| Wefco (Gainsborough) Limited |
| Strategic Report |
|
| The directors present their strategic report for Wefco (Gainsborough) Limited for the year ended 30 September 2024. |
|
| Business review and results |
|
The results for the year and the financial position of the company are shown in these financial statements. |
The company has delivered another year of strong trading and continued profitability, reinforcing its position as a trusted engineering partner across a multitude of industry and energy sectors. |
| Stability was demonstrated in revenue, driven by ongoing demand across our core markets, successful customer retention, and strategic inroads into adjacent sectors. |
| Wefco (Gainsborough) Limited delivered strong underlying profitability during the year. The reduction in profit to prior year is attributable to targeted internal initiatives and does not reflect a decline in core business performance. |
| The operational benefits realised from the full integration of the Cookson and Zinn business, and optimisation of the Blyton Grange site, have contributed significantly to enhanced efficiency, responsiveness, customer service, and industry reputation. |
| Despite ongoing economic pressures, including inflationary costs and geopolitical volatility, Wefco has maintained strong margins. |
| Key highlights for the year: |
| ● |
New contract wins in growth markets aligned with our clean energy strategy. |
| ● |
Continued investment in infrastructure, digital systems, and workforce development. |
| ● |
Higher customer satisfaction and strong retention. |
The company remains guided by its core values of safety, quality, teamwork, continuous improvement, community, sustainability, innovation, and intergrity. |
|
| Principal risks and uncertainties |
|
| The company considers its exposure to risks on an ongoing basis and implements policies and procedures to mitigate these risks. The key risks are summarised below: |
|
| Liquidity and cashflow risk |
|
| The company manages financial risk by ensuring sufficient liquidity to meet foreseeable needs and investing cash assets safely and profitably. Short-term flexibility is achieved through overdraft facilities. The company finances its investment in tangible fixed assets primarily through hire purchase contracts and loan arrangements. The maturity of these obligations is shown in the financial statements. |
|
| Interest rate risk |
|
| The company finances its operations through a combination of retained profits, finance lease contracts, loan and overdraft facilities. The company manages its exposure to interest rate fluctuations on its finance leases by entering into fixed rate agreements. |
|
| Credit risk |
|
| The company's principle credit risk is attributable to its trade debtors. This is monitored closely through diligent credit checking procedures and reviewing debt ageing and collection history in order to mitigate credit risk exposure. |
| Future developments |
|
| Our strategic focus remains in sustainable growth, innovation, and operational excellence. We are committed to: |
| ● |
Increasing capacity utilisation at both our Gainsborough and Blyton Grange sites to meet increasing demand. |
| ● |
Driving further growth across core and adjacent markets, maximising our scaling potential and capitalising on the growth in addressable markets. |
| ● |
Further developing the Cookson & Zinn portfolio to unlock synergies and open new market opportunities. |
| ● |
Leveraging digital and automation technologies to boost efficiency and quality. |
| ● |
Advancing our clean energy and low-carbon engineering offerings. |
| ● |
Continuing investment in our people, facilities, and processes. |
| The Company's forward order book stands extremely strong, providing solid visibility into the 2025 financial year. |
| We enter the coming year with confidence in our ability to grow, adapt, and create long-term value, which is underpinned by a solid financial foundation, a committed, talented team and a clear strategic direction. |
