Registered number:
FOR THE YEAR ENDED 31 AUGUST 2024
Whitings LLP
Chartered Accountants & Business Advisers
Greenwood House
Greenwood Court
Skyliner Way
Bury St Edmunds
Suffolk
IP32 7GY
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NASON DAVIS HOLDINGS LIMITED
COMPANY INFORMATION
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NASON DAVIS HOLDINGS LIMITED
CONTENTS
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NASON DAVIS HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
The board presents their statement for the period.
The last financial year proved to be challenging as our industry started to correct the over reaction and over production in supply post the Russian invasion of Ukraine. This correction has been continuing throughout the financial year.
This removal of a traditional supply from Europe has had a significant impact on the dynamics of supply as countries who had previously had more reliance on supply from Belarus, Ukraine and the Russian Federation switched back to a focus on the Nordic Countries. In turn the Nordic suppliers increased production with investments from profits made during and post Covid. The strong demand continued into early 2023, but then weakened with less activity in either the US or Chinese domestic markets, where they had over capacity in housing along with less global activity for their products. Combined with the inflationary surge in Europe and the multiple raising of interest rates, this meant companies de-stocked, and high inflation suppressed domestic consumer consumption which resulted in lowering demand in many of our sales areas. As a result our group turnover increased from £53.26 million to £54.68 million but our group gross profit fell from £6.06 million to £5.87 million. UK - Nason Davis Ltd In the UK, housing starts fell away year on year further reducing UK consumption. Selling prices fell back to pre-Covid levels as suppliers chased orders to sell their stocks resulting in significant reduction in sales prices during the year. This all impacted our average sales prices, which fell by approximately 20% and inevitably affected our gross margin. Despite these trying market circumstances, re-assumingly, our sales volume expanded in line with budget expectations by 3% but the reduction in sales price directly affected the final market price and our subsequent resultant margin. Our turnover was reduced from £43.89 million to £43.08 million but our gross profit fell from £3.03 million to £2.81 million. The increase in sales volumes demonstrates the now completed integration of sales and operations post the Roger Mitchell (UK) Ltd acquisition. Positively we see volumes continuing to head upwards as our increase in supply, sales market coverage and staff familiarisation continue to develop. Japan - Japanese operations In Japan we had a mixed year. Japan was not subject to the environmental and economic sanctions that Europe applied and as a consequence exports from the Russian Federation to Japan grew markedly, aided by competitive export pricing compared to other supply markets. Soon Japan was overstocked leading to a noteworthy drop in new orders which continued throughout our financial period. Our sales volumes from Estonia to Japan suffered a significant drop. Now stocks are finally being adjusted or utilised we are expecting market conditions in Q1 and Q2 2025 to still be awkward but gradually to see a return to more normal trading conditions. Estonia - Nason Davis Eesti OÜ In Estonia, Nason Davis Eesti OU has ownership of a processing plant, as well as two further significant investments in a processing plant and pallet collar production. With the price correction across the market, while turnover increased, profit decreased compared to the previous financial year as well as production volume decreasing owing to the very tough trading climate.
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NASON DAVIS HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
Turnover increased by 8% compared to 2023 and despite pressure on margins the Estonian group increased the balance sheet by just over 2%. The majority of the turnover is value-added from our own production. Sales to Japan accounted for 52% of turnover, 21% to the UK, 13% to France and 7% within Estonia. In the 2022/23 financial year, the distribution in terms of major markets was 40% to Japan, 32% to the UK, 16% to France and 7% within Estonia.
The principal risk we face is the economic indicators for timber in our key markets.
The group trades primarily in Sterling and Euro. Where we buy in other currencies, our currency risk is mitigated with forward contracts purchased to cover exposure. More volatile changes in the cross rate between Sterling and other currencies can have an impact on our business in the day-to-day market. The group mitigates its bad debt risk by securing terms that guarantee the payment, either by insuring against its debtor book or by other means of security. In all aspects of our purchasing we follow the regulations set by UKTR and EUTR as well as having FSC and PEFC certification for chain of custody in the UK and Estonia. We exercise continued improvement for our environmental credentials throughout our group activities. Outlook The 2024-2025 UK market is hard to forecast as despite the uncertainty, we now see stronger sales prices as overall stocks are more in balance. Significant pressure on sawmills’ raw material supply is resulting in significant increases in their forward prices in the first half of 2025. All eyes will be across the Atlantic now following the recent change in leadership and with the threat of punitive tariffs imposed on Canadian lumber exports to the USA. This may give a significant advantage to European exporters to that market. Major European producers are likely to respond with increases in export sales offshore, all sourced from a declining basket of raw material supply, which will likely result in a price surge here. Following the UK 2024 autumn budget we have some concern as this has exacerbated flagging consumer confidence, the slowing in the predicted reduction of interest rates and flat demand. UK housing starts seems to have bottomed out, the number of starts are set to move upward albeit slowly once more & we are well placed to benefit. We hope we will see a return to some market stability at the end of Q1 2025 and that we can maintain our aim of expanding the business and further increasing the balance sheet. In Estonia, we will continue with additional investments into the automation of the production process. We aim to increase sales of various value-added products to Europe and Asia and intensify cooperation with existing suppliers and customers. Finally, as always we could not achieve our continuing expansion without the dedication and skill of our staff and would very much like to thank them for their support and endeavours once again.
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NASON DAVIS HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The key performance indicators that we use for measuring performance of the Group are detailed below:
This report was approved by the board and signed on its behalf.
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NASON DAVIS HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
The directors present their report and the financial statements for the year ended 31 August 2024.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £778,944 (2023 - £1,586,615).
The directors who served during the year were:
There are no major changes planned to the business, its customers or suppliers. Future developments are included in the Strategic Report.
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NASON DAVIS HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
There are no major changes planned to the Group, its customers or suppliers. Further developments are included in the Strategic Report.
The auditors, Whitings LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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NASON DAVIS HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NASON DAVIS HOLDINGS LIMITED
We have audited the financial statements of Nason Davis Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 August 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 or the 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.
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NASON DAVIS HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NASON DAVIS HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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NASON DAVIS HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NASON DAVIS HOLDINGS LIMITED (CONTINUED)
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 Auditors' 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙Enquiry of management about any known or suspected instances of non-compliance with laws and regulations, and fraud;
∙Enquiry of management around actual and potential litigation and claims;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
∙Challenging assumptions and judgements made by management in their significant accounting estimates; and
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the course of normal business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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NASON DAVIS HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NASON DAVIS HOLDINGS LIMITED (CONTINUED)
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 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 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
Chartered Accountants & Statutory Auditor
Greenwood House
Greenwood Court
Skyliner Way
Suffolk
IP32 7GY
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NASON DAVIS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
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NASON DAVIS HOLDINGS LIMITED
REGISTERED NUMBER: 09382572
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2024
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NASON DAVIS HOLDINGS LIMITED
REGISTERED NUMBER: 09382572
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 41 form part of these financial statements.
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NASON DAVIS HOLDINGS LIMITED
REGISTERED NUMBER: 09382572
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 41 form part of these financial statements.
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