The directors present the strategic report for the year ended 31 December 2024.
The profit for the financial year after taxation amounted to £3,473,123 (2023: £2,672,643).
We have achieved another exceptional year of trading and have once again surpassed the budget which was put into place for 2024 in both turnover and net profit. This is despite some very challenging conditions and competition in the marketplace.
A budget has once again been set for 2025 which shows further growth in margin. The group continues to be selective in the type and nature of work that it takes onboard. The group has been offered some projects which represent too much commercial risk and as such, after careful analysis, have been rejected. The strategy now is to increase turnover and associated margin in markets that represent low commercial risk for Blue Chip Clients.
The group is now well positioned to attract the type and nature of work that will deliver greater profitability.
The group continues to operate certified Quality, Environmental and Occupational Health and Safety Management Systems to ISO9001, ISO14001 and ISO45001.
The group also has the following accreditations:
Acclaim SSIP
Achilles UDVB
Achilles Building Confidence
Alcumus SafeContractor SSIP
Builders Profile
Constructionline Gold
CHAS
CIRAS
ECIA
EIC
RISQS
ROSPA
SMAS
SEDEX
Sentinel
Sustainability School
Worksafe
Yellow Jacket
We are longstanding members and supporters of the National Access & Scaffolding Confederation (NASC), who are the recognised industry body for quality, safety and technical standards by the Health and Safety Executive. All of our activities are audited and certified by the NASC, again creating a very strong marketing tool.
The group has successfully retained the Fleet Operators Recognition (FORS) certification for the seventh year running and is currently at Silver Status. The scheme recognises those that excel in health, safety and environmental management in its transport operations.
2024 also saw the complete renewal of the Transport Fleet at the group, which equated to over 60 vehicles. Included in the renewal were all of the HGV classification (26 Tonne), Light goods vehicles (7.5 Tonne), pickups, vans and crew cabs.
The group has also continued with its Capital Expenditure investment in scaffolding stock in both traditional tube and fittings and system scaffolding (Layher).
We have secured further works at Hinkley Point C Nuclear Power Station and are well placed to secure further opportunities.
The Board of Directors again wish to thank all our employees for their continued loyal support and hard work. Their effort and teamwork are so important in helping us to achieve our objectives. The Board continue to do everything in its power to ensure the health, safety and welfare of its employees is maintained at the highest level. We have an excellent record of providing long term employment.
The group has repair and maintenance contracts at both Heathrow and Gatwick airports and we had reported last year that there had been a gradual return to business levels experienced in previous years. Both airports have featured heavily in the media in the last 12 months and the group is now well placed to capitalise on the further developments of the infrastructure at both of those locations both airside and landside.
The group is exposed to a variety of financial risks which the Board manages with the objective of minimising any potential adverse effect on the group's performance. The Construction sector is exposed to changes in the economic climate, the UK Government's policies and employment laws as well as changing market practices and behaviours following a handful of high-profile company collapses.
The Board will therefore continue to mitigate these risks in a number of ways, notably by continuing to foster long-term relationships with our key clients, maintaining flexibility in our cost base, ensuring that we are not overly reliant on any one part of our supply chain.
Financial key performance indicators
Palmers is managed via our branch structure, with each branch having monthly targets to achieve across a range of financial and non-financial KPIs. The basis of these KPIs are agreed as part of our annual budget and business plan process and cover financial, commercial, operational and safety targets against which performance is monitored monthly.
The group has implemented a new Financial Accounting software package (Sun Systems) which allows much more accurate and timely reporting to be operated and reviewed at predetermined intervals to improve business performance. The group has now introduced a new, more streamlined payroll system to compliment Sun Systems (Mitrefinch) and this is now successfully up and running.
The group will continue to focus on its core clients operating in the infrastructure, construction and industrial related sectors, but as mentioned earlier, will be more selective in the type and nature of contracts that it accepts going forward. Our objective remains to operate safely, provide exceptional delivery to our customers and maintain strong relationships with our suppliers. There is now more of a focus on the Commercial Performance of the existing contracts already in place and the new business that the Company continues to secure.
The Directors, while in continual review, feel confident that there is sufficient flexibility in the cost base and variety in contracted work to effectively manage any downturn in trading and ensure that the company has sufficient resources to meet its financial obligations.
We have maintained cash flows and have ensured that all of the group’s liabilities with regard to PAYE and VAT have been met and are up to date. The group has further reduced its CBILS facility in 2024. The original CBILS facility was £3.5M has been reduced to £272K at the balance sheet date. The group has now managed to secure preferential repayment terms for the balance. The group has now also repaid the “cash backing” of the CBILS facility of £500K to the owner.