|
|
| This report was approved by the board on 26 June 2025 and signed on its behalf. |
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|
| D Anderson |
| Director |
|
|
| Basis for opinion |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
|
| Conclusions relating to going concern |
| In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
| Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
|
| Other information |
| The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
| We have nothing to report in this regard. |
|
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the 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. |
|
| Matters on which we are required to report by exception |
|
| 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. |
| Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
| Our assessment focused on key laws and regulations the entity has to comply with and areas of the financial statements we assessed has being more susceptible to misstatement. These key laws and regulations included but were not limited to compliance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice and relevant tax legislation. |
| We are not responsible for preventing irregularities. Our approach to detect irregularity included, but was not limited to the following: |
| ● |
obtaining an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework, including a review of legal and professional nominal codes; |
| ● |
obtaining an understanding of the entity's policies and procedures and how the entity has complied with these, through discussions and sample testing of controls; |
| ● |
obtaining an understanding of the entity's risk assessment process, including the risk of fraud; |
| ● |
designing our audit procedures to respond to our risk assessment; |
| ● |
performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias, such as work in progress and sales accruals on long term contracts; |
| ● |
assessing key areas of estimation such as the calculations for sales accruals on long term contracts. |
| In response to the risk of irregularities in relation to 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; |
| ● |
reviewing correspondence with HMRC and associated parties. |
| Whilst considering how our audit work addressed the detection of irregularities, we also consider the likelihood of detection based on our approach. Irregularities from fraud are inherently more difficult to detect than those arising from error. |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
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Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
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Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
| 2 |
Critical accounting estimates and judgements |
|
|
The preparation of the financial statements requires management to make judgements, estimates and assumptions in applying the company's accounting policies to determine the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. |
|
|
| 3 |
Analysis of turnover |
2024 |
|
2023 |
| £ |
£ |
|
|
Sale of goods |
14,810,554 |
|
14,454,131 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
14,360,714 |
|
13,775,634 |
|
Europe |
331,030 |
|
103,436 |
|
Rest of world |
118,810 |
|
575,061 |
|
|
|
|
|
|
14,810,554 |
|
14,454,131 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Operating profit |
2024 |
|
2023 |
| £ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
233,045 |
|
219,929 |
|
Depreciation of assets held under finance leases and hire purchase contracts |
|
89,084 |
|
85,404 |
|
Operating lease rentals - plant and machinery |
22,492 |
|
22,492 |
|
Operating lease rentals - land and buildings |
159,799 |
|
155,932 |
|
Auditors' remuneration for audit services |
39,500 |
|
29,500 |
|
Carrying amount of stock sold |
7,613,356 |
|
7,983,372 |
|
|
|
|
|
|
|
|
|
|
| 5 |
Directors' emoluments |
2024 |
|
2023 |
| £ |
£ |
|
|
Emoluments |
632,307 |
|
498,007 |
|
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
