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Company Registration number: 12249741

Sumac Manufacturing (Holdings) Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 30 September 2024

 

Sumac Manufacturing (Holdings) Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 5

Statement of Directors' Responsibilities

6

Independent Auditor's Report

7 to 10

Consolidated Profit and Loss Account

11

Consolidated Statement of Comprehensive Income

12

Consolidated Balance Sheet

13

Balance Sheet

14

Consolidated Statement of Changes in Equity

15

Statement of Changes in Equity

16

Consolidated Statement of Cash Flows

17

Notes to the Financial Statements

18 to 37

 

Sumac Manufacturing (Holdings) Limited

Company Information

Directors

J A Marsh

J A Stevenson

M A Robson

D Clothier

Registered office


26 Cambridge Road
Granby Industrial Estate
Weymouth
Dorset
DT4 9TJ

Auditors

Albert Goodman LLP Goodwood House
Blackbrook Park Avenue
Taunton
Somerset
TA1 2PX

 

Sumac Manufacturing (Holdings) Limited

Strategic Report for the Year Ended 30 September 2024

The directors present their strategic report for the year ended 30 September 2024.

Principal activity

The principal activity of the group is precision engineers.

Fair review of the business

The year under review has been challenging for the Group, with ongoing development on the nature of work type. Commercial work has continued to see an ongoing reduction, whilst there continues to be a definitive upturn in more demanding areas such as Defence, Aerospace and Scientific. This has been aided by our investment in the fabrication and sheet metal side of our business which has enabled Sumac to give wider services and support in more complex and challenging market sectors. The effects of the Russian invasion of Ukraine have not been so prominent or of particular concern.

The Group continues to invest heavily in capital equipment and personnel, in both developed and emerging markets, and continues to view this as integral to maintain our competitiveness in a challenging market.

The directors are particularly focussed on business development with new and existing customers, but trading and global economic conditions and pressures remain unpredictable and volatile. Relationships in new business sectors are improving, with focus on aligning business strengths to these emerging markets. Investment continues to support growth in these sectors as necessary, in order to support the positive opportunities that have emerged. Increasing staff and general operating costs remain a challenge, and the drive to automate where possible remains a priority. Previous and continued investment in apprentices is now proving to be beneficial.

Although turnover has increased from the previous year by just over 14%, even with the unrelenting pressure on margins and increasing costs, a gross profit of almost 37% was achieved.

The group's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2024

2023

Turnover

£

9,638,990

8,452,563

Gross profit

£

3,578,848

2,691,284

Profit before tax

£

1,133,438

345,875

Future developments

The Group continues to develop existing and new customers and market sectors with a view to longer term contracts, stability and diversification.UK political and economic strategy creates challenges to maintaining competitive pricing in both local and global markets. US political and economic strategy remains a concern although doesn’t appear to have an immediate impact on the business. The directors remain optimistic over business levels for the future, and the market diversity offers some stability whilst new longer term contracts are developed. The directors believe that the Group will continue to strengthen its position in the market and remain financially stable. With ongoing investment a priority, the Group is well placed to capitalize on market opportunities and increasing capability and capacity to suit longer term contracts and supply agreements.

Margins continue to be challenged, and current business is still demonstrating this, though the mix of new industry sectors and work type will hopefully lead to better margins in the future.

 

Sumac Manufacturing (Holdings) Limited

Strategic Report for the Year Ended 30 September 2024

Principal risks and uncertainties

The principal risk to the business continues to be inflation with material and labour, and with no indication of energy prices reducing, remaining competitive is an ongoing challenge. Almost all other costs continuing to increase in ongoing global insecurity. Leadtimes continue to be challenging with many customers seeing short lead times as key to their market success. Skilled labour continues to be problematic, though further investment in training and apprentices, alongside automation remains a high priority to help with offsetting this.

Upward pressure on wages and employment costs caused by UK political strategy, and ongoing business operating costs is an area of concern.

Approved by the Board on 23 June 2025 and signed on its behalf by:


M A Robson
Director

   
 

Sumac Manufacturing (Holdings) Limited

Directors' Report for the Year Ended 30 September 2024

The directors present their report and the consolidated financial statements for the year ended 30 September 2024.