The business has operational and financial reporting procedures, supported by appropriate key performance indicators, to manage the business and any risks that may exist. The principal key performance indicators used by management to monitor performance are as follows:
1. Safety Performance
2. Revenue
3. EBIT (Earnings before Interest and Tax)
4. Debtor Days / Cash Collection
We measure safety performance over a number of leading and lagging indicators. Our lost time accident frequency rate, per 100,000 man hours, was 0.00 (2023 – 0.21) There were no lost time accidents in the full year 2024 which is a significant achievement. Our accident statistics are well below the National averages.
Revenues have increased by 38.4% in comparison to the prior year.
EBITDA has increased from £2,559k to £3,693k and EBIT has increased from £2,234k to £3,272k.
Average debtor days for the year are 85 days compared with customer credit terms of 60 days.
Going concern
The Directors have assessed that the actions and strategies available to them mitigate business threats, the forecasts demonstrated that the group could operate within its available funding arrangements. Therefore, as there is a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future, the Directors have concluded this does not represent a material uncertainty with regards to going concern.
Thus, the financial statements have been prepared on a going concern basis which presumes the realisation of assets and liabilities in the normal course of business. Under this scenario the group still has significant cash headroom which will allow for further external factors to impact upon it and still enable it to discharge its liabilities as they become due. A reverse stress test is not considered appropriate given the headroom in place. There is of course a credit risk associated with the group’s debtor book but the Board has identified this issue as utmost priority and has put steps in place to collect it.
Based on the above, the Directors are confident that the actions and strategies in place, results in the group being able to mitigate business threats as they arise.
Contractual relations
The group agrees payment terms with its suppliers when it enters into binding purchase contracts. The group seeks to abide by the payment terms agreed with suppliers whenever it is satisfied that the supplier has provided the goods or service in accordance with the agreed terms and conditions.
The group does not have a standard or code which deals specifically with the payment of suppliers. The number of days billing from suppliers outstanding at the year-end was approximately 50 days (2023: 50 days).
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £200,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Liquidity risk is the risk that the group will not be able to support its own working capital requirement and that the group will encounter difficulty in meeting its financial obligations as they fall due.
The Board receives rolling 12-month cash flow projections on a weekly basis as well as information regarding cash balances. At the end of the financial year, these projections indicated that the group will have sufficient liquid resources to meet all reasonably expected obligations as they fall due.
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The group is mainly exposed to credit risk from credit sales. It is group policy to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices. Each new customer is analysed individually for creditworthiness before the group’s standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval.
A monthly review of the trade receivables' ageing analysis is undertaken and customers' credit is reassessed periodically.
Information concerning employees and their remuneration is set out in notes 6 and 7 to the financial statements.
It is the policy of the group to communicate with employees on matters of mutual interest, including health and safety, and to keep them informed about group affairs. Information is provided by various means.
It is also the group’s policy to encourage the employment, training and career development of disabled persons. If employees become disabled, every effort is made for them to continue in employment or receive appropriate training. In order to safeguard its employees, the group pursues a policy which seeks to achieve, as far as practicably possible, secure working environments, and has achieved accreditation to ISO 9001 for all operating divisions. The group undertook 327 training days of our employees this year to both maintain and further enhance the skill set of employees to meet the demands of the business.
JS. Audit Limited were appointed as auditor to the group 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.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Innovative Scaffold Services Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group 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.
Irregularities and 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.
Based on our understanding of the company and sector, we identified that the principal risks of non-compliance with laws and regulations related to, but were not limited to, the Companies Act 2006, UK tax, employment, pension and health and safety legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgements and the risk of fraud in revenue recognition.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management about actual and potential litigation and claims, their policies and procedures to prevent and detect fraud as well as whether they have knowledge of any actual, suspected or alleged fraud;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
obtaining an understanding of provisions and holding discussions with management to understand the basis of recognition or non-recognition of tax provisions;
in addressing the risk of fraud through management override of controls: testing the appropriateness of journal entries; assessing whether the accounting estimates, judgements and decisions made by management are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the 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 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £48 (2023 - £32,046 profit).
Innovative Scaffold Services Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is International House, Flint Road, Saltney Ferry, Chester, CH4 0GZ.
The group consists of Innovative Scaffold Services Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Innovative Scaffold Services Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
As referred to in the Strategic Report, management and the directors have previously been able to obtain funding support for the longer-term under CBILS and through generating profits during the current year, have been able to pay down a significant amount of this loan as well as shareholder loan repayment both of which continue post year end. The directors have reviewed group forecasts prepared by management and are confident that the group will be able to continue to meet its liabilities as they fall due. On this basis the
directors have prepared the financial statements on a going concern basis.