|
Emoluments |
230,431 |
|
161,204 |
|
|
|
|
|
|
|
|
|
|
| 6 |
Staff costs |
2024 |
|
2023 |
| £ |
£ |
|
|
Wages and salaries |
4,221,511 |
|
3,595,259 |
|
Social security costs |
451,053 |
|
366,320 |
|
Other pension costs |
263,849 |
|
124,944 |
|
|
|
|
|
|
4,936,413 |
|
4,086,523 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
21 |
|
19 |
|
Manufacturing |
75 |
|
76 |
|
Sales |
4 |
|
4 |
|
|
|
|
|
|
100 |
|
99 |
|
|
|
|
|
|
|
|
|
|
| 7 |
Interest payable |
2024 |
|
2023 |
| £ |
£ |
|
|
Bank loans and overdrafts |
53,636 |
|
43,302 |
|
|
|
|
|
|
|
|
|
|
| 8 |
Taxation |
2024 |
|
2023 |
| £ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
286,667 |
|
320,697 |
|
Adjustments in respect of previous periods |
(2,118) |
|
- |
|
|
|
|
|
|
284,549 |
|
320,697 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
(10,360) |
|
5,584 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
274,189 |
|
326,281 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2024 |
|
2023 |
| £ |
£ |
|
Profit on ordinary activities before tax |
888,084 |
|
1,274,840 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
25% |
|
25% |
|
| £ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
222,021 |
|
318,710 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
64,646 |
|
1,987 |
|
Adjustments to tax charge in respect of previous periods |
(2,118) |
|
- |
|
|
Current tax charge for period |
284,549 |
|
320,697 |
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
There are no factors affecting future tax charges. |
|
|
| 9 |
Intangible fixed assets |
£ |
|
Goodwill: |
|
|
Cost |
|
At 1 October 2023 |
6 |
|
At 30 September 2024 |
6 |
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 1 October 2023 |
6 |
|
At 30 September 2024 |
6 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 30 September 2024 |
- |
|
|
|
|
|
|
|
|
|
|
Goodwill has been fully written off. |
|
|
| 10 |
Tangible fixed assets |
|
|
Freehold Land and buildings |
|
Motor vehicles |
|
Plant, machinery and fixtures |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
| £ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 October 2023 |
630,060 |
|
76,515 |
|
3,631,199 |
|
4,337,774 |
|
Additions |
- |
|
40,340 |
|
115,768 |
|
156,108 |
|
Disposals |
- |
|
(31,130) |
|
(178,475) |
|
(209,605) |
|
At 30 September 2024 |
630,060 |
|
85,725 |
|
3,568,492 |
|
4,284,277 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 October 2023 |
15,297 |
|
39,088 |
|
2,111,946 |
|
2,166,331 |
|
Charge for the year |
10,918 |
|
16,020 |
|
295,191 |
|
322,129 |
|
On disposals |
- |
|
(19,716) |
|
(128,835) |
|
(148,551) |
|
At 30 September 2024 |
26,215 |
|
35,392 |
|
2,278,302 |
|
2,339,909 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 30 September 2024 |
603,845 |
|
50,333 |
|
1,290,190 |
|
1,944,368 |
|
At 30 September 2023 |
614,763 |
|
37,427 |
|
1,519,253 |
|
2,171,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| £ |
£ |
|
Carrying value of plant and machinery included above held under finance leases and hire purchase contracts |
|
187,499 |
|
177,873 |
|
|
|
|
|
|
|
|
|
|
| 11 |
Stocks |
2024 |
|
2023 |
| £ |
£ |
|
|
Raw materials and consumables |
877,868 |
|
754,125 |
|
Work in progress |
278,202 |
|
392,373 |
|
|
|
|
|
|
1,156,070 |
|
1,146,498 |
|
|
|
|
|
|
|
|
|
|
| 12 |
Debtors |
2024 |
|
2023 |
| £ |
£ |
|
|
Trade debtors |
3,140,505 |
|
2,447,918 |
|
Recoverable contract balances |
|
|
|
|
800,928 |
|
960,561 |
|
Other debtors |
223,422 |
|
204,614 |
|
|
|
|
|
|
4,164,855 |
|
3,613,093 |
|
|
|
|
|
|
|
|
|
|
Included in other debtors is an amount of £100,000 (2023 £Nil) due from a related party, Exxollon Limited. There is an option to convert this debt to share capital. |
|
| 13 |
Creditors: amounts falling due within one year |
2024 |
|
2023 |
| £ |
£ |
|
|
Bank overdrafts |
- |
|
148,330 |
|
Bank loans |
67,854 |
|
66,196 |
|
Obligations under finance lease and hire purchase contracts |
50,389 |
|
57,532 |
|
Trade creditors |
1,450,240 |
|
1,928,830 |
|
Payments on account |
|