Directors of the group

The directors who held office during the year were as follows:

J A Marsh

J A Stevenson

M A Robson

D Clothier

Financial instruments

Objectives and policies

The Group’s principal financial instruments comprise bank balances, trade debtors, trade creditors, lease purchase finance agreements, directors’ loans and bank loans. The main purpose of these instruments is to maintain funds to finance the Group’s operations.

Price risk, credit risk, liquidity risk and cash flow risk

In respect of bank balances, the liquidity risk is managed through treasury management in respect of cash balances with the use of a deposit account and fixed term deposits as necessary. The risk associated with the bank loans is managed through fixed interest rates with the structured loan finance being used to fund capital purchases.

Trade debtors are managed by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet the amounts due.

Lease purchase finance agreement liquidity risk is managed in the same way as trade creditors above.

In respect of directors’ loans, the directors are aware of the Group’s cash working capital requirements and receive a set monthly repayment. Any repayment over and above this amount would be by agreement when finance was available without compromising the Group’s working capital requirement.

 

Sumac Manufacturing (Holdings) Limited

Directors' Report for the Year Ended 30 September 2024

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

The auditors Albert Goodman LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Future Developments

The future developments of the business are included within the strategic report.

Approved by the Board on 23 June 2025 and signed on its behalf by:


M A Robson
Director

   
 

Sumac Manufacturing (Holdings) Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Sumac Manufacturing (Holdings) Limited

Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited

Opinion

We have audited the financial statements of Sumac Manufacturing (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the group's and the parent company's affairs as at 30 September 2024 and of the groups profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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 responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 director's 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 original financial statements were 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.

 

Sumac Manufacturing (Holdings) Limited

Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

In the light of our knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

Matters on which we are required to report by exception

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

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 6, 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 group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

 

Sumac Manufacturing (Holdings) Limited

Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited

Auditor 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 the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the manufacturing sector;

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment and health and safety legislation;

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships;

tested journal entries to identify unusual transactions;

assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

investigated the rationale behind significant or unusual transactions.

 

Sumac Manufacturing (Holdings) Limited

Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation;

enquiring of management as to actual and potential litigation and claims; and

reviewing correspondence with HMRC, relevant regulators and the group’s legal advisors.

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 for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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.





Joseph Doggrell FCA BSc (Hons) (Senior Statutory Auditor)
For and on behalf of Albert Goodman LLP, Statutory Auditor

Goodwood House
Blackbrook Park Avenue
Taunton
Somerset
TA1 2PX

23 June 2025

 

Sumac Manufacturing (Holdings) Limited

Consolidated Profit and Loss Account
for the Year Ended 30 September 2024

Note

2024
 £

2023
 £

Turnover

3

9,638,990

8,452,563

Cost of sales

 

(6,060,142)

(5,761,279)

Gross profit

 

3,578,848

2,691,284

Administrative expenses

 

(2,429,733)

(2,307,724)

Other operating income

4

-

4,500

Operating profit

5

1,149,115

388,060

Other interest receivable and similar income

6

21,826

7,941

Interest payable and similar charges

7

(37,503)

(50,127)

Profit before tax

 

1,133,438

345,874

Taxation

11

(117,928)

202,262

Profit for the financial year

 

1,015,510

548,136

Profit/(loss) attributable to:

 

Owners of the company

 

1,015,510

548,136

 

Sumac Manufacturing (Holdings) Limited

Consolidated Statement of Comprehensive Income
for the Year Ended 30 September 2024

2024
£

2023
£

Profit for the year

1,015,510

548,136

Total comprehensive income for the year

1,015,510

548,136

Total comprehensive income attributable to:

Owners of the company

1,015,510

548,136

 

Sumac Manufacturing (Holdings) Limited

(Registration number: 12249741)
Consolidated Balance Sheet as at 30 September 2024

Note

2024
£

2023
£

Fixed assets

 

Intangible assets

12

2

2

Tangible assets

13

2,725,417

2,713,770

 

2,725,419

2,713,772

Current assets

 

Stocks

15

1,750,735

2,026,111

Debtors

16

1,491,355

1,945,051

Cash at bank and in hand

 

2,990,330

1,626,366

 

