HARDWOOD SALES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Company Registration No. 05577418 (England and Wales)
HARDWOOD SALES LIMITED
COMPANY INFORMATION
Directors
Mr J McCoy
Mr M A Collins
Mrs N J Collins
Mrs S McCoy
Mr A S Massey
Mr D Jones
Mr J A Coogan
(Appointed 1 October 2024)
Secretary
Mr M A Collins
Company number
05577418
Registered office
Huyton Business Park
Ellis Ashton Street, Off Wilson Road
Huyton
Liverpool
L36 6BN
Auditor
DSG Audit
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
HARDWOOD SALES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
HARDWOOD SALES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

The directors present the strategic report for the year ended 31 December 2024.

Principal activities
The principal activity of the company continues to be that of a timber merchant.
Review of the business

The results for the year and the financial position at the end were considered satisfactory by the directors. The results for the company show a pre-tax profit of £517,721 (2023: £704,255) for the year and turnover of £19,648,591 (2023: £20,144,786). The company has net assets of £4,454,765 (2023: £4,403,067).

 

The company has performed in line with expectations in an uncertain economic environment.

Principal risks and uncertainties

We have set out below a number of risk factors that we believe could cause our actual future results to differ materially from expected results. However, other factors could adversely affect the results so the factors set out below should not be considered to be a complete set of all potential risks and uncertainties.

 

Business conditions and the general economy

The profitability of the company could be adversely affected by a worsening of general economic conditions in the United Kingdom. Whilst a short term worsening in the economic conditions in the United Kingdom should not significantly adversely impact profitability, a sustained downturn over a number of years would be likely to lead to reduced profit in this area.

 

Credit risk

Credit risk is a constant risk and all new customers are reviewed and their financial position assessed before acceptance. The debt from existing customers is monitored on a regular basis to reduce the cash flow risk.

 

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

 

Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

 

Interest rate risk

The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

 

The current circumstances provide different challenges, but the directors feel that the company is in a strong position to cope with these challenges.

HARDWOOD SALES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Development and performance

The company remains in a strong position, having broadened its customer base during the year.

Key performance indicators

Measure        2024        2023

Turnover            £19.6m        £20.1m

Gross profit        £5.2m        £4.9m

Operating profit        £0.6m        £0.7m

 

The company has focussed on maintaining margins during this uncertain time, fulfilling its expectations and will continue to focus on this area in the forthcoming year.

On behalf of the board

Mr M A Collins
Director
2 June 2025
HARDWOOD SALES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2024.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £300,000. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J McCoy
Mr M A Collins
Mrs N J Collins
Mrs S McCoy
Mr A S Massey
Mr D Jones
Mr J A Coogan
(Appointed 1 October 2024)
Future developments
The company will continue to seek new opportunities, and expand business, but also to maintain margins.
Auditor

DSG resigned as auditor on 11 September 2024. DSG Audit were appointed on 11 September 2024 as auditor to the Company and in accordance with Section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. The company has done so in respect of principal activities and financial instruments.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr M A Collins
Director
2 June 2025
HARDWOOD SALES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

HARDWOOD SALES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARDWOOD SALES LIMITED
- 5 -
Opinion

We have audited the financial statements of Hardwood Sales Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

HARDWOOD SALES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARDWOOD SALES LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Capability of the audit in detecting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements.

 

During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. The following laws and regulations were identified as being of significance to the entity:

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of journal entries and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

HARDWOOD SALES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARDWOOD SALES LIMITED (CONTINUED)
- 7 -

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jean Ellis BA FCA CTA (Senior Statutory Auditor)
For and on behalf of DSG Audit, Statutory Auditor
Chartered Accountants
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
2 June 2025
HARDWOOD SALES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
19,648,591
20,144,786
Cost of sales
(14,451,574)
(15,216,271)
Gross profit
5,197,017
4,928,515
Administrative expenses
(4,630,472)
(4,174,934)
Operating profit
4
566,545
753,581
Interest payable and similar expenses
7
(48,824)
(49,326)
Profit before taxation
517,721
704,255
Tax on profit
8
(166,023)
(247,919)
Profit for the financial year
351,698
456,336

The notes on pages 11 to 23 form part of these financial statements.