|
|
|
2,310,689 |
|
935,610 |
|
Other taxes and social security costs |
1,090,002 |
|
842,831 |
|
Other creditors |
1,311,810 |
|
714,621 |
|
|
|
|
|
|
6,280,984 |
|
4,693,950 |
|
|
|
|
|
|
|
|
|
|
| 14 |
Creditors: amounts falling due after one year |
2024 |
|
2023 |
| £ |
£ |
|
|
Bank loans |
345,128 |
|
411,618 |
|
Obligations under finance lease and hire purchase contracts |
32,346 |
|
43,319 |
|
|
|
|
|
|
377,474 |
|
454,937 |
|
|
|
|
|
|
|
|
|
|
| 15 |
Loans |
2024 |
|
2023 |
| £ |
£ |
|
Analysis of maturity of debt: |
|
Within one year or on demand |
67,854 |
|
214,526 |
|
Between one and two years |
17,854 |
|
67,741 |
|
Between two and five years |
327,274 |
|
343,877 |
|
|
|
|
|
|
412,982 |
|
626,144 |
|
|
|
|
|
|
|
|
|
|
Bank facilities are securred by a charge over Blyton Grange, Gainsborough, a debenture, chattel mortgages and limited personal director guarantees. |
|
|
| 16 |
Obligations under finance leases and hire purchase |
2024 |
|
2023 |
|
contracts |
£ |
£ |
|
|
Amounts payable: |
|
Within one year |
50,389 |
|
57,532 |
|
Within two to five years |
32,346 |
|
43,319 |
|
|
|
|
|
|
82,735 |
|
100,851 |
|
|
|
|
|
|
|
|
|
|
The finance lease and hire purchase obligations primarily relate to the aquisition of plant and equipment and are secured by a charge over the vehicle related to the individual contract. Contracts are primarily for the duration of 36 months and have interest rates in the range of 6% to 10% over the full term of the contract. |
|
| 17 |
Deferred taxation |
2024 |
|
2023 |
| £ |
£ |
|
|
Accelerated capital allowances |
314,003 |
|
324,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| £ |
£ |
|
|
At 1 October |
324,363 |
|
318,779 |
|
(Credited)/charged to the profit and loss account |
(10,360) |
|
5,584 |
|
|
At 30 September |
314,003 |
|
324,363 |
|
|
|
|
|
|
|
|
|
|
|
| 18 |
Share capital |
Nominal |
|
2024 |
|
2024 |
|
2023 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
336,000 |
|
336,000 |
|
351,000 |
|
|
|
|
|
|
|
|
|
|
| 19 |
Capital redemption reserve |
2024 |
|
2023 |
|
Revaluation reserve |
£ |
£ |
|
|
At 1 October |
49,000 |
|
34,000 |
|
Transfer from the profit and loss account |
|
15,000 |
|
15,000 |
|
|
At 30 September |
64,000 |
|
49,000 |
|
|
|
|
|
|
|
|
|
|
| 20 |
Profit and loss account |
2024 |
|
2023 |
| £ |
£ |
|
|
At 1 October |
1,928,802 |
|
1,349,243 |
|
Profit for the financial year |
613,895 |
|
948,559 |
|
Purchase of own share transfer |
(69,000) |
|
(69,000) |
|
Dividends |
(350,000) |
|
(300,000) |
|
|
At 30 September |
2,123,697 |
|
1,928,802 |
|
|
|
|
|
|
|
|
|
|
| 21 |
Dividends |
2024 |
|
2023 |
| £ |
£ |
|
|
Dividends on ordinary shares (note 20) |
350,000 |
|
300,000 |
|
|
|
|
|
|
|
|
|
|
|
| 22 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
| £ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
- |
|
- |
|
6,955 |
|
- |
|
within two to five years |
700,000 |
|
- |
|
21,151 |
|
51,700 |
|
(five year rental charge) |
|
|
700,000 |
|
- |
|
28,106 |
|
51,700 |
|
|
|
|
|
|
|
|
|
|
There are no operating lease incentives. |
|
| 23 |
Related party transactions |
|
|
During the year dividends were paid to shareholding directors of £75,521 (2023: £61,966). |
|
|
During the year the company traded with the following related party companies. |
|
|
Purchases from these companies were as follows: |
|
|
|
|
|
|
2024 |
|
2023 |
| £ |
£ |
|
|
NXT Aequitas |
|
|
|
|
119,570 |
|
148,164 |
|
Verto Solutions Limited |
|
|
|
|
10,000 |
|
10,000 |
|
|
Balance due from a related party company as at the year end |
100,000 |
|
- |
|
(see note 12) |
|
| 24 |
Controlling party |
|
|
The company is wholly controlled by the directors. |
| 25 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
|
| 26 |
Legal form of entity and country of incorporation |
|
|
Wefco (Gainsborough) Limited is a private company limited by shares and incorporated in England. |
|
|
| 27 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
|
Britannia Works |
|
Station Approach |
|
Gainsborough |
|
Lincolnshire |
|
DN21 2AU |