6,232,420

5,597,528

Creditors: Amounts falling due within one year

18

(1,605,315)

(1,625,306)

Net current assets

 

4,627,105

3,972,222

Total assets less current liabilities

 

7,352,524

6,685,994

Creditors: Amounts falling due after more than one year

18

(501,620)

(574,849)

Provisions for liabilities

19

(335,930)

(311,681)

Net assets

 

6,514,974

5,799,464

Capital and reserves

 

Called up share capital

21

10,779

10,779

Share premium reserve

198,731

198,731

Capital redemption reserve

100

100

Retained earnings

6,305,364

5,589,854

Equity attributable to owners of the company

 

6,514,974

5,799,464

Shareholders' funds

 

6,514,974

5,799,464

Approved and authorised by the Board on 23 June 2025 and signed on its behalf by:
 


M A Robson
Director


D Clothier
Director

 
 

Sumac Manufacturing (Holdings) Limited

(Registration number: 12249741)
Balance Sheet as at 30 September 2024

Note

2024
 £

2023
 £

Fixed assets

 

Tangible assets

13

1,187,965

1,214,030

Investments

14

10,516

10,516

 

1,198,481

1,224,546

Current assets

 

Debtors

16

500,263

500,263

Cash at bank and in hand

 

228,920

199,101

 

729,183

699,364

Creditors: Amounts falling due within one year

18

(22,610)

(23,643)

Net current assets

 

706,573

675,721

Net assets

 

1,905,054

1,900,267

Capital and reserves

 

Called up share capital

10,779

10,779

Profit and loss reserve

1,894,275

1,889,488

Total equity

 

1,905,054

1,900,267

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes as it prepares group accounts. The company made a profit after tax for the financial year of £304,787.

Approved and authorised by the Board on 23 June 2025 and signed on its behalf by:
 


M A Robson
Director


D Clothier
Director

 
 

Sumac Manufacturing (Holdings) Limited

Consolidated Statement of Changes in Equity
for the Year Ended 30 September 2024

Ordinary share capital
£

Share premium
£

Capital redemption reserve
£

Profit and loss reserve
£

Total
£

At 1 October 2023

10,779

198,731

100

5,589,854

5,799,464

Profit for the year

-

-

-

1,015,510

1,015,510

Dividends

-

-

-

(300,000)

(300,000)

At 30 September 2024

10,779

198,731

100

6,305,364

6,514,974

Ordinary share capital
£

Share premium
£

Capital redemption reserve
£

Profit and loss reserve
£

Total
£

At 1 October 2022

10,516

198,731

100

5,341,718

5,551,065

Profit for the year

-

-

-

548,136

548,136

Dividends

-

-

-

(300,000)

(300,000)

New share capital subscribed

263

-

-

-

263

At 30 September 2023

10,779

198,731

100

5,589,854

5,799,464

 

Sumac Manufacturing (Holdings) Limited

Statement of Changes in Equity
for the Year Ended 30 September 2024

Share capital
£

Retained earnings
£

Total
£

At 1 October 2023

10,779

1,889,488

1,900,267

Profit for the year

-

304,787

304,787

Dividends

-

(300,000)

(300,000)

At 30 September 2024

10,779

1,894,275

1,905,054


 

Share capital
£

Retained earnings
£

Total
£

At 1 October 2022

10,516

1,388,381

1,398,897

Profit for the year

-

801,107

801,107

Dividends

-

(300,000)

(300,000)

New share capital subscribed

263

-

263

At 30 September 2023

10,779

1,889,488

1,900,267

 

Sumac Manufacturing (Holdings) Limited

Consolidated Statement of Cash Flows
for the Year Ended 30 September 2024

Note

2024
£

2023
£

Cash flows from operating activities

Profit for the year

 

1,015,510

548,136

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

467,629

486,365

Loss/(profit) on disposal of tangible assets

19,396

(24,471)

Finance income

(21,826)

(7,941)

Finance costs

37,503

50,127

Income tax expense

11

117,928

(202,262)

 

1,636,140

849,954

Working capital adjustments

 

Decrease/(increase) in stocks

15

275,376

(97,271)

Decrease/(increase) in trade debtors

16

453,696

(130,134)

Decrease in trade creditors

18

(131,710)