HARDWOOD SALES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,237,986
1,031,566
Current assets
Stocks
11
2,510,721
2,553,136
Debtors
12
5,311,112
4,794,594
Cash at bank and in hand
383,157
379,613
8,204,990
7,727,343
Creditors: amounts falling due within one year
13
(3,525,526)
(3,349,955)
Net current assets
4,679,464
4,377,388
Total assets less current liabilities
5,917,450
5,408,954
Creditors: amounts falling due after more than one year
14
(476,523)
(379,321)
Provisions for liabilities
Provisions
16
794,564
394,564
Deferred tax liability
17
191,598
232,002
(986,162)
(626,566)
Net assets
4,454,765
4,403,067
Capital and reserves
Called up share capital
19
300
300
Profit and loss reserves
4,454,465
4,402,767
Total equity
4,454,765
4,403,067

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 2 June 2025 and are signed on its behalf by:
Mr M A Collins
Director
Company registration number 05577418 (England and Wales)
HARDWOOD SALES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2023
300
3,946,431
3,946,731
Year ended 31 December 2023:
Profit and total comprehensive income
-
456,336
456,336
Balance at 31 December 2023
300
4,402,767
4,403,067
Year ended 31 December 2024:
Profit and total comprehensive income
-
351,698
351,698
Dividends
9
-
(300,000)
(300,000)
Balance at 31 December 2024
300
4,454,465
4,454,765
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
1
Accounting policies
Company information

Hardwood Sales Limited is a private company limited by shares incorporated in England and Wales. The registered office is Huyton Business Park, Ellis Ashton Street, Off Wilson Road, Huyton, Liverpool, L36 6BN.

 

The principal activities of the company are disclosed in the Strategic Report.

1.1
Accounting convention

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

This information is included in the consolidated financial statements of Hardwood Sales Holdings Limited as at 31 December 2024 and these financial statements may be obtained from Huyton Business Park Ellis Ashton Street, Off Wilson Road, Huyton, Merseyside, United Kingdom, L36 6BN.

1.2
Going concern

The directors have considered the impact of potential operational trueand financial challenges posed by the current economic situation, including but not restricted to, an assessment of the robustness of their supply chain and broader logistics arrangements. The directors have concluded that any operational and financial pressures caused directly by the current economic situation are unlikely to have a material impact on the company. The company has a strong asset base and cash reserves available.

 

Based on the above, the directors consider it appropriate to prepare these financial statements on a going concern basis.

1.3
Turnover
Turnover represents amounts receivable for goods net of VAT and trade discounts.

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.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 12 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and machinery
20% straight line
Fixtures, fittings & equipment
33% straight line
Motor vehicles
25% reducing balance

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 credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.8
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

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

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.

Impairment of financial assets

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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities

Basic financial liabilities, including creditors 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.

 

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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Deferred tax

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 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.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.12
Employee benefits

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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

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 leases asset are consumed.

HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Assessing operating lease commitments

The company has entered into leases as a leasee obtaining the use of land and buildings and other tangible fixed assets. The classification of such leases as operating or finance lease requires management to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the Balance Sheet.

Key sources of estimation uncertainty

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.

Estimating value in use

Where an indication of impairment exists, the directors will carry out an impairment review to determine the recoverable amount, being the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.

Recoverability of receivables

The company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience of recoverability and the credit profile of individual or groups of customers.

Determining and reassessing residual values and useful economic lives of tangible assets

The company depreciates tangible assets over their estimated useful lives. In determining appropriate useful lives of assets, the directors have considered historic performance as well as future expectations for factors such as expected usage of the asset, physical wear and tear, technical and commercial obsolescence and legal limitations of the usage of the asset, such as lease terms. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

 

Judgement is applied to determine the residual values for tangible assets. When determining the residual values, the directors have assessed the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. At each reporting date, the directors have also assessed whether there have been any indicators, such as a change in how the asset is used, significant unexpected wear and tear and changes in market prices, which suggest previous estimates may differ from current expectations. Where this is the case, the residual value and/or useful life is amended and accounted for on a prospective basis.

HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Sale of goods
19,648,591
20,144,786
2024
2023
£
£
Turnover analysed by geographical market
Sales - UK
18,908,553
19,564,616
Sales - non-EEC
740,038
580,170
19,648,591
20,144,786
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Auditors' remuneration
17,700
17,655
Depreciation of owned tangible fixed assets
90,651
15,585
Depreciation of tangible fixed assets held under finance leases
326,823
19,369
Profit on disposal of tangible fixed assets
-
(11,000)
Operating lease charges
526,897
327,097
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Number of employees
47
48

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,680,127
2,222,655
Social security costs
178,024
249,813
Pension costs
263,985
246,028
2,122,136
2,718,496
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
306,480
958,260
Company pension contributions to defined contribution schemes
218,667
207,872
525,147
1,166,132