Turnover is recognised at the fair value of the consideration received or receivable for the provision of scaffolding 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 has been recognised when services have been delivered to customers such that risks and rewards of ownership have transferred to them. Contract costing is applied and sales arise from the rental of scaffolding and related services.
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 assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's 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.
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 and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
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.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying 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.
In preparing these financial statements, the directors have made the following judgements:
Amounts recoverable on contracts have been reviewed on a contract by contract basis. The contracts have been assessed using estimated selling prices and costs to complete the projects.
Trade debtors are reviewed for recoverability with provisions being made for bad or doubtful debts based upon market conditions, historical data and up to date credit rating data.
The estimated useful life of tangible fixed assets have been reviewed by the directors, based on past experience, to arrive at the appropriate depreciation rates disclosed in note 1.6.
A deferred tax asset has been recognised on the basis that the directors believe it is probable that it will be recovered within the next 12 months. This assessment is based on management's expectations and review of forecasted trading results for a 12 month period.
The potential charge in respect of the share based payment has been determined on the basis of management's assessment of the likely exercise date of the share options, taking into account the terms and conditions of the related share scheme.
Turnover arises from services supplied in the United Kingdom. All turnover and profits are derived from the supply of industrial services which, in the opinion of the directors, represents one class of turnover.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit 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 group has a potential deferred tax asset of £4,220,530 (2023: £5,295,668) in respect of unrelieved tax losses. No part of this has been recognised as there is insufficient certainty as to the future recoverability of the asset.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts:
Details of the company's subsidiaries at 31 December 2024 are as follows:
The impairment loss recognised in the Statement of Comprehensive Income for the year in respect of bad and doubtful trade debts was £156,021 (2023: £54,945).
See note 24 to the financial statements, Financial commitments, guarantees and contingent liabilities in respect of security against loans
The Coronavirus Business Interruption Loan Scheme loan incurs interest at a rate of 3% pa over base rate. The interest is paid separately to the capital on a quarterly basis. The other bank loan incurs interest at a fixed rate of 6.09% and is being paid monthly. Capital is being repaid monthly on both loans.
Loans from relate parties were repaid in full during the year and interest of £1,973 was charged.
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 18 months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The liabilities are secured against the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The company has no deferred tax assets or liabilities.
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. Contributions amounting to £65,150 (2023 : £201,706) were payable to the scheme at the year-end and are included in creditors.
During the year 1,358 equity-settled share options were granted by the company and were all outstanding as at 31 December 2024. The options have a weighted average exercise price of £184, exercisable on an exit event only and have a remaining contractual life of 9 years and 4 months.
The estimated fair value of each share option, £619, was calculated by applying the Black-Scholes pricing model with inputs of: volatility of 25%; interest rate of 4.5%; and dividend yield rate of nil. The total expense recognised in the group's financial statements for the year ended 31 December 2024 was nil.
Group share-based payments
The company participates in a group share based payment plan and recognises and measures its share based expense on the basis of a reasonable allocation of the expense recognised for the group. The allocation is based on the number of employees benefiting from the share based payment plan employed by each group entity.
On 26 March 2024 the company's 1 ordinary £1 share was sub-divided into 10,000 ordinary £0.0001 shares.
On 2 July 2024 993 growth £0.0001 shares were issued at par. These shares have no rights to vote, to receive dividends or receive a return of capital on proceeds below £10,359,917.
The profit and loss account represents cumulative profits less distributions to shareholders.
Mr C C Butt, a director, holds a fixed and floating charge over the group's property and assets dated 16 January 2017.
The group's bankers, National Westminster Bank plc hold a fixed and floating charges over the group's property and assets dated 1 May 2020 and 26 March 2021.
The other bank loan advanced by IFW Debt LP is secured by a debenture dated 22 December 2023 and a personal guarantee from Mr CC Butt, a director.
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:
The group and company has taken advantage of the exemption under FRS102 not to disclose transactions or balances with other group companies.
The group has the following balances and transactions with companies related by common directors:
Balances due from related companies totalled £402,317, as at 31 December 2024 (2023: £14,200).
Balances due to related parties totalled £124,540 as at 31 December 2024 (2023: £465,510).
The group loaned an amount of £38,884 to one of the directors during the year. This amount was outstanding at the balance sheet date and no interest has been charged.
As disclosed in note 24, Mr C C Butt, a director, has provided a personal guarantee in respect of one of the group's loans.