(45,523)

Cash generated from operations

 

2,233,502

577,026

Income taxes received

11

-

319,437

Net cash flow from operating activities

 

2,233,502

896,463

Cash flows from investing activities

 

Interest received

21,826

7,941

Acquisitions of tangible assets

(521,005)

(258,609)

Proceeds from sale of tangible assets

 

22,333

25,750

Net cash flows from investing activities

 

(476,846)

(224,918)

Cash flows from financing activities

 

Interest paid

(37,503)

(50,127)

Repayment of bank borrowing

 

(39,712)

(82,039)

Proceeds from other borrowing draw downs

 

40,058

14,453

Repayment of other borrowing

 

(17,426)

-

Payments to finance lease creditors

 

(38,109)

(177,153)

Dividends paid

(300,000)

(300,000)

Net cash flows from financing activities

 

(392,692)

(594,866)

Net increase in cash and cash equivalents

 

1,363,964

76,679

Cash and cash equivalents at 1 October

 

1,626,366

1,549,687

Cash and cash equivalents at 30 September

 

2,990,330

1,626,366

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
26 Cambridge Road
Granby Industrial Estate
Weymouth
Dorset
DT4 9TJ

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

These financial statements are presented in Sterling (£).

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 September 2024.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Judgements and key sources of estimation uncertainty

As described in the strategic report the Directors have made the assessment that the Group is a going concern and these financial statements are prepared on that basis. This assessment took into account the continuing impact of the cost of living crisis. The impact of both of these external events has been considered when considering turnover and supply, the working capital facilities in place and the ability to access funding if required.

Key sources of estimation uncertainty

Provision for doubtful debts
In determining the requirement to provide for debtor balances, the group considers the age of debtor, trading status and payment terms. Each year the group reviews the above to establish if there is a requirement to provide for any debtor balances.

Net Realisable Value of Stock
Raw materials
In determining the net realisable value of raw materials, the group considers age, length of ownership, current market trends and advancements and general industry performance. Each year the group reviews the above to establish if there is any change in the expected net realisable value. At 30 September 2024 the net realisable value of raw materials was £215,229 (2023: £237,404).

Work in progress
In determining the net realisable value of raw materials, the group considers age, length of ownership, current market trends and advancements, general industry performance and correspondence with the customer. Each year the group reviews the above to establish if there is any change in the expected net realisable value. At 30 September 2024 the net realisable value of work in progress was £1,108,461 (2023: £1,379,922)

Finished goods
In determining the net realisable value of finished goods, the group considers age, length of ownership, current market trends and advancements and general industry performance. Each year the group reviews the above to establish if there is any change in the expected net realisable value of stock items. At 30 September 2024 the net realisable value of finished goods was £427,045 (2023: £418,568).

Turnover recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group. Turnover is recognised on dispatch of goods.

Government grants

Government grants are recognised under the accruals model resulting in income being recognised on a systematic basis over the period in which the related costs are incurred for which the grant is compensating. The income from the scheme is recognised as other operating income in the profit and loss and timing differences presented as other debtors within the balance sheet.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Exchange differences are taken into account in arriving at operating profit. Exchange differences are recognised in the profit and loss in the period in which they arise.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised on timing differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Deferred tax liabilities are presented within provisions for liabilities on the balance sheet.

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Separately acquired trademarks and licences are shown at historical cost.

Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Trademarks, patents, licences

10% straight line basis

Tangible assets

Tangible assets are stated at cost, less accumulated depreciation and accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold land

Not depreciated

Freehold buildings

50 years straight line

Plant and machinery

25% reducing balance

Furniture, fittings and equipment

20% - 33% reducing balance

Motor vehicles

25% reducing balance

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Stocks

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

At each report date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit and loss

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Assets held under hire purchase agreements are capitalised as tangible fixed assets with the future obligation being recognised as a liability. Finance costs are recognised in the Profit and Loss Account calculated at a constant periodic rate of interest over the term of the liability.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payments obligations.

The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.

Reserves

Called up share capital represents the nominal value of shares that have been issued.

Share premium account includes any premiums received on the issue of share capital. Transaction costs associated with the issuing of shares are deducted from the share premium.