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
128,950
238,400
7
Interest payable and similar expenses
2024
2023
£
£
Interest on finance leases and hire purchase contracts
41,809
19,620
Other interest
7,015
29,706
48,824
49,326
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
214,826
173,894
Adjustments in respect of prior periods
(8,399)
4,075
Total current tax
206,427
177,969
Deferred tax
Origination and reversal of timing differences
(40,404)
69,950
Total tax charge
166,023
247,919
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
8
Taxation
(Continued)
- 19 -

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:

2024
2023
£
£
Profit before taxation
517,721
704,255
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
129,430
176,064
Tax effect of expenses that are not deductible in determining taxable profit
34,436
16,323
Effect of change in corporation tax rate
-
0
(19,035)
Permanent capital allowances in excess of depreciation
10,556
70,492
Under/(over) provided in prior years
(8,399)
4,075
Taxation charge for the year
166,023
247,919
9
Dividends
2024
2023
£
£
Final paid
300,000
-
0
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2024
2,154,788
164,373
108,268
2,427,429
Additions
168,910
52,932
402,052
623,894
Disposals
(5,300)
-
0
-
0
(5,300)
At 31 December 2024
2,318,398
217,305
510,320
3,046,023
Depreciation and impairment
At 1 January 2024
1,244,031
132,463
19,369
1,395,863
Depreciation charged in the year
292,212
26,694
98,568
417,474
Eliminated in respect of disposals
(5,300)
-
0
-
0
(5,300)
At 31 December 2024
1,530,943
159,157
117,937
1,808,037
Carrying amount
At 31 December 2024
787,455
58,148
392,383
1,237,986
At 31 December 2023
910,757
31,910
88,899
1,031,566
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
10
Tangible fixed assets
(Continued)
- 20 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Plant and machinery
40,044
227,493
Motor vehicles
392,383
88,899
432,427
316,392
11
Stocks
2024
2023
£
£
Finished goods and goods for resale
2,510,721
2,553,136

An impairment loss of £387,366 (2023: £648,452) was recognised in cost of sales against stock during the year due to slow-moving and obsolete stock.

12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,417,329
2,741,476
Amounts owed by group undertakings
1,264,280
1,281,130
Other debtors
469,326
476,083
Prepayments and accrued income
160,177
295,905
5,311,112
4,794,594

Amounts owed by group undertakings are interest free, have no fixed date of repayment and are repayable upon demand.

13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
15
248,330
253,621
Trade creditors
1,872,607
1,752,232
Corporation tax
211,257
173,894
Other taxation and social security
440,651
418,972
Other creditors
112,989
221,355
Accruals and deferred income
639,692
529,881
3,525,526
3,349,955
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
13
Creditors: amounts falling due within one year
(Continued)
- 21 -

Amounts owed to group undertakings are interest free, have no fixed date of repayment and are repayable upon demand.

14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
15
476,523
379,321
15
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
248,330
253,621
In two to five years
476,523
379,321
724,853
632,942

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. The average lease term is four years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Finance lease obligations are secured upon the assets to which they relate.

16
Provisions for liabilities
2024
2023
£
£
Dilapidations provision
794,564
394,564
Movements on provisions:
Dilapidations provision
£
At 1 January 2024
394,564
Additional provisions in the year
400,000
At 31 December 2024
794,564
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
17
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
ACAs
191,598
232,002
2024
Movements in the year:
£
Liability at 1 January 2024
232,002
Credit to profit or loss
(40,404)
Liability at 31 December 2024
191,598
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
263,985
246,028

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
300
300
300
300
20
Operating lease commitments
Lessee

Operating lease payments represent rentals payable by the company for certain of its assets. Leases for non-property assets are negotiated for an average term of 4 years.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
-
0
210,000
HARDWOOD SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
21
Related party transactions
Other information

At the year end an amount of £nil (2023: £89,418) was owed to a company owned with common ownership to the ultimate parent company.

 

At the year end an amount of £465,436 (2023: £154,043) was owed by companies with common ownership to the ultimate parent company.

 

The company has taken advantage of the reduced disclosure exemption available under Financial Reporting Standard 102 relating to the disclosure of related party transactions between wholly owned group companies.

 

No other transactions with related parties were undertaken such as are required to be disclosed Financial Reporting Standard 102.

22
Ultimate controlling party

Hardwood Sales Holding Limited is regarded by the directors as being the company's ultimate parent company and ultimate controlling related party. It's registered office, and principal place of business, is Huyton Business Park Ellis Ashton Street, Off Wilson Road, Huyton, Merseyside, United Kingdom, L36 6BN.

 

Hardwood Saes Holding Limited prepares consolidated financial statements that include the results of Hardwood Sales Limited. Copies of the consolidated financial statements can be obtained from the principal place of business.

The company's results are consolidated within the accounts of Hardwood Sales Holding Limited.

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