The directors present the strategic report for the year ended 30 November 2024.
The Directors report another year of stability and growth for the business driven by increased revenue from existing customers and new Warehousing business established within the year. Economic trading conditions were tough throughout 2024 which resulted in significant costs that impacted the results of the business but were managed well considering the circumstances.
Our strategy remained focused on a customer first environment that continually strives add value as their 3PL provider and provide a solution that enables growth to be achieved. Opportunities to become a valued logistics partner remain prevalent where prospective customers have the desire to reduce their fixed cost base and seek value added opportunity with a 3PL partner that is heavily focused on Continuous Improvement.
Headline revenue for the year grew by £14.9m (29%) whilst our profit before tax increased by £328k (17.8%) when compared to 2023. Operating Profit and EBITDA increased by £803k (21.4%) and £1.2m (20%), both of which are measures used by management to determine underlying trade performance.
Capital investment within the year was limited to the development of our own Transport Management System and the infrastructure required to facilitate the use of electric commercial vehicles. This follows significant investment in our warehousing sites over the course of the last few years as our focus shifts towards realising the investment and focus on technological advances.
Warehouse occupancy levels reached capacity within the year as we onboarded a number of new customers from a transaction with a local Warehousing business whereby we purchased the customer book and migrated the stock to our facilities. Our sales strategy is now geared towards Contract Logistics which offers a scalable, value added partnership which consists of bespoke solutions built around the customer’s needs.
Investment in our people remained one of the highest priorities throughout the year as it is recognised that development and the welfare of our people is the key to our success. We continue to attract the industry's talent by operating a culture of opportunity with career progression for those who wish, which is extremely important in a growing business such as Expect.
Benchmarking of pay rates and employee benefits were undertaken in the year across the workforce and increases awarded to maintain our position in the upper quartile of the market. It is as important as ever that our colleagues are appropriately remunerated given current cost of living increases, but also that our benefits package remains industry leading and contributes to their well-being accordingly.
Our priorities continue to remain the health, safety and well-being of those employees and on delivering strong service levels for all our customers. The directors would like to recognise the dedication of all Expect colleagues once again and thank all involved in making the year a success despite difficult trading conditions.
Financial risk management objectives and policies
The Group operates mainly in the UK and seeks to mitigate exposure to all forms of risk both internal and external.
Customer and suppliers
The group is not wholly dependant on any one main customer or supplier and has a low concentration risk across the customer base.
Credit risk
The group seeks to reduce risk by carrying out credit checks on new customers and operating strict credit control on its debtor ledger.
Laws and regulations
The group complies with all road traffic, health and safety and employment law an takes its responsibilities very seriously.
Employees
The group continues to be an equal opportunities employer. In employment related decisions, the group complies with anti-discrimination requirements concerning matters of race, colour, national origin, marital status, sexual orientation, religious belief, age and physical or mental ability. Disabled people are given full and equal consideration for employment and their development is assisted and encouraged.
The group's key performance indicators during the year were as follows:
| 2024 | 2023 |
Turnover | 66,641,859 | 51,693,456 |
Gross Profit | 19,860,947 | 16,300,363 |
Gross Profit Margin | 30% | 32% |
Operating Profit | 4,561,259 | 3,758,081 |
The Board of Directors of Expect Distribution Group Ltd have, when making decisions, acted in a way they believe to be in good faith and will duly promote the success of the group for the benefit of its members as a whole, and in doing so have had a regard to stakeholders and the matters set out in subsections 172(1)(a-f) of the Companies Act 2006.
In making this statement the directors have considered the following maters:
1. Consequence and long term impact of decisions made:
The board review the group strategy on a regular basis and ensure that decisions made are supportive of that strategy and are appropriate to the long term success of the group. Project appraisal documents are produced which comprehensively demonstrate the viability of future investments to ensure they are of benefit to the business.