Profit and loss account includes all current and prior period profits and losses.

Capital redemption reserve records the nominal value of shares repurchased by the company.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

3

Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

2024
£

2023
£

Sale of goods

9,638,990

8,452,563

The analysis of the group's Turnover for the year by market is as follows:

2024
£

2023
£

UK

9,216,678

7,829,599

Europe

398,800

486,104

Rest of world

23,512

136,860

9,638,990

8,452,563

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2024
£

2023
£

Miscellaneous other operating income

-

4,500


 

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

5

Operating profit

Arrived at after charging/(crediting)

2024
£

2023
£

Depreciation expense

467,631

486,365

Foreign exchange losses

1,881

903

Operating lease expense - plant and machinery

37,007

26,112

Loss/(profit) on disposal of property, plant and equipment

19,396

(24,471)

6

Other interest receivable and similar income

2024
£

2023
£

Interest income on bank deposits

21,826

7,941

7

Interest payable and similar expenses

2024
£

2023
£

Interest on bank overdrafts and borrowings

1,014

7,588

Interest on obligations under finance leases and hire purchase contracts

32,341

34,545

Interest expense on other finance liabilities

4,148

7,994

37,503

50,127

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
£

2023
£

Wages and salaries

3,592,358

3,449,221

Social security costs

344,253

322,537

Pension costs, defined contribution scheme

79,141

77,038

Other employee expense

16,451

7,792

4,032,203

3,856,588

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2024
 No.

2023
 No.

Production

88

88

Administration and support

20

18

Other departments

4

4

112

110

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2024
£

2023
£

Remuneration

209,981

233,821

Contributions paid to money purchase schemes

4,302

4,302

214,283

238,123

During the year the number of directors who were receiving benefits and share incentives was as follows:

2024
No.

2023
No.

Accruing benefits under money purchase pension scheme

3

3

In respect of the highest paid director:

2024
£

2023
£

Remuneration

64,034

89,735

Company contributions to money purchase pension schemes

1,687

1,687

10

Auditors' remuneration

2024
£

2023
£

Audit of these financial statements

3,150

3,000

Audit of the financial statements of subsidiaries of the company pursuant to legislation

21,500

21,200

24,650

24,200

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024


 

11

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2024
£

2023
£

Current taxation

UK corporation tax

168,384

70,208

UK corporation tax adjustment to prior periods

(74,705)

(319,437)

93,679

(249,229)

Deferred taxation

Arising from origination and reversal of timing differences

24,249

11,108

Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods

-

35,859

Total deferred taxation

24,249

46,967

Tax expense/(receipt) in the income statement

117,928

(202,262)

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of 25% (2023 - 22%).

The differences are reconciled below:

2024
£

2023
£

Profit before tax

1,133,438

345,874

Corporation tax at standard rate

283,360

76,092

Tax (decrease)/increase from effect of capital allowances and depreciation

(18,300)

32,600

Increase from effect of different UK tax rates on some earnings

335

-

Tax increase/(decrease) from other short-term timing differences

2,724

(360)

Effect of expense not deductible in determining taxable profit (tax loss)

674

41

Effect of tax losses

(6,022)

(38,165)

Deferred tax expense from unrecognised temporary difference from a prior period

24,249

46,967

Tax decrease from effect of adjustment in research and development tax credit

(169,092)

(319,437)

Total tax charge/(credit)

117,928

(202,262)

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

12

Intangible assets

Group

Goodwill
 £

Other intangible assets
 £

Total
£

Cost or valuation

At 1 October 2023

250,001

-

250,001

Additions acquired separately

-

1

1

At 30 September 2024

250,001

1

250,002

Amortisation

At 1 October 2023

250,000

-

250,000

At 30 September 2024

250,000

-

250,000

Carrying amount

At 30 September 2024

1

1

2

At 30 September 2023

1

1

2

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

13

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Plant and machinery
 £

Total
£

Cost or valuation

At 1 October 2023

1,303,257

502,350

175,923

5,030,915

7,012,445

Additions

-

64,875

68,225

387,905

521,005

Disposals

-

(16,768)

(56,095)

(346,111)

(418,974)

