. The hedging activity involves the use of foreign exchange forward contracts.
We consider our key performance indicators to be those that reflect the Group's financial performance and overall strength: turnover, gross profit margin, profit before tax, and net assets.
| 2024 | 2023 | 2022 |
|
| £000s | £000s | £000s |
|
Turnover | 85,813 | 97,203 | 129,304 |
|
Gross profit margin | 7.52% | 7.00% | 16.93% |
|
Profit before tax | 1,790 | 2,300 | 17,027 |
|
Net assets | 25,714 | 28,475 | 30,242 |
|
Despite challenging market conditions, the Group achieved satisfactory results, particularly in terms of gross profit margin and overall profitability. Whilst turnover decreased by 11.7% compared to the prior year, it is important to note that the volume of steel sold remained virtually unchanged. The decline in turnover was solely attributed to the reduction in steel prices as a commodity.
These results are commendable given the broader economic challenges. The UK economy remained depressed, with high interest rates discouraging investment. Delays in Government infrastructure projects due to stricter fiscal controls further constrained construction activity, leading to reduced steel demand and declining steel prices.
In addition, the industry faced continuing pressures, including ongoing business failures at the main contractor level, which has now begun to affect steel fabricators and structural engineers. Steel consuming businesses also faced rising costs due to significant increases in employment, storage and logistics costs, persistently high energy prices and finance charges.
The Group is a mostly office based environment so has a relatively small carbon footprint but it takes its environment responsibilities seriously. The Group currently operates two sites that have solar panels and electric car charging points to encourage employees to use electricity to run their private cars. Water heating is also provided by a ground source heat pump at one of the sites.
Employees
The Group holds regular open staff meetings where staff are encouraged either there, or in private, to raise any concerns. The Group prides itself on employee satisfaction and with no complaints and small staff turnover, it is considered that employees are satisfied. There are no formal training programs in place but employees are encouraged to carry out continuous professional development in languages etc.
Future prospects
The outlook for 2025 remains challenging, but there are signs of improvement. Destocking throughout the supply chain appears to be near completion and rising fundamental costs in steel manufacturing typically encourages stock replenishment to pre-empt price increases.
European protectionist measures in response to the 25% tariff on US steel imports, combined with the EU/UK introduction of the Carbon Border Adjustment Mechanism (CBAM) are likely to drive further steel price inflation.
Whilst such higher steel prices may not stimulate building activity, they present profit opportunities for a business like All Steels Trading, which holds significant inventories to provide a rapid supply service.
Operationally, the business is strong. The new storage facility in Scunthorpe has successfully helped to alleviate previous storage constraints and is now integral to our operations. Additionally, soon after the date of these accounts, we will have exchanged contracts for large warehousing and outdoor storage facilities in West Bromwich, West Midlands adding some 8,000 tonnes of storage capacity. The expansion enhances our ability to better serve our customers and manage inventory more efficiently.
Looking ahead, we anticipate that Bank of England base rate cuts will continue, leading to meaningful reductions in financing costs. Furthermore, it seems increasingly likely that the Government will move forward with essential infrastructure projects, which should positively impact steel demand.
Our average stock pricing is well positioned with nearly all current inventory below replacement cost, providing a solid competitive advantage.
As a mature business with excellent staff retention, we are well placed to leverage our extensive industry knowledge and experience. Our skilled team continues to drive business development, introducing new product streams to diversify and strengthen our portfolio.
We also maintain a robust balance sheet, which provides financial stability and inspires confidence among our suppliers. This solid foundation, coupled with strong and long established relationships with suppliers and customers, underpins the Group's long-term success.
A related party, Bromford Iron Ltd, is no longer considered a going concern. Bromford Iron is in the process of going through a managed closure with All Steels Trading providing support. Management have carried out a full impairment review of the impact of the managed closure of Bromford Iron on the financial statements of All Steels and any balances due to the Group from Bromford Iron are recognised at their expected recoverable amount.
The directors have carefully reviewed and stress-tested financial forecasts, which indicate that the Group remains profitable and operates well within its borrowing facilities. With the continued support of HSBC, the directors are confident that the Group remain a going concern.
The ability to generate a commendable profit in a depressed 2024 underscores the resilience of the business and the dedication of our team. The directors wish to express their gratitude to all employees and associates of All Steels Trading for their professionalism, energy, and commitment throughout a challenging year.
The directors are aware of the importance of undertaking regular and ongoing training to support regulatory requirements. There is currently an informal induction process for new directors, with presentations and materials delivered as part of the induction process. Going forward, it is anticipated that a regular and ongoing directors training programme will be developed to support broader regulatory requirements, cascaded to senior managers as required.
The Group holds regular meetings throughout the year and is supported by management and various departmental divisions providing timely and detailed information in support of the Board’s decision making. The Board operates an agenda of items appropriate to the size and complexity of the business. Items requiring Board approval are clearly defined and will include; new bank facilities, investment proposals, including acquisitions and disposals, and significant changes to the way health and safety is managed and monitored.
The Board receives monthly reports on the operating and financial performance of the business including current and forecast financial information in order to assist in making informed decision-making and strategic planning.