2. Interests of its employees
Our people are at the heart of our success and are critical to the future of the business and its related success. We endeavour to be an employer of choice that recruits, retains and develops to the highest of standards that in turn will be represented in their career at Expect. Our decisions are always made with our colleagues at the forefront of our minds to ensure their interests are well protected.
3. The need to foster business relationships with customers, suppliers and others
Expect has developed and built on the strength of its long term relationships that it holds with its customers and suppliers. Our mission is to be the best in the industry and fostering relationships is one of the key requirements to ensure we are delivering the best possible service to our customers and working effectively with suppliers.
4. Impact on the community and the environment
Sustainability in our operations is a topic that is of high regard to the board of directors in their conduct and decision making. Our strategy includes a high level of consideration to ensuring we are investing in the newest technology that minimises impact on the environment and our carbon footprint. We are a supporter and sponsor of the local authority in Bradford, ensuring that we give back to the community and support its development.
5. Desirability to maintain a reputation of high standards and business conduct
The board are responsible for setting and delivering the culture, values and reputation of the group. Our colleagues are fundamental to achieving our ambition to be the best in the industry and we are continually developing a culture that allows our colleagues to prosper. Regular training is carried out with our colleagues to ensure that the code of ethics and conduct are continually reinforced in the way that we operate.
6. The need to act fairly as between members of the company
The group always seeks to ensure that its communications are transparent and in accordance with the strategy of the business to ensure the long term success is supported. Decisions are made with fairness of all key stakeholders in mind and ensuring that decisions are made in the best interests of its members.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 November 2024.
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £435,470. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Our people are the face of the Expect brand and the high standard of services we offer to our customers. The culture amongst our colleagues is of extreme importance to the board of directors and employee engagement is fundamental to upholding the culture and values that we operate to.
We are an equal opportunity employer that strives to be an employer of choice, recruiting industry leading talent that will perform to their potential. Our recruitment and retention strategy is continually reviewed to ensure we remain ahead of the market and offer pay and benefits that stand out from the rest.
The Directors are committed to promoting a healthy workforce with focus on mental health and wellbeing, whilst demonstrating a culture of openness to keep colleagues informed of key developments within the business.
During the year the board of directors have engaged with colleagues through the following methods:
Regular employee forums that create a platform for cross directional information exchange and engagement
Line managers hold regular one to one meetings with their reports which play a key part in personal development and information exchange
Annual employee survey with associated action plans to address key themes that arise and require considered change
Benchmarking and review of pay rates resulting in an industry leading increase that remains in the upper quartile of the market
Review of the voluntary benefits package we have in place to ensure they are industry leading and support work life balance and personal care
Bi-monthly newsletters that include key business updates alongside publications from colleagues and their respective efforts within the business
Induction programmes for all new employees joining the Expect family to ensure they understand how the business operates and allowed the opportunity to meet their colleagues
Warehouse to Wheels upskill programme introduced, investing in existing employee development and allowing a funded career progression route to becoming a driver
Apprenticeship programme enhanced to upskill our existing employees, utilising the levy that was introduced by the government
In house and external training packages offered out to all employees within the business with a healthy budget assigned to development
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Expect Distribution Group Limited are committed to continually developing its infrastructure and investing in energy efficient operating equipment to reduce the overall effect it has on the environment.
Fleet efficiency and reduced empty running are consistently measured and focused on throughout the business, creating partnerships where possible to reduce the overall mileage travelled. Our membership of the Palletline network allows us to reduce the stem mileage associated with our deliveries by selecting the optimal route for the consignment.
Forklift equipment is renewed periodically with over 80% of our fleet now operating with rechargeable electric motors rather than the traditional gas engine. Our renewal policy of 5 years on such equipment ensures we are investing in the most recent technology when renewing equipment.
Alternative fuel vehicles are a firm part of Expect’s replacement vehicle strategy with pilot schemes currently in place to assess viability across certain parts of the operation.