At 30 September 2024

1,303,257

550,457

188,053

5,072,709

7,114,476

Depreciation

At 1 October 2023

89,227

434,204

96,751

3,678,493

4,298,675

Charge for the year

26,065

25,510

24,249

391,805

467,629

Eliminated on disposal

-

(16,748)

(46,694)

(313,803)

(377,245)

At 30 September 2024

115,292

442,966

74,306

3,756,495

4,389,059

Carrying amount

At 30 September 2024

1,187,965

107,491

113,747

1,316,214

2,725,417

At 30 September 2023

1,214,030

68,146

79,172

1,352,422

2,713,770

Included within the net book value of land and buildings above is £1,187,965 (2023 - £1,214,030) in respect of freehold land and buildings.
 

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

2024
£

2023
£

Plant and machinery

691,338

664,725

   

Restriction on title and pledged as security

Freehold land and buildings with a carrying amount of £1,187,965 (2023 - £1,214,030) has been pledged as security for the bank borrowings.
 

Company

Land and buildings
£

Total
£

Cost or valuation

At 1 October 2023

1,303,257

1,303,257

At 30 September 2024

1,303,257

1,303,257

Depreciation

At 1 October 2023

89,227

89,227

Charge for the year

26,065

26,065

At 30 September 2024

115,292

115,292

Carrying amount

At 30 September 2024

1,187,965

1,187,965

At 30 September 2023

1,214,030

1,214,030

Included within the net book value of land and buildings above is £1,187,965 (2023 - £1,214,030) in respect of freehold land and buildings.
 

Restriction on title and pledged as security

Freehold land and buildings with a carrying amount of £1,187,965 (2023 - £1,214,030) has the following restriction on title:
.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

14

Investments

Company

2024
£

2023
£

Investments in subsidiaries

10,516

10,516

Subsidiaries

£

Cost or valuation

At 1 October 2023

10,516

Carrying amount

At 30 September 2024

10,516

At 30 September 2023

10,516

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2024

2023

Subsidiary undertakings

Sumac Precision Engineering Limited

26 Cambridge Road, Granby Industrial Estate, Weymouth, Dorset, DT4 9TJ

Ordinary

100%

100%

 

England & Wales

     

Subsidiary undertakings

Sumac Precision Engineering Limited

The principal activity of Sumac Precision Engineering Limited is precision engineering.

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

15

Stocks

 

Group

Company

2024
£

2023
£

2024
£

2023
£

Raw materials and consumables

215,229

244,158

-

-

Work in progress

1,108,461

1,373,187

-

-

Finished goods and goods for resale

427,045

408,766

-

-

1,750,735

2,026,111

-

-

16

Debtors

   

Group

Company

Current

Note

2024
£

2023
£

2024
£

2023
£

Trade debtors

 

1,391,921

1,632,828

-

-

Amounts owed by related parties

26

-

-

500,000

500,000

Other debtors

 

-

3,965

-

-

Called up share capital not paid

 

263

263

263

263

Prepayments

 

99,171

74,784

-

-

Accrued income

 

-

233,211

-

-

   

1,491,355

1,945,051

500,263

500,263

17

Cash and cash equivalents

 

Group

Company

2024
£

2023
£

2024
£

2023
£

Cash on hand

-

4,781

-

-

Cash at bank

2,983,038

1,614,383

228,920

199,101

Short-term deposits

7,292

7,202

-

-

2,990,330

1,626,366

228,920

199,101

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

18

Creditors

   

Group

Company

Note

2024
 £

2023
 £

2024
 £

2023
 £

Due within one year

 

Loans and borrowings

22

315,293

304,424

-

-

Trade creditors

 

289,619

466,863

-

2,220

Social security and other taxes

 

435,325

341,678

1,000

630

Outstanding defined contribution pension costs

 

17,219

18,666

-

-

Other creditors

 

113,235

216,934

9,000

9,000

Accrued expenses

 

263,566

206,533

5,001

5,000

Corporation tax

11

171,058

70,208

7,609

6,793

 

1,605,315

1,625,306

22,610

23,643

Due after one year

 

Loans and borrowings

22

501,620

574,849

-

-

19

Provisions for liabilities

Group

Deferred tax
£

Total
£

At 1 October 2023

311,681

311,681

Additional provisions

24,249

24,249

At 30 September 2024

335,930

335,930

Deferred tax

Group

Deferred tax assets and liabilities

2024

Asset
£

Liability
£

Capital allowances in excess of depreciation

-

335,568

Short term timing differences

-

362

-

335,930

2023

Asset
£

Liability
£

Capital allowances in excess of depreciation

-

316,348

Short term timing differences

4,667

-

4,667

316,348

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

20

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £79,141 (2023 - £77,038).