The Board ensures that appropriate policies are in place in relation to matters including anti-slavery and human trafficking, anti-bribery and corruption and the Group's tax strategy.
Where appropriate the Board will consult with professionals or other organisations to assist with decision making and help consider the likely consequences of the decision in the long term. The interests of all key stakeholders including the Group's employees, suppliers, customers and the wider community are considered as part of the decision-making process. The Group actively engages with key stakeholders through employee, customer and supplier feedback in the form of surveys and one-on-one meetings.
Principal decisions are undertaken by the Board following a thorough review process to take account of stakeholder and operational benefits to the business.
Culture
The Group's culture combines a family business ethos with a commitment to high quality across everything we do including corporate governance and general business conduct. The Group's relationships with its stakeholder community are central to this.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 11.
The consolidated profit before tax amounted to £1.79m (2023: £2.30m).
Ordinary dividends were paid amounting to £3,989,500 (2023: £3,475,000). 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:
Saffery LLP have expressed their willingness to continue in office.
The Group has followed the 2019 HM Government Environmental Reporting Guidelines. The Group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2023 UK Government’s Conversion Factors for Company Reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee.
The Group has on site electric car charging points to encourage staff to purchase private electric cars. The Group have also installed solar panels to the office to reduce reliance on grid provided power.
During 2024 the business again selected The King’s Trust as its main vehicle for charitable donations. Each four year cycle commitment totals £100,000 that is supporting 100 young people to go through The Trust’s training and education programme to get into employment. Such a commitment continues to award the business with a patronage status of The Prince’s Trust.
The Group also made sizable charitable donations to Yorkshire Children's Charity.
We have audited the financial statements of All Steels Trading Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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
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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report 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.
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 the audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: 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 parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £3,979,500 (2023 - £975,000).
All Steels Trading Holdings Limited (“the company”) is a private Company limited by shares incorporated in England and Wales. The registered office is Vulcan House, York Road, Thirsk, North Yorkshire, YO7 3BT.
The Group consists of All Steels Trading Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 for parent Company information presented within the consolidated financial statements:
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.
The consolidated Group financial statements consist of the financial statements of the parent company All Steels Trading Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors are confident that the Group has adequate resources to continue in operational existence for the foreseeable future.
The financial forecasts have been reviewed and sensitised and these show the Group remaining profitable and trading within borrowing facilities. The Group retains the support of HSBC and are pleased to confirm that the facilities are sufficient to meet the anticipated requirements for the forthcoming year. Based on the detailed forecasts, healthy current trading position and this continued support, the directors are confident that the company will remain a going concern.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
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.
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 recognised in the income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The Group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include trade and other debtors, and amounts owed by group undertakings, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its liabilities.
Basic financial liabilities, including trade and other creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
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 group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 Group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 statement of financial position 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.
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.
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 in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying value 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.
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.
Provisions are made for bad and doubtful debts and impaired stock. These provisions require management's best estimate of the recoverability of trade debtors and the expected future use of stock.
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £346,598 (2023 - £136,048).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
As described in accounting policy 1.11 and further in note 16, derivative forward currency contracts are measured at fair value by reference to the relevant forward exchange rates at the year-end, with the movement taken through profit and loss, as presented above. The contracts mature within 6 months of the year-end. The directors consider that the criteria for adopting hedge accounting as set out in FRS102 have not been met in relation to the contracts in place at the year-end and thus the fair value of the hedged items has not been measured.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
No depreciation charge has been made in respect of freehold buildings because the asset is in the course of construction and is not available for use.
Details of the Company's subsidiaries at 31 December 2024 are as follows:
The Company enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency payables. At 31 December 2024, the outstanding contracts all mature within 6 months (2023: 8 months) of the year end. The Group is committed to buy US$19,900,000 (2023: US$20,790,000), and sell US$nil (2023: US$nil) and buy €nil (2023: €nil) and sell €nil (2023: €nil) and pay/receive a fixed sterling amount.
Forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for GBP:USD and GBP:EUR. The fair value of the forward foreign currency contracts is an asset of £511,382 and a liability of £15,315 (2023: asset: £1,280 and a liability of £272,592). The directors consider that the criteria for adopting hedge accounting as set out in FRS102 have not been met in relation to these contracts and thus the fair value of the corresponding hedged items has not been measured.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The leases are secured over the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
During the year beginning 1 January 2025 the net reversal of deferred tax liabilities is expected to increase the corporation tax charge for the year due to the reversal of accelerated capital allowances.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
During the year 4,923 ordinary shares were redesignated as 4,431 A ordinary shares and 492 B ordinary shares.
A ordinary shares and B ordinary shares carry the same rights to voting, dividends and to participate in a distribution.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
Interest of £nil (2023: £7,949) was charged in the year on amounts due from related entities. Interest of £nil (2023: £350,977) was charged in respect of overdue receivables from related entities.
The group occupies a property owned by a pension scheme set up for the benefit of one of its directors. During the current year, rent of £83,750 (2022: £83,750) was paid to the pension scheme in respect of this property.