Energy consumption for the annual period of reference are stated in the table below for each respective fuel type used within Expect Distribution Group Ltd:
Fuel Type | 2024 kWh | 2024 CO2e (tonnes) | 2023 kWh | 2023 CO2e (tonnes) |
Diesel – Vehicles | 31,141,963 | 7,637 | 30,042,200 | 7,367 |
Electricity | 811,887 | 172 | 783,919 | 167 |
Gas | 376,835 | 69 | 528,512 | 97 |
Total | 32,330,686 | 7,879 | 31,354,631 | 7,631 |
The intensity ratio based on total gross emissions was 11.82 (2023 – 14.76) tonnes CO2 per £100,000 of sales revenue.
We have audited the financial statements of Expect Distribution Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, 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
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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
Extent to which the audit was considered 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias; and
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
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 £8,645,379 (2023 - £299,362 profit).
Expect Distribution Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Premier Point Premier Gate, Staithgate Lane, Bradford, West Yorkshire, BD6 1DW.
The group consists of Expect Distribution Group 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 £1.
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 the parent of a group that prepares publicly available consolidated financial statements, 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 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: 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
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS102 which permit it to not present details of its transactions with members of the group where relevant group companies are all wholly owned.
The consolidated group financial statements consist of the financial statements of the parent company Expect Distribution Group 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 30 November 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The directors have considered all factors, including in the wider economy, as part of their assessment of going
concern. Although the current economic climate creates both cashflow and profitability risks for the group, the
group continues to trade profitably and is cash generative. Budgets and cashflows have been prepared using
assumptions for customer demand and supply chain costs as well as expectations for legal and regulatory
environmental impacts. The Directors have prepared detailed cash flow projections which show that the Group is expected to generate sufficient funds to meet liabilities as they fall due. Consequently the directors believe on balance that they have sufficient resources to enable trading to continuefor a period of at least one year from the date of approval of the financial statements. Accordingly, these financial statements have been prepared on the going concern basis.
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 contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimtated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Assets under construction are not depreciated until the completed asset is available for use.
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
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 and intangible 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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 balance sheet 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, 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 creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the 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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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 balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
The depreciation and amortisation policies have been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation and amortisation charged during the year was £2,692,628 which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
Amortisation on goodwill is being spread over 20 years. The directors have considered the length of historical customer contracts, and considered the approximate amount of time the group expects to receive benefits from the acquisiton of goodwill. Amortisation for the year totalled £1,474,019.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2023 - 2)
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Freehold land and buildings with a carrying amount of £3,024,489 (2023 - £2,858,665) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
Details of the company's subsidiaries at 30 November 2024 are as follows:
Expect Group Limited and Crossways Commercials Limited were entitled to exemption from audit under section 479A of the companies act 2006 relating to subsidiary companies. Expect Distribution Group Limited has provided a guarantee under section 479C.
Amounts owed by group undertakings are repayable on demand.
Amounts owed to group undertakings are repayable on demand.
The long-term loans are secured by fixed and floating charges over the freehold and leasehold property, including fixtures and fittings that Expect Distribution Group hold and may hold in the future.
The group will repay loans at £104,166,67 per month. Interest is charged on the loans as follows:-
Facility A - 6.25% above LIBOR per annum
Facility B - 6.75% above LIBOR per annum
Other loans are in relation to an invoice discounting facility. Amounts are all due within one year.
Finance lease payments represent rentals payable by the company or group 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. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.
The UK corporation tax rate was 25% throuhgout the year. Deferred tax balances at the reporting date are therefore measured at 25% (2023 - 25%).
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.
Each share is entitled to one vote in any circumstances. Each share is entitled pari passu to dividend payments or any other distribution, whereas payment of dividend to one class of shares does not automatically entitle holders of all other classes of shares to payment of a divdend.
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:
Dividends totalling £435,470 (2023 - £414,600) were paid in the year in respect of shares held by the company's directors.