Contributions totalling £17,219 (2023 - £18,666) were payable to the scheme at the end of the year and are included in creditors.

21

Share capital

Allotted, called up and fully paid shares

 

2024

2023

 

No.

£

No.

£

Ordinary shares of £1 each

10,779

10,779

10,779

10,779

         

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
The ordinary shares have full voting rights and rights to dividends at the discretion to the directors.

22

Loans and borrowings

Current loans and borrowings

 

Group

Company

2024
£

2023
£

2024
£

2023
£

Bank borrowings

24,174

38,306

-

-

Hire purchase contracts

227,151

184,724

-

-

Other borrowings

63,968

81,394

-

-

315,293

304,424

-

-

Non-current loans and borrowings

 

Group

Company

2024
£

2023
£

2024
£

2023
£

Bank borrowings

37,335

62,915

-

-

Hire purchase contracts

464,285

511,934

-

-

501,620

574,849

-

-

 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

Bank borrowings

Bank loan 1 is denominated in GBP with a nominal interest rate of 4.43%, and the final instalment was due on 19 December 2023. The carrying amount at year end is £Nil (2023 - £15,384).

The loan is secured with first legal charges over the freehold property 1 and 2 Albany Court and land lying to the north of Albany Road, Weymouth. There is also an unlimited debenture from Sumac Precision Engineering Limited.

Bank loan 2 is denominated in GBP with a nominal interest rate of 2.9%, and the final instalment is due on 2 February 2027. The carrying amount at year end is £61,509 (2023 - £85,837).

The loan is secured with first legal charges over the freehold property 1 and 2 Albany Court and 28 Cambridge Road, Weymouth, and an unlimited debenture from Sumac Precision Engineering Limited.

Other borrowings

Hire purchase contracts are denominated in GBP with a nominal interest rate of 3-6%. The carrying amount at the year end is £691,436 (2023 - £696,658). The liabilities are secured on the plant and machinery assets to which the obligations relate.

23

Obligations under leases and hire purchase contracts

Group

Operating leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Not later than one year

31,110

11,952

Later than one year and not later than five years

35,713

18,221

66,823

30,173

The amount of non-cancellable operating lease payments recognised as an expense during the year was £29,460 (2023 - £14,457).

24

Dividends

Interim dividends paid

   

2024
£

 

2023
£

Interim dividends paid during the year

 

300,000

 

300,000

         
 

Sumac Manufacturing (Holdings) Limited

Notes to the Financial Statements
for the Year Ended 30 September 2024

25

Analysis of changes in net debt

Group

At 1 October 2023
£

Financing cash flows
£

At 30 September 2024
£

Cash and cash equivalents

Cash

1,626,336

1,363,964

2,990,300

Borrowings

Long term borrowings

(62,915)

25,580

(37,335)

Short term borrowings

(38,306)

14,132

(24,174)

Lease liabilities

(696,658)

5,222

(691,436)

(797,879)

44,934

(752,945)

 

828,457

1,408,898

2,237,355

26

Related party transactions

Group

Transactions with directors

Summary of transactions with subsidiaries

The group has taken advantage of the exemption in FRS 102 paragraph 33.1A from disclosing transactions and balances with wholly owned subsidiaries.

Summary of transactions with other related parties

Total rent of £84,000 (2023 - £84,000) was paid during the year to 3 shareholders who jointly own the premises from which the Group trades from.

The group maintains loan accounts with its shareholders which pays interest at a rate of 5%. At the year end £161,447 (2023: £288,015) was due to the shareholders and interest payable to them of £3,244 (2023: £6,799).

Company

Summary of transactions with subsidiaries

The group has taken advantage of the exemption in FRS 102 paragraph 33.1A from disclosing transactions and balances with wholly owned subsidiaries.